7 Reasons To Replace Your Legacy Plant Accounting Software
Part 6 of the blog series highlights that legacy plant accounting software often fails to ensure compliance with complex regulations like GAAP and SOX, leading to risks such as lack of data transparency, reliance on error-prone spreadsheets, and audit difficulties, whereas modern solutions like W Energy Software provide features like Calc Trace and Show Association Graph to enhance audit readiness, data trust, and regulatory compliance for midstream companies.
Part 6 - Ensuring Compliance
From GAAP and Sarbanes-Oxley (SOX) to emerging standards like Revenue Recognition, midstream companies must adhere to multiple, highly complex internal controls as well as state and federal regulations. Are you confident that your plant accounting software ensures compliance across the board? If you are using legacy software, the answer is likely "no."
This blog series covers the top 7 reasons to replace your legacy plant accounting software. Previous topics include enhancing data transparency and accessibility, improving user experience, benefits of a unified platform built on the cloud, making upgrades painless, and eliminating Excel workarounds. This part addresses how legacy plant accounting software may put your organization’s compliance at risk.
Is Your Data Audit Ready?
Customers of legacy plant accounting solutions face risks such as lack of transparency into financial results and complex calculations. This "black box" effect often leads accountants to rely on spreadsheets to duplicate results or perform tasks their legacy software cannot handle. With multiple copies of accounting data, companies create multiple versions of the truth, which is problematic during internal reviews or external audits.
W Energy Software eliminates the need for spreadsheet workarounds and enhances data transparency and trust. The calculation trace (Calc Trace) feature provides a clear audit trail for system calculations, including settlement results, taxes, accounting results, and disbursement owner amounts. Users and auditors can backtrace financial results from gas statements to accounts receivable/payable. Many customers use Calc Trace reports to respond to inquiries about fee calculations. Additional tools, such as the Show Association Graph, help users identify where data objects are used, aiding in understanding the flow and internal relationships of data on screens like meters, formulas, and rates.
When Accounting Standards Change
As accounting standards evolve, your ERP software should adapt. W Energy Software offers flexible GL mapping at the contract level, allowing accurate application of new Revenue Recognition standards. Your chart of accounts may need to book different entities or contracts to different accounts. With the ability to categorize each valuation record to a different account, W Energy Software streamlines revenue recognition. The company continuously updates its knowledge of ASC 606 and other GAAP standards to ensure new accounting requirements are implemented. In contrast, other companies often wait for end-users to request updates to accommodate new regulations.
One-Click Regulatory Reporting
Users of legacy plant accounting software often resort to Excel for manual manipulation of financial data, including preparing state-specific regulatory filings. Working outside your financial tools can create uncertainty and compliance risk. W Energy Software offers out-of-the-box state regulatory reporting, eliminating the time and risk of manual preparation.
When selecting a plant accounting software solution, ensure you can quickly answer how calculations were made, account for ASC 606, and avoid any "black box" that complicates auditing.
This is part 6 of a 7-part series. Read part 7 here.
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