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Mitchell Oil Company, a
large, multi-branded marketer based out of Fayetteville, AR has
annual sales of approximately 50 million gallons to a combination of
dealer and consigned locations. They have an intricate network of
around 15 suppliers and do business in Arkansas, Missouri, Oklahoma
and Kansas. The outcome of such a diverse operation can amount to
some very complex accounting, the least of which is various taxing
scenarios that arise from doing business in multiple states.
Carol Egolf came to work for Mitchell Oil Company in early 2002.
With her many years of accounting experience, she knew she had many
obstacles to overcome in order to streamline their accounting
processes. The existing software was insufficient and allowed major
errors to enter their books, hampering the cash flow and the
company’s desire to grow. A great deal of their information had to
be entered and processed manually. “We would get this big list of
the credit card fees and go through and manually match them to
vendor invoices. It probably took two and a half to three hours a
day just to input the data.” says Carol, their Chief Financial
Officer. Sound familiar?
Mitchell Oil took on what can be the daunting task of automating
their home office. As Carol and the rest of Mitchell’s office staff
found out, it can be quite an exciting and worthwhile adventure.
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Mid-August of 2002, Mitchell Oil
made the official switch to COMPAS. COMPAS is our accounting
system designed specifically for petroleum marketers. COMPAS
is 100% designed, produced and marketed by AIMS. It was the very first system of its kind, and
has been in use by marketers since 1976. After some time,
training and dedication, the COMPAS system and its
automation modules were fully implemented and Mitchell Oil
has been running at full speed ever since. COMPAS now performs the labor and time
intensive accounting tasks that once plagued them. |
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COMPAS’
automation allowed Mitchell Oil to streamline their office
and reduce overhead, paying for itself after just a year.
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Not only does COMPAS import and process much of their
accounting information automatically, it has also allowed
Mitchell Oil to streamline their office staff and greatly
reduce their overhead. There are several tasks which had
required full-time employees that are now automatically
performed by COMPAS. The benefits of the effectiveness and
capabilities that have been provided have been two-fold.
Mitchell Oil has been able to decrease their accounting
staff from six to three, while increasing the accuracy of
their reporting.
A big motivator behind this quest for automation was to
reduce the amount of incorrect information that was being
processed and put on their books.
“Before the integration, I don’t think the problem was in
fixing the errors, but in not catching the errors,” Carol
says. Before Mitchell Oil implemented COMPAS, there was an
occassion where one of their major suppliers invoiced them
for the fuel taxes in two different states on the same load.
The error resulted in Mitchell Oil being charged over
$50,000 in taxes that they did not owe. Although such an
error can be caught and corrected, it is a big distruption
of a company’s cash flow.
COMPAS allows Mitchell Oil to catch such mistakes before
they are ever entered. COMPAS electronically pairs up the
supplier invoices and the bills of lading to ensure that
Mitchell Oil is paying the correct price for the product
that is de-livered. They may have a stack of invoices that
COMPAS will not accept because there isn’t a matching bill
of lading in the system. In a situation like this, COMPAS
will refuse the invoice and not allow it to be imported.
This gives Mitchell Oil the opportunity to determine where
the problem lies before entry into their system. Carol says
she is 90% sure that those invoices were meant for someone
else.
Building relationships with the companies that provide much
of the electronic document retrieval plays an integral role
in AIMS’ ability to provide such automation capabilities to
their clients. DTN Energy is just such a company. They can
retrieve just about any electronic information that is
available to a marketer: rack prices, credit card
settlements, bills of lading and fuel invoices.
Mitchell Oil uses DTN’s services to automatically retrieve
their supplier invoices, credit card batches and rack
prices. COMPAS automatically checks DTN’s website every two
hours for any new postings. By integrating DTN’s service
with their accounting system, Mitchell Oil saves time and
greatly reduces data entry errors. Processing all of this
electronic information takes only minutes a day.
Cathy Duncan, product manager
for DTN Energy’s integrated services, recognizes that
accounting automation is of tremendous benefit for
marketers, which is why DTN works closely with software
developers such as AIMS. She points out that reducing
clerical errors may save more time than a person realizes.
It may take five minutes to manually enter a supplier’s
invoice, but it takes much longer to find and correct errors
that are made. When you factor in the time spent on
correcting mistakes, electronic import of these invoices
provides an even greater savings.
There is another advantage to this adventure in automation.
Automatically updating rack prices, like Mitchell Oil does,
gives jobbers a more accurate picture of their cost of
goods.
“Because Mitchell Oil is automated, they can be much faster
on their feet. COMPAS imports their rack prices
electronically, which allows them to buy fuel and then sell
it to their customers, knowing their correct cost basis.”
says Stan Hargus, AIMS’ Vice President. Without this
automation, a jobber doesn’t know what was paid for the fuel
before selling it because of the delay that comes with
manual entry of fuel invoices.
Fuel taxes are another vital aspect to any marketer’s
business. Mitchell has tamed this beast by using COMPAS and
the ZyTax software by FuelQuest. Carol exports Mitchell
Oil’s fuel tax information, which is automatically generated
by the daily use of COMPAS, into the ZyTax software. ZyTax
puts the tax information into the format that is accepted by
each state and files it electronically. Previously, Mitchell
Oil paid $500 a month to have an outside party determine the
amount owed on top of the two days that she spent filling
out the tax schedules. Now she spends just two hours a month
verifying the figures.
Mitchell Oil is no longer restricted by the inadequacies of
their software. The payoff: COMPAS’ automation has given
them the power to grow their operation, streamline their
office and increase their profit on the back end. It has
given them the opportunity to look deeper into their
business instead of having to micro-manage the day to day
operations. |
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