Top 3 Reasons Upgrading To Allegro Horizon Is The Right Move For Petroleum Product Suppliers and Marketers

In a former post, we outlined the functional and technical enhancements included in the Horizon 145 release.  However, many petroleum industry users still struggle with the question, “Is it worth it to upgrade to Horizon?”  In response, we scoured the release notes from last December to date and searched for the specific functional and business benefits for petroleum product suppliers and marketers to upgrade to Horizon.

 

We discovered three primary areas where petroleum users will see significant improvements with Horizon. These include:

#1 Inventory Management

#2 Accounting

#3 Architecture

Let’s dive right in…

 

#1 Inventory Management

 

In this release, Bookouts, Process (around blending), Fractionization (NGLs, Crude Oil refinement), and Shipments have not changed.  However, shipments within a location will now be labeled a shipment type of Transfer. Every time a shipment is created within a location, Horizon will assign a shipment type of Transfer. This can also be assigned by a carrier.

 

Recognizing Losses and Gains

In Allegro Horizon, you can now more accurately track product losses and gains between receipt and delivery.

 

How this works in Horizon

The upgrade addresses the age-old issue of capturing pipeline loss by pipeline type.  This was a tedious and repetitive process in former Allegro releases.  Now, Horizon captures loss without having to manually configure it each time by pipeline or carrier.  In the upgrade, this is done within a new table to automatically capture the difference between the Receipt and Delivery quantities in the Actuals for shipments.

 

For example:

If the Receipt quantity is greater than the Delivery quantity, it will record a quantity Loss for the shipment. If the Receipt quantity is less than the Delivery quantity in Actuals, it will record a Gain. This method will create the pipeline loss based on the quantity nominated (Receipt) and the quantity Delivered (actual delivered for the pipeline statement).

 

This will capture the automatic loss the pipeline calculates and display it in the Physical Inventory Position reports by shipment, which, in turn, will total the loss for the pipeline.

 

Why this matters to your business…

This new approach to recognizing losses and gains enables you to reconcile your physical inventory more easily and alleviate reporting incongruities. Matching the Physical Inventory Position reports in Horizon with the Tank Inventory(s) reports from storage facilities gives traders and accounting team members more accurate inventory numbers in Horizon.  The upgrade also displays the accurate losses, receipts and deliveries for each shipment.

 

 

Locking inventory for the month

In the past, Allegro did not allow for inventory locking.  This meant inventory accruals had to be used to set monthly inventories based upon an accounting month.  This work around made generating accurate inventory reports difficult.

 

How this works in Horizon

Users can lock-in inventory for the month without having to go through the inventory accrual process.  When locked, inventory quantity and location updates are stopped.  Changes are possible, but only when the monthly inventory is unlocked.

 

For example:

The Inventory is set by entering the month, timeframe, product type and location.  Even though adjustments were made to the former month, it will not affect the numbers saved for the present month’s closing inventory. Essentially, it locked down the inventory for the reporting month. Shipments can be created, and Actuals can be entered, but they will not affect the locked inventory. They will be assigned a pending status until the inventory is unlocked.

 

Why this matters to your business

Horizon enables you to avoid having to account for inventory accruals saving time and making monthly inventory reporting more accurate. Monthly reports of Open and Close Inventory locations can be recalled at any time. Any prior period changes will be included in the next month’s reports. The Inventories can be frozen, marking a Closing Inventory for a month that won’t change.

 

 

#2 Accounting

Accounting teams have always wanted the ability to lock Inventory in Allegro to prevent any other new actuals, updated actuals and prior period adjustment to actuals. Horizon makes this possible by using the same function for Inventory locking for locking actuals and controlling the data for Settlement/Accounting.

 

How this works in Horizon

In effect, this locks out any changes to Settlement and so, denying any more transactions to be created in Settlement. Shipments can be created, and Actuals can be entered, but transactions will not be affected or new transactions will not be created in Settlement. They will be assigned a pending status until unlocked. So, no changes are accepted.  Horizon will not create transactions based on physical actuals.

 

Why this is important for your business

Horizon alleviates the need for accounting workarounds and reduces risk of miscalculation. Thus, it makes timeframe comparison reporting more straightforward.  Executive reporting is streamlined, which makes your life easier.  In Horizon, accounts can execute a true month-end close giving you the confidence you need knowing the financial numbers won’t change because of last minute additions.

 

#3 Architecture

Significant improvements have been made to the process for setting quantity parameters and extending Allegro in Horizon. Let’s take a look:

 

How this works in Horizon

If you’re challenged by having to reset your Quantity Parameters for every commodity type, Horizon solves this in a new view pane within the System Administration Parameters.  Now you can set a default for the mass unit and volume unit when new products are added by commodity class. When a new product is updated to the Product view, in the product pane, it will default the mass unit and volume unit for the Quantity Parameter based on the commodity class of the product.

 

Horizon’s Liquid Valuation API is more flexible allowing extensions or hooks for extensions to be applied.  For example, if you wanted to change the way the market price is calculated for a product or location, an extension or class event can be applied to the table to calculate the desired pricing.  You can also use hooks to derive a result outside of the base functionality.

 

Why this is important for your business

The new Quantity Parameters setup saves time and alleviates data entry errors.  Likewise, the Liquid Valuation API enhancements accelerate speed and improve valuation accuracy for mark to market, index and exposure.

 

 

The big question, is Horizon worth it for Petroleum Products users?

We think so, and so do our clients.  Horizon’s 145 release and subsequent updates released this year allow you to efficiently track inventory, streamline accounting, and realize performance improvements with architectural changes.  Horizon will save you hundreds of person hours, ensuring you have more accurate inventory actuals, alleviate accounting workarounds, and help you get a lot more out Allegro.

Want To See Your Path To Horizon?

We’ll show you our approach and what you can expect.

Value Creed, LLC, founded in 2016, is a managed services firm headquartered in Dallas, TX, specializing in commodity trading and risk management technology and business process optimization. The firm offers expert-driven managed services, business process outsourcing, cloud enablement, and CTRM complimentary technologies to help CTRM customers achieve optimal value in their software investment. For more information, visit www.valuecreed.com or call (833) 282-7333