Patent Abstract:
A transaction processing system facilitates the buying and selling of commodity products by establishing a single documentary record for the transaction, requiring approval of variables introduced into the transaction. The parties register and agree to a standard contract of terms. For each transaction, the unique data for that transaction is entered by the parties and then must be affirmatively approved. Next, a schedule for delivery of the product is developed in conjunction with an overall schedule for product delivery for all of the current transactions. After the product is delivered, a product delivery report is provided from the delivery asset specifying the volume of the product, its composition, and shipment. This information, in conjunction with the transaction contract, are utilized to produce invoicing data. The parties must affirmatively approve the invoicing data prior to the production of payment statements by the system.

Full Description:
TECHNICAL FIELD OF THE INVENTION 
   The present invention pertains in general to electronic commerce and in particular to the trading of commodity products by use of a single contract and terms. 
   BACKGROUND OF THE INVENTION 
   An extremely large market exists for commodity products such as crude oil and refined light oils. There are many thousands of transactions per year for many billions of dollars of product. The traditional marketing of these products has been performed by traders who work for the buying and selling businesses by entering into a series of transactions for the purchase and sale of the crude oil or refined light oils. Since the transactions are repetitive, the parties typically use a previous contract and modify it for the current transaction. A document is either exchanged between the parties and marked-up, or each party maintains its own copy of the contract and enters the current transaction parameters based on telephone calls or faxes exchanged between the traders. A transaction may be finalized between traders without the formal execution of a signed document between them. In other cases, there is such a finalized document. Next, the scheduling of the product delivery is typically performed by schedulers who are employed by the buying and selling businesses. The scheduling is very complex because the availability of the product and the consumption of the product varies tremendously over time. Further, petroleum products are primarily transported through pipelines and the availability of the transportation facility cannot be planned far in advance. The optimum use of the transportation facilities requires a knowledge of all the transport that is required from all of the parties. The transaction is further complicated by the variation in the composition of the product such that the exact value of the product cannot at all times be predicted in advance. Thus, in many cases the volume of product and the composition of the product cannot be known until after the product has been delivered to the buyer. 
   The traditional system is time consuming and subject to mistakes and controversies. If the parties maintain separate records, there can be a later dispute over the actual terms of the agreement. The method of determining price can be ambiguous even though it was apparently agreed to by the traders at the initiation of the transaction. Although using the same words, the parties could actually be using different methodologies in calculating a price. Further, each of the, parties must update various incompatible systems within its own business with much of the data for the transaction, scheduling and settling. Thus, the same data must be repeatedly entered by different people within each of the businesses. This often leads to mistakes that cause controversy with the other party and require a great deal of time to resolve and can result in the business having to write off substantial sums of money due to the inability to prove or reconcile the transactions. 
   Electronic trading systems have been established for dealing in many kinds of products, including commodity products such as crude oil and refined light oils. These trading systems, however, are limited to bringing together parties who can establish the initial trading parameters for a transaction, but beyond that point the parties are subject to the usual difficulties of ambiguous terms and inexact knowledge until after the transaction has been completed. Electronic trading systems can assist businesses in making trades, but many of the inherent problems of traditional trading are still present. 
   In view of the above problems, there exists a need for a unified trading system that eliminates the ambiguities in agreements, tracks the transaction through to completion and mandates that the parties are in agreement on all the data at various stages of the transaction. Such a trading system can assist the industry in many ways by providing tracking information. It can further be used to provide data for assuring lines of credit to participating parties. 
   SUMMARY OF THE INVENTION 
   A selected embodiment of the present invention is a method for processing transactions through a computer network for supporting the trading of a commodity product between a plurality of parties. A standard contract is maintained in the system and all participating parties agree to abide by this standard contract. The parties to a particular transaction supply the information related to that transaction and create an instance of the standard contract which is then populated with this information. The instance of the contract is made available to the buyer and to the seller for their review and approval. Each of the parties must submit an approval to the system in order to continue the transaction process. Upon receiving the approval, each party has affirmed acceptance of the instance of the standard contract. The parties then provide scheduling information which may be entered by one or both of the buyer and seller. The system maintains a comprehensive product delivery schedule for all of the parties that are involved in the system. It generates a product delivery schedule for the particular transaction. The information in this schedule is derived from the instance of the standard contract and the scheduling information. The product delivery schedule is made available to the buyer and seller for approval. Upon acceptance of the product delivery schedule, the buyer and seller submit an affirmative approval to the system thereby affirming their acceptance of this stage of the transaction. The system next generates a product delivery schedule transmitted to a delivery asset, which may be a pipeline company. After the product has been delivered, the pipeline company provides a product delivery report that identifies the volume and composition of the product that was delivered. Upon receipt of this information, the system generates a product transaction invoice that is based at least on the product delivery report and the instance of the standard contract. This product transaction invoice is made available to both the buyer and seller for review. Both parties must approve this product transaction report and send confirmation of acceptance to the system. Upon receipt of this approval, the system generates payment statements to the buyer and seller based upon the approved product transaction invoice. 
   In a further aspect of the invention, certain tables of data are provided to supply information for the instance of the standard contract, the schedule, and the invoicing data. 
   In a further aspect, certain portions of the information stored in the system are available to all parties who are participating, other portions are available only to the participants in a particular transaction and certain proprietary information is stored for each of the parties in association with the instance of the contract and this information is available only to the parties that supplied the information. 
   In a still further aspect of the present invention, a financial institution can extend lines of credit to parties and then through monitoring the information available in the system, determine the extent that the line of credit has been utilized and prevent the party from exceeding this available line of credit. Sellers in such a system can be assured that payment will be made for the product purchased by the buyers. 

