Reducing Days Sales Outstanding (DSO): The inefficiency of paper-based operations
Discover how switching to mobile operations can help oilfield and shale service companies significantly reduce Days Sales Outstanding.
Many aspects of the oil and gas industry still run on paper. However, paper billing and record keeping is not an efficient way to run an oilfield services business.
One of the biggest issues is the impact that paper records and billing systems have on your DSO. Moving from paper to mobile application-based billing can reduce your DSO rate by 25 days or more.
Implementing Mobile apps will also save money and maximize the profitability of each contract. Mobile apps significantly reduce the pre-invoicing errors that plague every part of the industry. With a paper system, it is necessary to check and confirm every piece of information that makes its way to the back office.
Even with checks, there are still frequent issues with missing data and incorrect information that need to be rectified. This means using up more man hours and valuable resources to correct errors.
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Mobile apps eradicate the issue of missing and inaccurate data. When scanning a barcode is the only thing you need to do in order to report on equipment then the margin of error is almost completely removed. It’s also much easier to avoid gaps in the information, as the apps offer checklists for each process and the automation of many tasks that would otherwise be handled manually.
PHALANX apps provide instantaneous authorization; the ‘Company Man’ (if they are unavailable to sign-off in the field) will receive email alerts when they are required to sign-off on a ticket. “Once click, same day” email approval from customers can deliver a huge reduction in the time it takes to process invoices. If there is an issue, it is no longer necessary to go back and forth finding the problem and resolving it amid disputes and queries. Now, customers can access relevant information in real time and corrections can be handled immediately.
Maximizing working capital in oilfield services is a top priority. The cost of paper-based invoicing and ticketing is not supportable, especially since these methods are so expensive and error-prone, allowing incorrect information and missing data to use up valuable internal and customer resources. With instant, error-proof billing using PHALANX mobile apps from Spartan, your company can cut down on back office expenditure as well as overall operational costs. One of our customers has achieved same-day cost reporting for over 90% of service jobs and reduced the back-office staffing levels from 30 to 3.
Ultimately, the reduction in DSO comes from a range of factors: increased efficiency, a lack of errors, and rapid querying and correction when necessary. The average DSO in the shale services industry is up to 70 days and typically includes 25 days of dealing with paper tickets that can be eradicated.
It is also worth looking at the other financial benefits that come from using PHALANX mobile apps. Leakage in terms of equipment, materials, and billable hours costs the average shale service business 1.5% of their total revenue on an annual basis, and the issue is easily dealt with by using paperless billing. These apps also allow real-time visibility of work in progress, which is reassuring for clients, and allows for faster and more profitable billing and inventory overall.
Running a shale services operation becomes considerably easier with PHALANX apps and paperless billing. It’s time to start letting go of the old ways of handling tickets and invoices and adopt the PHALANX suite of apps.
Your business will be far better suited to compete in the current market, and be in a great position when oil prices starts to rise again.