Here’s an ugly reality: Field tickets get destroyed, damaged or lost. Turning in a field ticket often requires the technicians to travel back to the company’s main office for processing. In an industry where getting paid for services rendered can take up to 90 days, delays in getting the ticket submitted for processing and getting bills out the door can dramatically add days or weeks to collecting payment.

New technologies, however, are providing oilfield, environmental and industrial services companies with new tools to reduce field ticket processing time and the number of days sales outstanding (DSO). A few standouts in this group, due to their domain expertise, include LiquidFrameworks’ FieldFX software suite, a cloud-based “quote-to-cash” field automation application, and Intacct, a cloud-based accounting application.

CFO Challenge

As a CFO, reducing DSO—the average time from when an invoice is created to the time that cash or payment is received—and improving cash flow should be the key goals. But shortening the “time-to-cash,” the number of days between job completion and cash receipt, is something that can more easily be accomplished. Travis Parigi, founder and COO of LiquidFrameworks, has labeled this the “CFO Challenge.” The challenge is to finish the field ticket when a job is completed and then send an accurate invoice to the customer on the same day as job completion.

How does it work today?

Let’s take, for example, a wireline company. It will send field engineers out to a well site to perform various services for an operating company. The engineers generate a field ticket that includes information pertinent to that job including equipment, services, supplies and labor. The ticket also needs a signature and usually a stamp from the company man in the field.

Next, the field services engineer delivers that ticket to accounting. This might be done via email, FedEx or in person, which might be days after the fact. There have been cases where tickets have gotten misplaced, damaged or even lost during this process. All of this extends the amount of time required to generate the invoice— and the clock on DSO hasn’t even started yet.

Even after the ticket gets to the accounting department, there are other pitfalls. The ticket needs to be accurate, contract-compliant and meet what LiquidFrameworks refers to as “The 4-Way Match.” These four things must match the price book, quote, ticket and invoice. All of this needs to happen in one day.

How?

To accomplish this, the CFO will need to ensure that the company operates from standardized price books that are built on a common set of master data. The field engineer will need to electronically create an accurate ticket that can be signed and stamped electronically. And finally, an invoice needs to be created without redundant data entry, which could make the invoice inaccurate or noncompliant.

Business case for same-day invoicing

Revenue leakage is another significant problem due to lost field tickets, unreported man hours and missed charges. There is typically revenue leakage of about 4% across the industry. Also seen is unnecessary headcount dedicated to the manual processing of tickets and invoices.

Imagine a $100 million company with manual field tickets and a manual invoicing process. The company might have three clerical staffers needed to manage the process. Assume a weighted average cost of capital of 8% and revenue leakage of 4%.

If this company could implement same-day invoicing, it could save nearly $108,000 annually for the three workers that could be redeployed; a two-week reduction in its billing cycle, saving it $306,000 in annual cost of capital; and savings of $4 million annually in lost revenue from leakage. This totals to $4.4 million in additional cash annually to spend more wisely and be better stewards of investor dollars.

Solution

Cloud technologies such as FieldFX and Intacct provide companies with solutions that require minimal IT or development resources.

Jeff Ferguson Sr., founder and owner of Delta Oil Tools, a downhole completion and service company in Louisiana, chose Intacct for his accounting system and FieldFX for his ticketing system. “We settled on Intacct and FieldFX mainly because of their intuitive user interfaces,” Ferguson said. “Our workforce, especially in the field, are in their early 50s and not necessarily all that computer-savvy. We did not want to spend a lot of time having to train people on the new system.”

Once customers, price books, equipment and employees are set up, the data are synched in real time between the systems to be used on sales quotes and field tickets. The process works like this:

  1. A sales person generates a sales quote in FieldFX.
  2. Once the quote is approved by the customer, the quote is converted into a field ticket in FieldFX and scheduled based on the availability and appropriate certification of the crew and equipment.
  3. Next, field supervisors complete the information on the field ticket using a tablet, attaching any supporting documentation. Since they might not have access to the Internet, they will save those data in FieldFX and then resynch them to the cloud when they have access.
  4. With the click of a button, they send the ticket to accounting within FieldFX, and it automatically creates an invoice in Intacct.
  5. A billing clerk reviews the invoice before transmitting it to the customer.

Mistakes are eliminated because the ticket already matches the quote and the price book.

Control what you can

In an unpredictable energy economy with customers struggling to pay invoices in a timely manner and with a workforce scattered across the country in some of the most remote areas, there is no shortage of challenges for oilfield services companies to remain successful. The time it takes to generate an invoice and the accuracy of those invoices are two things, however, that they can actually control. Today’s technology and tools make it much easier to ensure that tickets are generated accurately and never lost and that they get to accounting quickly so that invoices can get out the door.

The next great technological invention will be software that makes customers pay on time.