Improving Revenue Distribution Process by Optimizing Existing Software Functionality


Our client’s Revenue Accounting Department was performing month-end revenue distribution for their operated properties by manually allocating volumes to wells and keying in prices. This manual effort was being done in spreadsheets, which required time-consuming validation, and the spreadsheet data was then being uploaded to their ERP system to begin the revenue distribution process. They found themselves consistently under pressure to meet their monthly close schedule, and fluctuating oil prices created pressure to reduce staff despite this struggle to meet deadlines. The spreadsheets also introduced inaccuracies that were inevitable, given the manual effort.


With years of service assisting clients in getting the best out of their ERP software, Magnum Forge engaged the client to begin a project to leverage existing functionality in the client’s ERP system to automate the revenue distribution process and generate revenue transaction detail from data in the ERP system instead of manufacturing it outside the system and uploading it. The client was eager to work with Magnum Forge, adopt new business processes, and “stop doing things the way they had always been done.” Like many companies, they found it difficult to step back and assess their position and identify opportunities for valuable improvements without some help from an experienced guide.


Magnum Forge began the project with an initial assessment to ensure that all revenue processing scenarios could be automated through the untapped functionality of the ERP system. After the successful validation of the scenario testing, the project entered the implementation phase. During this phase, Magnum Forge worked directly with the functional departments of Revenue Accounting, Production Accounting, Division Order, Marketing, and IT to ensure that user acceptance testing was thorough and that end users were adequately trained on the new processes. To aid in the change management aspect of the project, Magnum Forge created detailed desk procedure documentation that outlined the new roles and responsibilities and was used by each department as a reference during month-end processing.


The result was a more streamlined revenue processing cycle with fewer manual control points and errors that would require time-consuming prior period adjustments. In addition, Magnum Forge helped the client move toward industry best practices for revenue deck setup and maintenance. After the conclusion of this project, Magnum Forge assisted the client with automating their state royalty reporting, which will deliver additional business process efficiencies. Having in-depth knowledge of upstream software systems has allowed Magnum Forge to help clients to discover untapped functionality to improve day-to-day and month-end processes.