As a continuation of our 7-part blog series on the Seven Deadly Sins of Oilfield Service companies, this week we’re diving into Sin #5: lack of internal financial controls.
The 5th Deadly Sin:
Lack of Internal Financial Controls
In our experience, we’ve seen that there’s a direct link between profitability and internal financial controls – likely for any business, but especially when you’re an oil & gas product and/or services company. When controls are absent, profitability cannot be taken for granted. A few years ago, in fact, one VistaVu client earned just $50,000 in profit on $15 million in revenue. Despite being a respected player in the market, this company had next-to-zero control over approvals, budgeting, authorizations and job costing.
“A company without sound internal financial controls will find it difficult to grow,” says Jory Lamb, President & CEO of VistaVu. “You won’t have the money to invest in new technology to make the workplace more efficient, safe and environmentally friendly. You won’t have the money to pay people more as they grow in their jobs. Your best people will leave and ultimately, so will your best customers. That’s how important internal financial controls are.”
