It isn’t easy running a petroleum-based operation. Such outfits often consist of much more than direct delivery – propane supply, unattended fueling, lube oil and convenience stores also play their part. These organizations also exist in a highly volatile field where prices might shift several times over the course of one day and they must satisfy the auditing and tax requirements of every level of government – from city to federal.
These challenges make management an interesting proposition. Most companies have long since realized the value of software as a means of increasing efficiency. However, such software was typically adopted in a haphazard manner. First, perhaps, came some word processors, then some kind of accounting system, followed by a way to manage propane accounts and a program to keep track of fuel deliveries. The result is a mishmash of systems that can’t talk to each other. While a lot better than the old days of paper records and files, inefficiency causes significant problems such as multiple data entry, IT overloads, customer delays, system crashes. Errors can lead to auditing penalties, misreporting and unacceptable risk.
That’s why many petroleum distributors are gravitating towards an all-in-one approach. By implementing a unifying single-vendor software system, they eliminate many of the challenges outlined above while opening the door to higher revenues and getting more done with less.
Quality Oil and Gas Company, for example, is a petroleum jobber that serves the North and South Carolina markets. Its three offices/distribution centers deliver fuel to about 60 c-stores, as well as many commercial and farm accounts, 3,200 propane customers for home heating and some kerosene accounts. The company managed its many outlets via four different software packages for payroll, fixed assets, accounting and propane. Despite efforts to cobble these disparate systems together, rekeying of data was the order of the day.
“All of our propane transactions were entered in one location and then had to be reentered into the general ledger (GL) at our headquarters,” said Jimmy McDonald, environmental compliance and information systems manager at Quality Oil and Gas. “That probably consumed two full days alone.”
Credit card information received at the company’s websites had to be rekeyed. Each location ran its own trucks with different kinds of information entered at each depot i.e. accounts receivable (AR), GL and payroll at one spot, propane at another and a third center dealing with c-stores, commercial customers and fuel deliveries. That led to lengthy delays in data arriving from one office to another. Weekly reports were printed and mailed to the other locations.
“Entry into GL was a nightmare and AR reports couldn’t be accessed elsewhere,” said McDonald. “It took working through four screens to access accounts data, which meant customers having to be placed on hold while we drilled down into the system.”
The company evaluated several vendors before purchasing a unified package by Summit Software which offered a wide breadth of features without requiring investment in pricey computing gear. The solution replaced the original accounting, propane and payroll programs, with plans to phase out the legacy fixed asset system in the near future. The benefits were immediate. Quality Oil and Gas saves about five minutes per customer call when looking for customer information.
“About two days of data reentry per month is no longer needed,” said McDonald. “Having an integrated system also means we can close out the month by the fifth instead of the fifteenth.”
Another two days per month of data entry has been eradicated by integrating the propane system with GL. Credit card data is automatically downloaded to the accounting package – another two to three hours per week of savings. An extensive set of monthly reports means that McDonald knows the exact profit per item and overall profits per month. This wasn’t possible before. The company can now maintain tight control on inventory, which makes it easy to troubleshoot c-store and inventory issues.
Bellman Oil of Indiana is another company that had software challenges. It provides a full range of commercial and retail petroleum products, and fuel transportation services as an independent distributor of Chevron and Citgo petroleum products. It has 12 company owned c-stores and supplies over one hundred and fifty more in the Northern Indiana and Southwest Michigan region.
The problem for Bellman Oil was that with multiple systems, inefficiency was rife. Taxes were addressed by one system while ticketing systems and c-stores ran on separate systems. Management attempted to tie it all together with spreadsheets, but that proved to be time consuming. Reporting, too, was a long and involved affair.
“What finally pushed us over the edge was the state demanding electronic tax returns,” said Bellman Oil IT manager Pete Theodorovich.
After demos and proposals were reviewed, the company selected an integrated solution from Summit. The company rolled out the software at corporate headquarters and in its c-stores, connecting them over the Internet. That dispensed with the need to re-key reports from each store.
Tax submissions, too, that used to take up a week of every month to prepare for are now submitted electronically. Inventorying is completed monthly as opposed to quarterly.
“Inventory takes a couple of hours compared to up to three days before,” said Theodorovich. “Everything works well together and it takes care of rapid price fluctuations.”
King Oil Inc. of Indiana never had to deal with multiple systems. From its formation in 1973 with a single truck, it now consists of a couple of bulk fuel plants, a bulk propane business, close to 2,500 customers, a c-store network and 12 million gallons a year of petroleum delivery. Summit Software was introduced in the ‘80s.
“The software does what it is supposed to do, which facilitates the sale of fuel to our customers,” said Brian King, vice president of King Oil.
Over the years, he has seen the software grow in sophistication. Recently electronic data interchange (EDI) has been implemented between grocery vendors and King Oil c-stores, which eliminates two hour per week of administration. In addition, Summit gained approval for its reports to be transmitted electronically to state systems, which eradicated manual form entry and report mailing.
The company runs its entire enterprise consisting of five companies, GL,AP, AR, payroll, equipment tracking, petroleum and propane on one unified package, including the Summit degree day system to schedule deliveries based on how cold it is. By adding laptops to its trucks, driver paperwork has been eliminated along with data reentry.
The system also provides a means of safeguarding company data in the event of a disaster through Summit’s disaster recovery services. “When a fire destroyed our office last year, Summit arranged for our data to be backed up onto its own system and we were operating again by the next day,” said King.
George Olney, COO, Summit Software, an iRely company specializing in unified software accounting systems, at 4242 Flagstaff Cove, Fort Wayne, IN 46815, 260-486-4357, www.summit-soft.com