Midstream is caught between a rock and a hard place. On one hand, gathering and pipeline operators, processors, storage and energy marketers face abundant opportunities and challenges when meeting customer demand. And it’s only becoming more complex with accelerating operator M&A shaping the production landscape and increasing global demand for both oil and U.S. LNG. On the other hand, midstream companies face fierce competition, low tariffs and lingering inflationary pressure that pushes labor and supply chain costs higher.
When it comes to best-in-class financial performance, revenue generation is just one side to the cash flow coin. Of equal importance is spend management and accurately accruing for inbound expenses. Without a clear view of your inbound expense pipeline, teams can overbudget accrual and lose return on capital deployed. Or perhaps worse, come in underbudget and be short on cash when it is time to pay the bills. Either way, missing the moving expense accrual target signals poor financial discipline for investors and shareholders.
Obscuring a clear view of the inbound expense pipeline, many midstream companies are flooded each month with hundreds or even thousands of vendor invoices, each vendor having negotiated different payment terms (e.g., net 30, pay early for 3% discount). At best, these invoices arrive in a PDF or other digital form. And at worst, they arrive in envelopes stuffed with multiple invoices from the same vendor. None of these fit neatly into your AP and accounting system, leading most teams to throw people at the problem, close the month with a flurry of activity, and hope that duplicate invoices or overpayment didn’t slip through the cracks.
Energy accounting professionals know that accounts payable automation is often easier said than done. There’s a technology piece for extracting AP invoice metadata from an unstructured data format (PDF or paper), coding, validating, routing and approving. This is the “ante up” for AP automation solutions, of which there are many on the market. Those who do it well, like OpenInvoice from Enverus, layer on value added features for streamlining each step in the process to further simplify and accelerate invoice coding with pre-filled fields, assign delegates when primary approvers are out and escalate approval when amounts exceed budget.
But the technology really is the easy part. Where AP automation can fail or flourish is getting vendor buy-in to participate directly in the process. That’s where OpenInvoice stands out from a crowded room of seemingly similar AP solutions, and that’s before you understand the network effect.
Yes, OpenInvoice antes ups and raises the stakes with its best-in-class, cloud-based AP automation. But in this game, we’re the only vendor who can raise the other players at the AP automation table with a reciprocal data sharing network that plugs as much as 75% of the midstream supply chain directly into your AP and general ledger. That’s because a vast network of suppliers is already in the OpenInvoice network and can be added to AP invoice workflows with a few clicks.
By definition, a “network effect” increases the value of a product the more people who join a network and actively participate (which explains why LinkedIn and Facebook are so powerful). It’s also a compounding benefit – the more midstream companies and suppliers who collaborate with OpenInvoice, the larger the network grows along with increased value. But how does having access to the premier buyer/supplier network in energy help with hitting your accrual target each month?
OpenInvoice accelerates AP invoice processing efficiency through leading tech and access to existing network users. Suppliers simply submit their invoices directly to you in a standardized and consistent format for coding and quick validation, then routed with flexible workflows that can accommodate many branches and steps up in approval. Invoices can also be rejected back to an approver or to the starting line again with the vendor.
Once invoices are approved by AP, 25 pre-built integrations with major ERP providers (think SAP) and energy-specific financial packages (think WolfePak) bring invoices that are ready to be paid into your financial accounting. Getting them in the queue fast means you can plan when to pay them with more granular control. OpenInvoice gives you a clear view of the entire expense pipeline, showing the inbound amount broken out by stage (coding, approving, rejected, etc.). In turn, midstream companies large or small gain greater control over their financial destiny, eliminate the monthly invoice scramble, and bring budgeted and actual accruals closer together than ever.
