A committed cost is the obligation to pay a good or service at any future time. Good practice is to treat all agreements for goods and services (even verbal) as committed costs as the work is performed. Examples of committed costs are:
- A verbal purchase order to purchase an item
- A service provider expends time on your project that he intends to invoice for at some future time.
- A formal purchase order is issued for a piece of equipment for a project.
- An engineering firm spends hours working on a detailed cost estimate.
Accountants expect committed costs to be accrued for either monthly or quarterly and most definitely annually. Committed Costs are to be accrued for in the month that the “work” is performed. Please note Committed Costs are in advance of an invoice being issued or paid.
BOSSES HATE SURPRISES!! How do you think your boss would view your performance if you could provide him each day with the information as shown below:
|Variance C.E. to Orig. Bud. ($)||Total
|Variance Tot. Comm. to Curr. Est. ($)|
|Star Oil & Gas Ltd.||Drilling||115D12352||101/02-24-025-26W4/02||$820,000||$930,000||-$110,000||$420,000||$510,000|
|Star Oil & Gas Ltd.||Workover||116W21356||121/06-36-052-45W2/01||$25,000||$32,000||-$7,000||$23,000||$9,000|
|Star Oil & Gas Ltd.||Facility||115F21355||100/02-24-062-15W6/04||$250,000||$240,000||$10,000||$200,000||$40,000|
|Venus Petroleum Corp.||Completion||116C32654||131/05-10-020-10W5/01||$1,000,000||$1,200,000||-$200,000||$1,000,000||$200,000|
|Venus Petroleum Corp.||Workover||116W21365||100/02-12-010-10W1/00||$30,000||$25,000||$5,000||$22,000||$3,000|
|Venus Petroleum Corp.||Facility||115F65845||100/06-36-052-24W5/00||$1,500,000||$1,750,000||-$250,000||$300,000||$1,450,000|
|Saturn Exploration Ltd.||Drilling||116D65897||101/05-21-012-14W2/00||$5,500,000||$4,300,000||$1,200,000||$100,000||$4,200,000|
|Saturn Exploration Ltd.||Completion||115C98754||100/01-02-012-30W2/00||$500,090||$400,030||$100,060||$240,000||$160,030|
How Does it Work? (Click here)
How does it work?
- Pay $14.95 for each project day.
- No other costs, no software to install, no IT people to involve.
- Software-as-a-Service (saas) is the model.
- Fund your myOilfieldSupply Software Account and start today. The balance will drop with each submitted Daily Report. You will be warned when to replenish your myOilfieldSupply Software Account once balance falls below $200.
- Bill the service to your project.
- For a small fee we will set up your AFE templates, your Cost Center Templates (Op-Ex) and even set up your AFE’s (Budgets). You will be up and running within hours.
Send us your AFE Templates, Cost Centre Templates, AFE Budgets, OP Ex Budgets for input today! You will be using the system within 24 hours! (Click Here)