   
     BRIEF DESCRIPTION OF THE DRAWINGS 
     For a more complete understanding of the present invention and the advantages thereof, reference is now made to the following description taken in conjunction with the accompanying drawings in which: 
       FIG. 1  is a schematic illustration of the principal entities involved with the present invention and the communication between these entities; 
       FIG. 2  is an illustration of crude oil transfer from producing wells through transfer stations to a refinery; 
       FIG. 3  is a time sequential block diagram of processing steps for parties, a to carrier and a computer system for illustrating the present invention; 
       FIG. 4  is a block diagram illustrating additional aspects of transaction processing by the parties and computer system; and 
       FIGS. 5A and 5B  are flow diagrams illustrating functional steps performed for processing and supporting a transaction. 
   

   DETAILED DESCRIPTION 
   The present invention provides both a trading system and a support structure so that the trading can be integrated into the business operations of each of the parties participating in the trade. Further, it provides continuous and ongoing support for the business activities of the parties. Traditional electronic trading systems match up buyers and sellers for a particular product. Once agreement has been reached for the terms of a transaction, nothing further is required of the electronic trading system. However, certain types of products and transactions do not fit within this traditional structure for electronic commerce. In the field of commodity trading, particularly for crude oil, it is not sufficient to merely bring together a buyer and a seller for a particular transaction. Unlike products and services which can be clearly and precisely defined, the purchase and sale of a commodity such as crude oil, together with business integration, must be done in a different manner. 
   Transactions are often made for the purchase of crude oil before the oil itself is pumped from the ground, in contrast to purchasing a known and available product which is in inventory. The actual production and transportation of crude oil does not necessarily match the initially contemplated terms in a transaction. Due to many factors, it is possible that the requested quantity of product is simply not available or a particular production cycle may be more efficient with a greater quantity. Crude oil comes in a wide variety of grades together with graduations of these grades, and the value of the crude oil depends upon these characteristics. One primary characteristic of crude oil is its gravity, which is a measure of density. This measure is expressed in degrees. 
   Crude oil is classified according to its grade by a title which defines the type of crude oil typically produced in a region. For example, one benchmark measure of crude oil is termed West Texas Intermediate (WTI). The presence of sulfur in crude oil affects its value and is a defined class for many types of crude oil. For example, there is a West Texas Sour (WTS) which is a grade of oil that contains a greater amount of sulfur than WTI. 
   The price for a commodity can vary from day to day. In some cases the parties may agree on a fixed price for the commodity being purchased, but in other cases the parties may prefer to have a market valuation at the time of delivery or an average of such a valuation over a period of time. In such a circumstance, it is not possible to determine the final value of the transaction until it has been completed and the reference data for the price is available. 
   A significant problem involved in complex transactions is that the same information must be keyed into multiple non-connected processing systems. With the volume of information being keyed, there can be frequent errors which cause later problems that requires time and effort to resolve. 
   The present invention is described in reference to a trading and support system for the commodity crude oil. However, the present invention can be applied to the trading of any commodity, and is particularly applicable to the trading of such commodities which have variable or undefined parameters as described above. 
   The present invention is also applicable to light oil products such as gasoline, diesel and jet fuel produced by refineries, as well as natural gas and gas liquids. These products are likewise purchased and sold as commodities, scheduled for delivery and transported through pipelines as well as delivered by transport trucks. 
