Profit and Loss per Well
How do you currently view your profit and loss statements? We can provide you with monthly profit/loss statements on a well by well basis. With our extensive oil and gas background we realize that each well has to be looked at as an independent profit center. By providing our clients with timely income/loss reports and income/loss graphs our clients are in a position to make an informed decision regarding the future of any given well.
Production Accounting
Most oil and gas producing states require some type of oil and gas production report from companies producing within their state. Companies who hire full time employees to meet these filing requirements are incurring excess general and administrative expense. The nature of production reporting requires the accountants whose responsibility it is to report production to only be busy during a few days of the month. Don't incur excess salary expense when you can outsource your production reporting to Sean M. Hugo, CPA and only pay for the amount of time it takes to complete your production reporting requirements.
Joint Interest Billing
Your company could be absorbing 100% cost of expenses that could be billed out to your other working interest owners as provided for in your joint operating agreement. We have in-depth knowledge of accounting for oil and gas joint operations. Many oil and gas companies do not bill out all the charges that they are entitled to under their joint operating agreement which costs the operator thousands of dollars. This can occur because most companies joint interest personnel do not know the industry standards and are not familiar with joint operating agreements.
Revenue Distribution
Many of our clients prefer to utilize our expertise in processing revenue rather than hiring an accounting staff to perform the same task. This saves our clients time and money by reducing salary expense, payroll tax expense, and benefits expense. Our clients simply provide us to necessary production information and we take care of the rest. Many of our clients choose to have us handle both production accounting and the revenue accounting as this saves them time and money.
Severance Taxes
Oil and gas producers have to make a difficult decision when it comes to reporting and paying their severance taxes. They must decide if it is beneficial to hire accounting personnel who will file the severance tax returns or have the purchaser report and withhold from revenue, the severance tax payment and submit it to the state taxing authority. In an effort to reduce general and administrative expenses most oil and gas producing companies take the position that reporting your own taxes does not warrant the added expense of hiring the personnel to complete the returns. The down side to this approach is when the purchaser withholds the taxes and pays them, they are under no obligation to seek out and take advantage of severance tax incentives that would save the oil and gas producer money. We provide a cost effective alternative. Our staff is familiar with the various severance tax incentives and can complete your severance tax returns and save you money on salary expense and payroll tax expense.
Tax Planning
We can properly code and process your accounts payable or review for accuracy. Most accounts payable personnel do not understand the ramifications miscoding invoices has on income tax and joint interest billings. This typically occurs because accounts payable personnel do not understand the type of work being done on some of the invoices they receive and code them to the wrong general ledger account. Miscoding invoices can cost companies thousands of dollars in increased tax expense and joint interest billing charges that were never billed out to the working interest owners. Our consultants understand how the accounts payable process affects the other accounting areas. By properly coding and recording your accounts payable we can reduce your company's tax expense and increase the amount your company is billing out in your joint interest billings.