Since March 2020 there has, by necessity, been a shift towards adapting much of our lives to become virtual – work, social gatherings, corporate events, the list goes on.
Though restrictions have started to ease and some normality is returning, the use of virtual solutions is here to stay.
This month the Offshore Technology Conference (OTC) will take place for the first time since 2019. The conference will take a hybrid approach meaning that those who wish to attend virtually will be able to access the same OTC content as those who are there in person.
The benefits and opportunity to remove potential barriers around location, time zones, accessibility and even cost, means that going virtual is an appealing approach to take in many situations. This is something we have seen time and again across the energy sector.
The energy sector today is a constantly changing, evolving and complex landscape. It is continuously seeking to find an equilibrium in the turbulence of supply and demand, fossil fuels and renewables, and survival and growth. All of which are underpinned by fierce competition for investment.
In an ever-changing and volatile environment, it is imperative that energy business leaders take a step back and review what is important for their businesses – Key Performance Indicators (KPIs) which were measured and reviewed six months ago for instance, may be out of date.
Systems and processes designed in regimes where costs did not need to be closely monitored are not easily adaptable to provide new information that is needed now. In an environment where the oil price is volatile or low, it is vital that costs can be analysed beyond just the surface. To remain lean and cost aware, it is essential that data is available in real-time so that it can be reacted to quickly and efficiently.
© RORY RAITTThe ability to report and analyse costs as soon as they are billed, ensures that accurate costs, by well for example, can be captured and analysed. With the ability to track granular data in a simple and real-time format, business leaders and key decision makers can be informed swiftly of any potential issues.
Similarly, the ability to track and record joint venture billings in real-time allows any billing queries to be raised with the operator within hours of receiving the bill, ensuring no cash leaves the business unnecessarily and time spent waiting for credits or refunds is reduced or eliminated.
Cashflow forecasting is an area which has always been difficult for businesses to perform efficiently and effectively in any sector – energy, and specifically E&P, follows that trend. The use of real-time information coupled with intelligent automation takes away some of the pain by enabling key stakeholders to make informed decisions based on accurate and timely information.
A virtual finance function (VFF) is a bespoke solution designed for precisely these types of corporate requirements. It is a technology-based solution which ensures that processes and procedures are automated – limiting paper-based and manual intervention processes. This frees up experienced staff to focus on running and growing the business.
Real-time information is key to an effective VFF as it enables stakeholders and key management to focus on making informed decisions and therefore provide strategic direction to the business.
For high growth entities with limited personnel, a VFF solution ensures that all appropriate controls and polices are in place for accelerated development, funding opportunities or a future listing.
Anderson Anderson & Brown (AAB) has worked with numerous energy operators and E&P companies to establish their virtual finance function in the UK and internationally. AAB deploys a specialist team dedicated to each client’s businesses, giving them peace of mind and enabling them to concentrate on growing their business knowing that all operational, finance and compliance needs are met.
Lauren McIlroy is Virtual Finance Function Director at Anderson Anderson & Brown (AAB)
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