   Referring to  FIG. 1 , there is shown a network  20  which includes a communication fabric such as Internet  22  for providing communication in a conventional manner between a plurality of entities. Any communication fabric can be used, such as the public telephone system. The businesses which utilize the present system can be a large number of parties, which are represented by parties  24 ,  26  and  28 . Each of these parties can be a buyer, a seller or both at the same or at different times. The commodity traded in the described example, crude oil, is transported by entities which are referred to as pipeline assets, such as  30  and  32 . These are pipeline companies which transport crude oil for a published price that the parties must pay for the physical transportation of the product. The pipeline assets provide further services in addition to transportation. These include measuring the actual volume of product transferred, measuring the gravity, and specifying the grade for the product that is transported. 
   Further referring to  FIG. 1 , the trading operations of the present invention are performed through a computer system operated by an application service provider (ASP)  34 . The various entities shown can communicate with each other through the Internet  22  and this communication can be made secure by use of conventional cryptographic or other security techniques. 
   In a general overview, as shown in  FIG. 1 , two parties, such as  24  and  26 , determine through their traders the general terms for a transaction for the purchase and sale of a commodity, and this information is stored in the computer system provided by the application service provider  34 . Before becoming members of the system which utilizes the application service provider  34 , the parties agree upon a standard contract and agree to be bound by this contract whenever it is implemented through the application service provider  34 . After the terms of a contract between parties  24  and  26  have been agreed upon, the parties must then determine a schedule for delivery of the product. This is done by a scheduler for each party. After a schedule has been established, a delivery report, also termed a nomination, is sent to one or more of the pipeline assets, such as  30 . The selected pipeline companies provide transfer of the required product and measures both the quality and volume so the parties can reach a correct determination of payment for the delivered product. This information from the pipeline company, termed the “actuals,” is provided via the Internet  22  back to the application service provider  34 , and can also be provided to each of the parties. 
   A single copy of the transaction contract and the related information is maintained at the service provider  34 . This contract is provided to the parties  24  and  26  so that both of the entities are working from a single document. This substantially reduces confusion and disputes as compared to a system in which each party maintains separate documentation of the transaction or if draft contracts are exchanged back and forth between the parties. After the physical transfer of the product has been completed, the application service provider  34  generates information for invoice clearing, and payables. The parties  24  and  26  are advised as to the payment obligations of the transaction so that they can make the appropriate financial payments and plan receipts of payment. The process of the present invention is defined in further detail below. 
   The purchase and sale of a commodity involves the transfer of that commodity between locations, from the seller to the buyer. A description of how such transfers occur for crude oil is helpful as background information for the present invention. Referring to  FIG. 2 , there is shown a distribution system  42  for transferring crude oil from producing wells  44 ,  46  and  48  through pipelines or other local transportation means to a transfer station  50 . The station  50  is termed an LACT (Lease Automated Custody Transfer) facility which receives the oil produced by wells in the immediate vicinity. In the distribution system  42  shown in  FIG. 2 , there is shown a group of “stations.” Each station is a transfer point that  10  is defined by a physical location, such as a city and state, the grade of product that it handles, and an identification of the owner of the transfer mechanism, such as a pipeline company. In  FIG. 2  the station  50  is located at Hendrick, Tex. It handles WTI (West Texas Intermediate) crude oil which is transmitted through an Equilon pipeline (P/L). 
   Further referring to  FIG. 2 , the product collected at station  50  is transmitted through a pipeline  52  to a station  54 . Station  54  is defined as Wink, Tex., handling WTI product by ARCO Pipeline. The transfer from station  54  is made through a pipeline  56  to a station  58 . The station  58  is defined as Midland, Tex., WTI with the ARCO Pipeline Company. From Station  58 , the crude oil is transferred through a pipeline  60  to a station  62 . Station  62  is at Cushing, Okla., handling WTI by ARCO Pipeline. 
