Oilfield service companies can experience cash flow problems that arise due to high expenses needed to continue operations. Equipment, personnel and other necessary items needed to run the business can’t be delayed. Everything needs to be paid in a timely manner even though a majority of oil and gas businesses don’t pay invoices on expected terms. Many go well over 30 days and may go well over 90 days. This can really cause chaos with the cash flow. Many in the oil and gas industry may turn to factoring which isn’t a good long-term solution and energy loans may be difficult to obtain especially from some regional banks.
The oil and gas industry is made up of large corporations as well as small self-employed individuals. Jobs are constantly changing and invoices get overlooked, lost or shoved to the side to be paid “later”. When a customer stalls or seems to go missing and can’t be contacted, it’s time to act. Most oil and gas companies have some internal process that successfully recovers most of the outstanding receivables, but they aren’t going to recover everything. This could end up being hundreds of thousands to even millions of dollars that aren’t being recovered. A recent analysis by Sageworks found that the oil and gas industry is the second highest in number of days of outstanding receivables at over 110 days.
As a recognized leader in receivables management for over 20 years we understand the volatility and uncertainty of the oil and gas industry. In 2020 over 100 oil and gas companies went bankrupt. The total dollar amount involved was over 100 billion dollars. This bankruptcy cycle started in 2015 and just in the last year this trend is slowing down, but in 2021 there was 2.1 billion dollars as part of the bankruptcy filings.
Southwest Recovery Services provides strong recovery results on accounts that become 90 days past due or beyond. Our extensive experience in the energy sector allows for cost-effective and maximum recoveries. We possess the ability to work through difficult and disputed accounts. Issues with purchase orders and invoices are a huge reason for non-payment and our teams know how to work through these accounts successfully.
What we can provide:
Contact us today to get your past due oil and gas accounts resolved!