1. Data Consistency vs. True Expense Recognition withTroublesome Invoices
Invoicescanbe enteredintomostaccountingsoftware “anyway”youwantto witheitheralphaor
numericcharacters. The betteraccountingpackageswill flaganinvoice numberwhichhasbeeninput
before asan paid/existingliability withouthavingtoruna pre-proof report(andthe exceptioncan stop
the inputwitha lightederrorfield.)
However,there are some recurringandtroublesomemonthlyinvoicessuchaselectricortelephone
utilitieswhichare notdesignatedwithaninvoice numberanduse a redundantaccountnumber. The
account numbersoftenexceed17or 18 charactersand may surpassthe available numberof input
characters foryour invoice numberinthe A/Psystem. Hopefullyyoursystemhas adesignatedspace for
a descriptionwhichiswhere youcanenterthe actual account numberas the utility invoicedyou
(makingiteasyforthe utilitytopost customer’spayment). Mostlarge payorsare not includinga
remittance advice withcheckstothe utilitiesandIcan’t begintowonderhow the utilitiesdetermine
howto post electronicpayments.
Realize if the wellsuse individual well electricmetersthe utilitywill probablyassignadifferentmeter
numberforbillingeachwell. The bestdecisionto make is to create manual support (or excel file using
worksheets) by vendorAND account numberdetailinghow you processand create an invoice number
for a redundantaccount number. A lot of the account numberscontaindashesorspaces. I ignore
themwhencreatinganinvoice numbertouse. If you have drillingpartners,the nonoperatorisprobably
goingto audityourutilitybill payments(sinceyoubilledhimforhisshare) anda well organizedAP
subledgerwill expeditethis.
The nextitemtoconsideriswhetheryouwantthe invoice reflectedinthe APsystembyservice ordue
date. Creatingan invoice numberusingthe service date istricky whenthe service date onthe invoice
overlapstwocalendardates.
A lotof utilitiesdonotfurnishaninvoice date (asthere isnoinvoice #) but mightfurnisha statement
date. If consistentlyperformed,astatementdate couldbe partof the invoice numberingscheme and
an accountant wouldbe able totell the auditorat a quickglance whattime periodthe utilities
represent.
For instance;
 UtilityBill for$100.00 dated8/31/16.
 16 days inJuly=$60 / 15 daysin Aug=$40
 Accountnumber123456789 and the inputroomfor the invoice # isonly9 digits.
Basedon the case above youmightuse invoice #123450716 as thisrepresentsatruncationof the
account # and service date July2016. You shouldbe able totell the auditor0716 reallyrepresents July
and Augustservice dates. Youwouldthenrecordtoutilityexpense $60to July2016 and $40 to August
2016 (a twoline entry). Asnotedabove some operatorsmightexpense the entire$100 to July2016 (a
one line entry)*. Inthe descriptionfield pleaseidentifythe utility’saccountnumberonthe checkto
them. The utilitycompany will NOT recognize the invoice number from the invoice field onthe check
you are mailingto them. If the systemallows be sure to type in the utility account number inyour
descriptionfield.

2. The goal isfor yourAP ledgerisuniformity. Thisisespeciallyimportantif the meternumbersare similar
(usuallytheyare notbutanythingcan happen).
* I have yetto see anywell operatorsplittingthe service datesonany utility;norhave Iseenanauditor
callinganexceptionregardingthistreatment(andfeel itwouldjustbecomeanadministrative burdento
make it “perfect”). I thinkthisisbecause at the beginningof the yearone partybenefitsandatthe end
of the yearthe other partybenefitsdue totimingof the billing. It is a violationof the matching
principle though.