   From station  62 , the product is transmitted through a pipeline  64  to a station  66  which comprises a refinery. The parameters of the station  66  are the location which is Ponca City, Okla., the product being WTI and the using entity defined as “refinery.”  FIG. 2  shows collection and transfer of the product which will be the subject of the transaction from the wells  44 ,  46  and  48 , which are owned or leased by the seller, through a series of stations and ultimately to the refinery at station  66  for use by the buyer. Crude oil is transported as a fusible commodity product. The product received at the refinery may not be the same physical product pumped from the wells, but it has the parameters for the agreed transaction. 
   The present invention is further described in reference to the block diagram  80  shown in  FIG. 3  which represents a time sequence of operations that begin at the top of the page and continue generally toward the bottom of the page. The parties involved in a transaction are defined to be party A, which is the seller, and party B, which is the buyer. The computer system is installed at the application service provider  34  (see FIG.  1 ). The carrier is one or more of the pipeline companies, such as shown in FIG.  2 . 
   The present invention is designed to be utilized by a large number of parties, both buyers and sellers, but only one transaction is described in detail in reference to diagram  80  in FIG.  3 . Each of the parties that wishes to participate in the transaction system must previously register with the application service provider  34  or a recognized authority. As a part of this registration, each party agrees to be bound by contract provisions that it approves and to accept a standard contract  82 , which it provided by the service provider  34 . There is further pre-established certain reference information  84 , which is posted by the service provider  34  and made available to all parties. Certain information taken from the reference information  84  is utilized at various stages in the transaction. 
   The reference information includes the following data: 
   1. Tariff—This is the price charged to convey crude oil between the various locations, such as shown in FIG.  2 . This tariff is posted by each of the pipeline companies. The parties can determine transportation charges for their transaction based on this tariff. 
   2. Pricing—This is a posting of prices supplied by the parties, commercial services and markets. The parties to a transaction can specify either a fixed price or reference to pricing provided in the reference information. Examples include the Platts and Nymex indices. 
   3. B.A. Contact—This is business associate (B.A.) contact information which includes the name, address, and other contact information pertaining to each of the parties as well as specific contact information for individuals (traders and schedulers) who are conducting transactions for the named corporate parties. 
   4. Reference Data—the reference data includes place names, such as physical locations, commodity names with grades such as WTI, and a listing of all of the stations. 
   5. Stations—This is a listing of each of the stations and the specific information defined for each station, such as shown in FIG.  2 . For example, station  62  is defined as being located at Cushing, Okla., handling product grade WTI, and with transmission controlled by ARGO Pipeline. 
   Returning to  FIG. 3 , parties A and B, which can be parties  24  and  26  as shown in  FIG. 1 , reach agreement on a set of terms for a transaction. This discussion could be through a communication channel that utilizes the Internet  22  or could be through direct telephone or fax communication. Contract terms  86  and  88  of the parties are input to a transaction contract  90 . The preferred techniques for entering the terms are for one party to perform the actual entry after both parties have agreed upon the terms or from an Internet trading platform. The transaction contract  90  is an instance of the standard contract  82  which has been populated with the contract terms provided by the parties. A further approach to creating the transaction contract  90  is to import a set of agreed upon terms from a trading system, such as Houstonstreet.com where the parties have concluded the terms for an on-line transaction. Note that the system used by the service provider  34  is shown to have a large number of the transaction contracts  90  between other parties who subscribe to the transaction contract service. 
   
