Ensure revenue, analyze hedges and manage procurement risks with back-end software
With cost of fuel becoming increasingly volatile, your petroleum distribution business must manage risks across your inventory, suppliers, and customers. Using a back-end software that can also manage contracts, hedging, and risk allows for a granular look into your company’s profitability.
Below, we have compiled the three major benefits of integrating a hedging strategy within your enterprise resource platform.
- Ensure incoming revenue – In a volatile market, where prices rise or demand plummets, contracted volume from dealers or commercial customers might not be To reduce reliance on direct sales, companies may leverage contract hedges as a revenue stream against their inventories and supply contracts.
- Analyze hedges at a detailed level – With a system that can tie a hedge to every inventory load, your team will gain insight into gross margin and profit on every load, rather than making assumptions with a blanket journal entry of hedge This enables your company to manage inventory allocations and supply on hand.
- Manage risk within procurement – With an embedded logistics solution, hedges can be viewed at the individual order level and throughout the shipping and logistics process. As such, you can ensure you are satisfying a contract as order volumes decrement off an associated contract.
If you are a supplier or dealer looking to include a hedging strategy to your business model, it is crucial to work with enterprise solution that integrates accounting and logistics while embedding contracts, hedging, and risk management at a detailed level. With the right hedging strategy and tools in place, you can navigate a volatile market with clarity and certainty.
To learn more about how iRely can help, please reach out to Dylan.Gamboa@irely.com
Senior Vice President, Petroleum Distribution and Retail