So whatâ€™s a truck ticket? Â Itâ€™s any instrument that gets handed to the guy in the field when something is delivered to the site.
Today itâ€™s being used by vendors as their main document to issue invoices for their services, supplies and rentals, and by operators, to confirm receipt and record these expenses.
And herein lies the Tale of 2 Truths. One truck ticket and two different interpretations. Â This is costing the industry and every oil and gas company lots of money!
Why? Every truck ticket goes in two different directions. Â One copy stays with the vendor, while one stays with the operator at the site.
The truck ticket is used by operators for AFE (approval for expenditure) accounting. Â How well am I doing against my AFE budget? Â The field guy interprets the truck ticket and enters the expense into their accounting / recording system – the 1st Truth! The truck ticket also goes back with the vendor, who also interprets it and enters this data to generate their invoice – the 2nd Truth!
This is how the industry works today, and itâ€™s wrong! The most dynamic example is oilfield rentals. Once the field guy is finished with the rental service, like a400 barrel tank, and wants to move it to the next site, or send it back, notice is given by phone or email. We refer to this as an implied â€˜truck ticketâ€™, as no actual document is created. Â It is used to inform the service company of the move or return, and prompts them to issue a bill for the current rental.
There is a systemic problem in the industry â€“ the truck ticket is being interpreted in two different ways, by two (or more) different people. Â This causes all sorts of problems in verification and approval processes because you have two different sources of information – again 2 Truths. Both sides are interpreting the information, one side, how much and when should I bill, and on the other side, how much and when are we prepared to pay.
And thatâ€™s what makes the world go round, or is it a merry-go-round? Â Where do we go from here?From an operatorâ€™s perspective, the field guy is tracking and recording daily expenses against the AFE and reporting it back to Head Office. Â Every operator, at every single well goes through this. Everyone has a project, accounting or spreadsheet system to record and check these expenses to ensure they have enough money in their budgets and are controlling these costs against the AFE. Itâ€™s their interpretation of the truck ticket that determines what to pay for and how these expenses are allocated.
On the vendor side of this equation, the truck ticket is their source document to use in their own way. They are interpreting the truck ticket to track their products and services, create invoices, and as backup attachments to their invoices.Â Â That is if it is signed! If not, they have to track down the right field guy to get it signed, so the operator can validate that the expense is real.
There are big dollars involved here, particularly when the two interpretations of the truck ticket do not match.
Issues like duplicate invoices, double billing, split billing and over billing regularly creep into this equation. The truck ticket system is flawed because you are always faced with 2 Truths, theirs and yours!
The expenses recorded against the AFE should be used as the One Truth! Before the invoice is issued, the operator presses a button to automatically send an approval notice to the service company containing information on the money they have allocated on whichever line item. This is their notice, and to some extent, expense approval for the item in question, before the invoice is issued. If there are any disagreements, these can be settled between the field, operations and the service company before the invoice is actually issued.
The result? For the operator, much less hassle getting invoices verified and processed. For the vendor, pre-approved invoices with full coding and field authorization get issued quicker and paid faster! Costly errors are easily avoided and both sides save time by simplifying existing verification and dispute processes.
Is this the game changer? This is definitely a different way of thinking. No one in the industry thinks like this today! This is an opportunity to change the industry in a big, big way because of this approach. Press a button and an instant approved expense notification goes out! A number of immediate benefits are realized like automatic notification to vendors covering exactly how much they’re supposed to bill, correct account coding, invoice preauthorization, dealing with disputes before invoices are issued, and of course, saving time, valuable time!
The pain and hassles of interpreting truck tickets twice is costing everyone, big time! Dealing with One Truth is so much easier and far less costly!