     
       
             
             
             
           
         
             
                 
                 
             
           
           
             
                 
               Product: 
               WTI 
             
             
                 
               Quantity: 
               30,000 barrels 
             
             
                 
               Gravity: 
               deemed 40 degrees 
             
             
                 
               Delivery: 
               November, 2000 
             
             
                 
               Pricing: 
               Party B posted price average for month of 
             
             
                 
                 
               November, 2000 
             
             
                 
               Settlement Date: 
               Dec. 20, 2000 
             
             
                 
                 
             
           
        
       
     
   
   After the terms have been entered into the transaction contract  90  by the parties, a copy of the terms and contract is provided to each of the parties for reviews  92  and  94 . The present invention utilizes a single contract document so that no confusion or misunderstanding can arise by each party maintaining its own copy of the contract and making modifications and changes during the discussion of the terms and other aspects of the transaction. The review can be done through the communication provided by the Internet  22 . After party A has conducted review  92  and determined that all of the terms and the other aspects of the standard contract embodied in the transaction contract  90  are as desired, the party A can then “click” for an approval  96 , which can be a box on a display screen. Likewise the party B studies the review  94  and if everything is acceptable, also “clicks” an approval  98 . The approvals  96  and  98  are transmitted back to the application service provider  34  to establish approval of the particular transaction contract  90  by both of the parties A and B. This method of review and approval can be done very quickly so that the parties can enter into and commit to transactions without a lengthy paperwork process. 
   The transaction contract  90  is assigned a unique serial number to identify it within all of the contracts handled by the system. 
   The next step in the transaction procedure is to provide information for a schedule  100 . The information used to produce the schedule  100  is derived from the transaction contract  90 , the reference information  84 , as well as schedule data inputs  110  and  112  from the parties. Discussions between the schedulers for the buyer and the seller can raise many issues pertaining to the schedule for delivery. 
   The seller may have particular problems in production and may not have product available until a later date, the buyer may need the product for consumption at a different date than originally considered. Outside factors such as the availability of carrier resources could come into play as well. The schedule data is preferably input by one of the parties, although it could be input by both parties, and becomes a part of the schedule  100 . After all of the schedule information has been supplied, party A is provided with a review  114 , party B with a review  116  of the completed schedule  100 . The schedule  100  is a database for all of the transactions within the computer system of ASP  34 . However, each party has access only to the information that pertains to that party. 
   The schedule  100  comprises a data base listing of each transfer activity for each of the stations used by the parties in the system for ASP  34 . An example of the data within schedule  100  for the transaction contract  90  is as follows: 
                                                                                                         Station: 54                Transport Asset:   ARCO P/L           Contract #:   30246           Company:   Coastal           Contract Type:   B/S           Grade:   WTI           Volume:   30,000 bbls.           Source P/L:   Equilon P/L           Destination P/L:   ARCO P/L           Delivery Date:   Nov., 2000            Station: 54                Transport Asset:   ARCO P/L           Contract #:   30252           Company:   Coastal           Contract Type:   B/S           Grade:   WTI           Volume:   25,000 bbls.           Source P/L:   Equilon P/L           Destination P/L:   ARCO P/L           Delivery Date:   Dec., 2000            Station: 58                Transport Asset:   ARCO P/L           Contract #:   42,856           Company:   Gulfmark           Contract Type:   O/P           Grade:   LCDS           Volume:   10,000 bbls           Source P/L:   ARCO P/L           Destination P/L:   ARCO P/L           Delivery Date:   Nov., 2000            Station: 62                Transport Asset:   ARCO P/L           Contract #:   45,841           Company:   Equiva           Contract Type:   T           Grade:   WTS           Volume:   1,500 bbls           Source P/L:   ARCO P/L           Destination P/L:   Conoco P/L           Delivery Date:   Nov., 2000                        
The station information for the schedule  100  data base describes a transfer of custody of the product. The listing of “Company” is the seller of the product and is therefore the source of the product. The seller company must specify the source pipeline as set forth in the listing. Note that there may be multiple listings for a particular station for different contracts. Or, a single contract may have multiple listings for different deliveries over time. The contract type noted above for station  54  is B/S, which stands for Buy/Sell. This is a one-time purchase and sale agreement. The term “E” refers to an Evergreen” contract which is a recurring monthly transaction that continues until otherwise terminated. A “T”(or Term) contract is one in which deliveries are made over a specified term. The term “O/P” refers to an “outright purchase” which means a volume is bought from a counter party with no corresponding, offsetting sale (as in B/S). This is also O/S for “outright sale,” and O/S for party A is an O/P for party B.
 
