Saudi Petroleum Overseas Ltd.

Saudi Petroleum Overseas Ltd is the European sales office of Saudi Aramco, the largest oil producer in the Middle East. Of eight million barrels produced every day, the company directs its affiliated tankers and chartered fleet as they ship two million barrels of crude a day to refineries and distributors throughout Europe, the Mediterranean and the United States.

From their London office the company perform assisted sales, which involves negotiating annual contracts and monitoring their performance. They do not buy or sell oil themselves. They are responsible up to the point of contract and it is their parent company in Saudi Arabia who enters into the contracts negotiated by them. This way of trading minimises the impact of UK taxation and has made them very stable financially. It means, however, that they are subject to exceptionally stringent auditing and must account in two currencies, Pounds Sterling and US Dollars, at all times.

The company’s finance department services three separate departments in London and one in Southampton (Crude Marketing, Refined Products Marketing, Transportation and Career Development). It provides services to three group companies based in Saudi Arabia; Saudi Aramco, Bolanter and Vela. For obvious reasons, IT compatibility with work colleagues in London and in Saudi Arabia is of paramount importance. Microsoft Windows has been adopted across the company for some time. The company was among the first to move to Windows 95. For technical reasons, London use both Windows NT Server and Novell. Interestingly, they have also standardised on Dell hardware which they prefer because of reliability and excellent after sales support.

In order to improve management reporting, the company decided to invest in a Windows-based accounting system. Responsibility to research the market for the best package fell to finance manager David Patterson, who describes himself as an ‘accountant with systems know-how’. Supplementary IT skills were outsourced from a networking consultant. Patterson’s expertise as both a qualified accountant and a former manager of group consolidation systems at Shell, placed him in an immediately strong position for selecting the right software application.

Attending a software seminar at the Institute of Chartered Accountants helped Patterson draw up a checklist of points to look for and vendors to watch in the software market. During a subsequent visit to Softworld in 1993, he saw one Windows accounts product that offered extremely fluent integration with other Windows software. This was important since spreadsheet standardisation by all departments on Microsoft Excel took place at the same time as their to move to Windows. The ability to export reports straight to file was a huge attraction to Patterson, particularly since he could see the potential for producing all management reports in a variety of formats very easily. After an in-depth demonstration in the London offices, Patterson was satisfied the system he was looking at was right for the company’s use and he put forward his recommendation to buy it.

Saudi Petroleum Overseas chose to invest in both Access Accounts and Access Payroll. They opted for on-site user training to take advantage of the range of features the system had to offer. After three days training, all users felt entirely confident to continue on the basis of Patterson being the first line of support for internal queries.

A new chart of accounts was devised by Patterson to better reflect the company structure. He adopted a seven figure coding structure to the Nominal Ledger whereby the end two digits are used for primary sorting by department. This has helped make departmental reporting painless. Patterson said: “It is always possible to have better everything, and that includes Nominal Coding structures. Whereas better structures cost more money, I believe Access Accounts provides the best value for money for our purposes.”

The implementation was conducted by Patterson assisted by an accountant from the parent company in Saudi Arabia, who spent one week in England to help ensure that accounting policy methods used in Saudi were considered. The parent company’s books are held in Saudi Arabia on a bespoke accounting system.

After the initial set-up was completed and seen to work in single user, single currency mode on Patterson’s Windows-based PC desktop, it was upgraded to the multi-currency version and deployed across all users in the finance and administration division on the Windows local area network.

Good initial training has meant a high level of user confidence in the system and minimal use of the telephone Helpdesk over the last five years.

The payroll system is fulfilling its intended role, tracking pay and personnel records for twenty four permanent UK staff plus overseas staff on secondment. The system makes payroll entries very straightforward. For simplicity, Patterson has chosen to outsource the pay run to a managed services provider. The in-house Access Payroll system easily outputs pay data to file which is then transferred electronically to Centerfile using the provider’s software.

David Patterson added “Access Accounts saves me so much time the way I download information to and from spreadsheets.”

“The dual based currency accounting really won our hearts because it is so distinctive to Access. We don't use it like a run of the mill company would, we have specific dollar and sterling books. Our parent company insists we run our books in both currencies and the Access system is still being used in Singapore by a subsidiary company.

The key success of the system is its ability to export data directly to spreadsheet files. Patterson uses a standard report within Access Accounts to create a detailed trial balance and exports this to spreadsheet. Using macros he devised within multi-sheet Excel documents, data is manipulated to form a range of financial reports which comply to UK GAAP and US GAAP without ever re-keying any information. These include company Profit & Loss, split P&Ls across both Pounds Sterling and US Dollars, Balance Sheets and Corporation Tax returns.

Patterson has been able to meet all reporting and data processing deadlines set down by the parent company in Saudi Arabia. For example, Year End reports are produced on time by the third working day after closing off the year. These reports have to compare actual to budget and include an estimated value for UK Corporation Tax. Invoicing is completed within five days of the end of each accounting period.

The flow of timely financial information within the organisation has been improved which means that non-financial managers in other departments have been able to benefit from the company’s choice of accounting system.

At the point of purchase, the system was 50 per cent less expensive than any comparable multi-currency software available.