Difference at Closing

The Run Closing Summary report appears every time you close a run. It is important to review this after every closing to make sure that everything was entered and processed correctly. If any differences are showing you should not proceed any further until you have corrected the difference. When a difference does occur, a few reports can be very helpful in determining the problem.

Difference Box
The three amounts in the Difference box show you the difference between the amount of revenue, expenses, and taxes that were entered or allocated to the wells and the amount that was allocated to all of the owners. If a difference is showing then you are not allocating the correct amounts to each owner. Differences are typically from an oversight in data entry or setup.

If you have a difference less than 50 cents then it is usually related to rounding. Anything more than 50 cents should be looked into.

Auditing a difference
Almost any rounding difference should be able to be found with the reports mentioned below. A difference on the Closing Summary can be caused by many different situations so you will have to use your investigative skills while looking at these reports to recognize any patterns or numbers that stick out.

Once you have determined the issue causing the rounding, open the run to make any adjustments. After the corrections are made, view the Well Revenue Operating Summary again. At the bottom each page you can see if a rounding amount is still showing for each well. Once all corrections are finalized you can close the run again.

If you had a difference but have already sent out checks you should not open the run. This would ruin your audit trail for the checks that were sent out and can cause a big mess. If checks are printed for a run that had a difference you can follow the same steps to identify the issue causing the rounding, then use the Well Revenue by Well or Well Expenses by Well window to make any necessary adjustments on the next run closing.

If this information does not help you find what is causing the difference then let us know and we may be able to either direct you further, or look into it in more depth for you.

Revenue Run Closing Summary by Well:
The first step to find what is causing the difference is to view the Revenue Run Closing Summary by Well. This breaks the report down by well so you can determine which well(s) are contributing to the difference. This report is found under the Other Reports menu by choosing "Revenue Run Closing Summary". Mark the option to "Print Report by Well".

Check Division of Interest Report:
The Division of Interest Reports can also be beneficial in determining why a difference occurred. The most common problem causing a rounding amount is that the Division of Interest is set up incorrectly. You can view the Check Division of Interest report from the utilities menu to verify all interests add up to 100%.
You can also double check the wells interest on the Division of Interest window or by viewing the Well Interest/Listing report with the option marked to include owner interests.

Well Revenue Operating Summary:
The third report to analyze is the Well Revenue Operating Summary. This will show you all revenue and expense details that were entered for each well on a run as well as the totals that were allocated to each investor. View this report for wells that are having a difference.
Look for anything that sticks out that may be contributing to the difference. An individual amount may be the same as the difference, or it could be several amounts together that make it up. It could be an owners portion of an expense, or a few owners together that make it up.

Well Revenue/Expense Detail
The Well Revenue/Expense Detail report will display what was allocated to the wells. The total on this report will match the total Revenue/Taxes/Expenses Processed on the closing summary. This is similar to the Well Revenue Operating Summary but will not include the owner's share and will give you more detail for each revenue and expense item. Again, check to see if you can notice any similarities between these amounts and the difference. This report shows the net and gross amounts for each item as well as the specific class for each expense.

Owner Distribution Statement
The Owner Distribution Statement will display what was allocated to the owners. This report will be showing what would be included in the Revenue/Taxes/Expenses Allocated To Owners section on closing summary.

JIB Closing
The information in this topic is using the windows related to the Revenue Run closing. If you have a difference on the JIB closing, the general idea listed above is the same. You will just use the Well JIB Operating Summary, Well JIB Expense Detail, and Joint Interest Billing Statements instead of the reports listed above.

Common Discrepancies
- The interest for a "Dummy" or "Direct Paid" owner was changed after revenue/expenses were entered and before the run was closed. The solution would be to open the run, resave any revenue/expense entries, then close the run again.
- Division of Interest Does not add up to 100%. The solution is to open the run, fix the DOI, then close the run again.
- Look at the "Class" column on the Well Revenue/Expense Detail report. Did you use any classes other than the normal working interest(0) class? If so make sure that the DOI for that class in the well adds up to 100%.