   Note that certain portions of the schedule information are derived from the reference information  84 . Other information is derived from terms that were agreed to in the transaction contract  90 . Note also that a very large number of entries for the schedule  100  will be produced between the parties who are registered to utilize the ASP  34  system. After being provided with the reviews  114  and  116  of the current schedule  100  for the transaction contract  90 , the parties A and B are presented with approvals  118  and  120 . If party A approves the schedule  100  information, he clicks the approval  118 , which is an acknowledgment of his agreement with the schedule  100  information he received. Party B likewise clicks the approval  120  to acknowledge his agreement with the schedule  100  information. 
   After the schedule  100  information for transportation contract  90  has been approved by both of the parties, it is sent to each required carrier, a pipeline company, as a product delivery schedule  122 . 
   An example of the product delivery schedule  122  which is sent to one of the pipeline companies is as follows: 
   
     
       
             
             
             
           
         
             
                 
                 
             
             
                 
               Colonial Pipeline 
               (Nov., 2000) 
             
             
                 
                 
             
           
           
             
                 
               Transaction #: 
               32,455 
             
             
                 
               Source: 
               Conoco P/L 
             
             
                 
               Recipient: 
               Colonial P/L 
             
             
                 
               Volume: 
               14,000 bbls. 
             
             
                 
               Grade: 
               WTI 
             
             
                 
               Transaction #: 
               42,551 
             
             
                 
               Source: 
               Colonial P/L 
             
             
                 
               Recipient: 
               Conoco P/L 
             
             
                 
               Volume: 
               30,000 bbls. 
             
             
                 
               Grade: 
               WTI 
             
             
                 
               Transaction #: 
               43,451 
             
             
                 
               Source: 
               Colonial P/L 
             
             
                 
               Recipient: 
               Exxon P/L 
             
             
                 
               Volume: 
               35,000 bbls. 
             
             
                 
               Grade: 
               WTI 
             
             
                 
                 
             
           
        
       
     
   
   After receipt of the product delivery schedule  122 , each carrier provides the service of delivering the product set forth in block  130  and specified in the product delivery schedule  122 . Upon completion of the delivery, the carrier asset prepares a product delivery report  132 . An example of such a report (referred to as “pipeline ticket”) for the transaction contract  90  is shown as follows: 
   
     
       
             
             
             
           
         
             
                 
                 
             
             
                 
               Colonial Pipeline 
               (Nov., 2000) 
             
             
                 
                 
             
           
           
             
                 
               Transaction #: 
               43,451 
             
             
                 
               Source: 
               Conoco P/L 
             
             
                 
               Recipient: 
               Texaco P/L 
             
             
                 
               Volume: 
               34,880 bbls. 
             
