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
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.
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.
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.
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:
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