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Efficient Inventory Management with RightAngle’s WACOG Implementation

Looking to Manage Inventory Costs for Liquid Commodities Effectively?

Conventional manual methods and third-party systems might not provide the needed real-time accuracy for inventory costs and valuation. Additionally, calculating costs for individual units of inventory, especially within a range of contracts, can be time-consuming. The introduction of RightAngle’s latest version, S24, featuring the Daily and Monthly WACOG by Contract capability, addresses the need for accurate, real-time inventory valuation.

Unlike traditional methods that struggle to reflect daily commodity price fluctuations, the new feature in the latest version of RightAngle closely inventory valuation with market dynamics, benefiting businesses with high daily sales volumes. Implementing inventory valuation methodology of WACOG in an integrated system like RightAngle streamlines inventory management and enhances risk and accounting practices. We recommend that our clients embrace RightAngle’s WACOG method, as it offers a comprehensive remedy for efficient inventory and accounting management

The latest RightAngle feature allows inventory data to flow into accounting for both mass and volume, providing the option to choose which metric to send to the financial system. This solution capitalizes on industry-specific attributes, tailoring options, and alignment with regulations, all of which combine to enhance effectiveness, accuracy, financial gains, and competitiveness

Addressing Inventory Cost Challenges

Challenges in managing inventory costs accurately are widespread. Manual methods can lead to inefficiencies, errors, and compliance risks that affect decision-making. The absence of real-time inventory data visibility can hamper competitiveness, and the complexities of calculating costs for liquid products are a recognized concern. Current complexities involve disjointed systems, manual calculations, lack of integration with workflows, and the inability to capture frequent price fluctuations inherent in liquid commodities, which ultimately leads to inaccurate cost estimates. Additionally, the continuous flow nature of liquid commodities makes precise inventory tracking difficult, as factors like shrinkage, blending, and measurement inaccuracies can lead to discrepancies in quantity and cost assessments. Managing inventory across various storage facilities, determining appropriate pricing points for cost allocation, and adhering to regulatory standards further contribute to the complexity of the process.

Commodity companies will employ specialized ETRM software and other peripheral systems to address some of these challenges however even then other issues like maintaining data integrity, resource-intensive inventory data updates, error-prone reconciliation processes, and the manual marking of transactions are prevalent in accurately tracking inventory costs and value. 

Benefit from Real-Time Insights, Customization, and Precise Reporting

Selecting RightAngle for implementing WACOG inventory valuation for liquids commodities offers several advantages over other ETRM solution alternatives. The integration of WACOG modeling into RightAngle is customized to suit the business’s needs, utilizing the platform’s robust reporting capabilities. This encompasses features like contract-based cost tracking, flexible pool-based cost calculations, and daily WACOG reports for precise cost insights.

Contract-Based Cost
Tracking

Pool-based Cost
Calculations

Monthly & Daily WACOG Reports

To optimize RightAngle’s inventory valuation, we recommend creating custom reports that consolidate diverse data points, streamlining inventory management. For example, we developed tailored reports for a client by integrating data from multiple sources, including the Physical Inventory Interface, to estimate daily end-of-day inventory. Our solution also uses the Terminal Data Staging Interface for data validation and the Search Terminal Inventory Recon Interface to compare terminal net quantity with transaction records, ensuring accurate reconciliation.

The latest RightAngle release(S24) optimizes inventory management and valuation with mass-based inventory, improving accuracy over volumetric data. It enhances Monthly and Daily WACOG for blended products using component quantities from Movement Documents or Balance Configurations. The Inventory Flow to Accounting now supports both volumetric and mass data, ensuring accurate P&L reporting. Risk management is improved with daily mark-to-market WACOG risk reports and the “Use Zero Values to Market” feature for sharper valuations. The release also supports prior period adjustments, streamlined accounting, seamless downstream integration, tailored reporting, and real-time data access for better decision-making in dynamic trading environments.

We advise clients to focus on unique business contexts and leverage RightAngle’s specialized capabilities in WACOG by contract, WACOG by pool, and Daily WACOG calculations. This tailored approach, aligned with industry best practices, sets our recommended implementation of RightAngle features apart from other available options and ensures that it precisely meets the client’s current situation and needs.

Strategic Edge: Enabling WACOG Implementation

The utilization of RightAngle for WACOG implementation for an organization brings a multitude of advantages, specifically tailored to meet the unique needs of the liquid energy industry:

Effective Cost Allocation

WACOG by Contract provides detailed cost insights for better financial control. WACOG by Pool offers market-responsive cost calculations.

Daily WACOG by Contract

RightAngle recalculates daily WACOG, aligning costs with market fluctuations, vital for accurate decisions and risk management in industries like retail fuel.

Holistic
Approach

RightAngle tailors to client needs, offering a dedicated team for success. Partner with experts for a comprehensive solution that drives success.

Smooth
Integration

Seamlessly integrating RightAngle optimizes data flow, boosting efficiency across functions.

Strategic
Insights

Leverage specialized WACOG reporting for real-time informed decisions and market competitiveness.

RightAngle
Customizations

RightAngle's customization aligns tools with business goals, enhancing performance without compromise.

Ready to get started?

Explore our suite of solutions designed to empower your trading and risk management functions. Partner with us for a transformative CTRM experience that drives success in today’s ever-evolving markets.