Transform your energy industry finance function


Technology investments lead to data-driven strategic insights


After a sustained period of high profits, many energy companies have cash on hand that can be reinvested boldly to sustain business success long into the future. While many of those dollars will be devoted to future operations, company leaders need to consider allocating budget toward modernizing finance processes at energy companies that are badly in need of upgrades


Now is the time for energy companies to invest in the technology and processes to radically improve their finance function efficiency. The result will be data-driven, predictive strategic insights that leaders can use to propel their businesses forward. But many energy company finance functions haven’t invested in the technology or harnessed the underlying data to support these improvements, and they continue to rely on manual, inefficient processes.


Meanwhile, leading companies and their third-party providers are using technology such as artificial intelligence — including generative AI — as well as machine learning and advanced analytics to streamline their processes and create useful insights. Rapidly emerging generative AI technology can introduce efficiency for back-office accounting functionality such as customer/vendor interactions via chatbots or more technical tasks such as drafting disclosures and variance commentary.

Headshot of Ben Chacko

“If you make investments in finance technology and processes now, you will be ready for whatever comes your way, from a surge in M&A to a market downturn.”

Ben Chacko

Grant Thornton Senior Manager, CFO Advisory


“There’s so much technology out there that’s very inexpensive and can make a big difference to your energy organization,” said Grant Thornton CFO Advisory Senior Manager Ben Chacko. “If you make investments in finance technology and processes now, you will be ready for whatever comes your way, from a surge in M&A activity to a market downturn. The sooner you create better, more efficient processes, the more prepared you will be.”


Spending on finance modernization may not appear to provide as much of a return on investment as acquiring a new oil field or solar facility that will increase production. But the benefits of a best-in-class finance function can help leaders operating in the volatile energy industry know where the financials stand in real time across business units, enabling predictive modeling analysis and therefore, nimble decision-making.


Be forewarned: Competitors in the industry are improving the functioning of their finance departments. These competitors are likely to decrease their costs to customers, which will give them an advantage in the marketplace.


Companies with modern finance functions can make better decisions on mergers and acquisitions, negotiate better prices from vendors and identify new markets that will be completely invisible to companies that don’t modernize their finance functions.



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Improve processes


Better energy finance processes lead to better decisions


The recent experience of an energy company that was struggling mightily with its accounts payable processes shows just how impactful finance modernization can be. With 30,000 invoices a month coming in through disparate processes and systems, the company was struggling to understand its cash flow.


Their purchase order process was broken. Vendors were not paid on time, resulting in poor relationships with key vendors. And financial reporting was a struggle as key data was missing and/or inaccurate. Grant Thornton’s professionals performed an assessment of the company’s procure-to-pay processes, identified gaps that would enable the company to fix the processes, and helped choose technology that would make the processes more effective and efficient.

Headshot of Bryan Benoit

“There are risks associated with not modernizing your finance function…Proactively assessing these systems and processes pays big dividends.”

Bryan Benoit

Grant Thornton Global Head of Energy and Natural Resources


This was an example of a foundational project, which typically is limited in scope and takes three to six months for a finance team to see immediate improvements, delivering quick wins for the business. A more transformational project with a broader scope usually takes at least six months and may address multiple processes and technologies across the entire finance organization.


Both types of projects can add tremendous value, and Grant Thornton Global Head of Energy and Natural Resources Bryan Benoit warns that energy companies that ignore or delay these opportunities may fall behind their competitors.


“There are risks associated with not modernizing your finance function. They could include a lack of competitiveness, potential deficiencies, missed opportunities, loss of talent, or even financial statement errors and restatements,” Benoit said. “The consequences resulting from archaic financial processes and systems are well-known and documented. Historically, we’ve learned that proactively assessing these systems and processes pays big dividends.”


Finance modernization insights from other industries


Where to start


Energy finance modernization may start with AP and FP&A


Energy companies most commonly need finance modernization help in two areas — accounts payable, as in the example stated above, and financial planning and analysis (FP&A).


FP&A historically has been performed at energy companies mostly through Excel spreadsheets.


“There are some great tools out there right now that enable predictive modeling analysis,” Chacko said. “Once you implement them, these tools can automate much of what you’re doing from a forecasting and budgeting perspective.”


A prerequisite for using those tools, though, is effective data management. Analysis of inaccurate or flawed data generally leads to faulty strategic insights, so the processes that collect data — such as invoice management in the example discussed earlier — need to deliver accurate, comparable, clean data to enable an effective transformation.


To reduce or eliminate flaws in data, an organization needs to:

  • Develop an understanding of how the data is structured.
  • Determine how the data needs to change for the future.
  • Create a roadmap for fixing the data, prioritizing changes that will provide the most value for the organization within the desired timeframe.

In accounts payable, meanwhile, there are new tools that help users automate the recording of the arrival of an invoice, the approvals of an invoice, and the payment to the vendor.


Processes that are almost uniformly manual now that Chacko envisions being increasingly automated at energy companies in the future are land management, division order management, and joint interest billing (JIB) workflows. Identifying potential resource collection sites, managing property rights and purchases/sales, and processing JIB and operating invoices can be time-consuming processes that could be made more efficient in the near future.


“In the next 10 years, I think this is going to be a big area of automation for oil and gas companies, but again, they will have to have their data correct and clean to even think about automating it,” Chacko said.


As with any transformative project, though, change management will be critical. The changes will be less disruptive for companies that communicate effectively with employees in finance and throughout the organization, as well as vendors, customers and other key stakeholders.


“You want to put together a communication plan so that the right people understand what’s expected over this time of transformation, both in the near-term and long-term vision,” Chacko said.


Strategic finance


Discover new energy finance trends and opportunities


One benefit of all this automation is a more engaged workforce. Your people will no longer be spending time manipulating spreadsheets; instead, they will be using the technology to monitor dashboards for anomalies that need further investigation and tease out trends that show up in the data, leading to strategic observations and recommendations. Attracting younger workers, in particular, may be easier when they know they will be using the latest technology in their day-to-day finance function duties.


Although companies in all subsectors of the energy industry need to modernize their finance processes, Chacko said upstream and energy services companies may be lagging behind other sectors and need to do more work to catch up.


He said even simple improvements can result in significant time and efficiency savings. He cited a recent engagement with an energy company that Grant Thornton helped with a thorough process mapping exercise.


One of the inefficient processes required the finance team to ask the sales team for certain data that the finance team should have had access to all along. Giving the finance team a view into the data sped up its processes by two days, making a huge difference in its ability to provide more timely outputs. “There are a lot of instances like that, where you can see the immediate benefits of improvements,” Chacko said.


Yet, there are many energy companies that still need to make these improvements. Chacko said energy companies, in general, have invested substantially in technology in other areas in recent years, but they’ve largely delayed improvements in their finance functions.



Data from Grant Thornton’s CFO survey for the first quarter of 2024 shows that companies across the industry spectrum are acting quickly to implement advanced technology. Within a year, a majority of respondents expect that their finance functions will be using AI (61%), machine learning (57%) and non-AI/ML advanced analytics (64%).


“It’s really time to start investing in modernizing your finance function, or you are just going to be left behind from a pure efficiency standpoint,” Chacko said. “If you invest now in your accounting and finance and back-office processes, it will set you up later for success.”



Bryan Benoit

Bryan Benoit is a partner in the US Strategy and Transactions practice and the Global Valuation Co-Leader. Further, he is a principal in Grant Thornton Financial Advisors LLC, providing fairness opinions and other board services. In addition, he serves as the US National Managing Partner, Energy.

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