             
                 
               Grade: 
               WTI 
             
             
                 
               Gravity: 
               34° 
             
             
                 
                 
             
           
        
       
     
   
   The above type of report is made for each transaction. 
   The product delivery report, which is also referred to as the “actuals” can also be delivered to the parties A and B. 
   Upon completion of the delivery, the computer system for ASP  34  produces invoicing data  134  for each transaction contract  90 . The sources of information which produces the invoicing data includes the schedule  100  and selected data from the reference information  84  as well as the product delivery report  132 . For the present example the invoicing data  134  can be as follows: . 
   
     
       
             
             
             
           
         
             
                 
                 
             
           
           
             
                 
               Contract #: 
               35,451 
             
             
                 
               Buyer: 
               Conoco 
             
             
                 
               Seller: 
               Plains Marketing 
             
             
                 
               Delivery Date: 
               Nov., 2000 
             
             
                 
               Volume: 
               34,880 bbls 
             
             
                 
               Grade: 
               WTI 
             
             
                 
               Gravity: 
               340 
             
             
                 
               Calculated Sale Price: 
               $1,153,421.50 
             
             
                 
                 
             
           
        
       
     
   
   After the invoicing data  134  has been produced, it is transmitted to the parties A and B for respective reviews  136  and  138 . Just as described above, there is a corresponding approval  140  for party A and an approval  142  for party B. After each party has made a review of the invoicing data, they can click on a predetermined field to confirm their approval of the invoicing data. Upon receiving the approval, the computer system for ASP  34  then transfers the finalized invoicing data to the parties A and B. 
   After both parties A and B have submitted the approval of the invoicing data, the ASP  34  computer system provides receivable data  148  to party A (the seller) and payable data  140  to the party B (the buyer). This information makes possible the preparation of an invoice by party A and the preparation to pay the invoice by party B. After the invoicing has been completed, there is a process of settlement  152 . Settlement can be accomplished in any one of multiple ways. The preferred approach is to send a net receivable/payable  154  to party A and a net receivable/payable  156  to party B. The documentation for items  154  and  156  is based not only on the transaction contract  90 , but includes all other outstanding transactions which involve parties A and B. These are for a net of all of the transactions in which these parties are involved. This may comprise a payment by A to B and to other parties, and in certain cases, A could be receiving payments from other parties. This likewise applies to B, so that the total settlement transactions between all the parties to the system is substantially reduced. Examples of receivable/payable data for the parties is as follows: 
   
     
       
             
             
             
           
         
             
                 
                 
             
           
           
             
                 
               Party A 
                 
             
             
                 
               Receivable Party B - 
               $ 1,250,431.55 
             
             
                 
               Payable Party C - 
               [$ 35,000.45] 
             
             
                 
               Payable Party D - 
               [$ 355,222.49] 
             
             
                 
               Receivable Party G - 
               $ 1,435,221.65 
             
             
                 
               Receivable Party K - 
               $ 132,621.55 
             
             
                 
               Receivable Party R - 
               $ 695,421.31 
             
             
                 
               Party B 
             
             
                 
               Payable Party A - 
               [$ 1,250,431.55] 
             
             
                 
               Payable Party G- 
               [$ 351,429.35] 
             
             
                 
               Payable Party M - 
               [$ 2,365,231.50] 
             
             
                 
               Receivable Party T - 
               $ 431,651.75 
             
             
                 
                 
             
           
        
       
     
   
   A still further aspect of the present invention is shown in  FIG. 4  as block diagram  166 . This is in reference to the same parties and computer system within the application service provider  34  as described in reference to FIG.  3 . Each of the parties, such as A and B, is provided with a storage for confidential information pertaining to each principal aspect of the procedure described in reference to FIG.  3 . Access to the information within the ASP  34  system is at three levels. The reference information  84  is available to all parties who subscribe to the system. The terms of a specific transaction contract, such as  90 , are available only to the participating parties A and B. Private information, as further described in reference to  FIG. 4 , is limited to only the particular party which is associated with the information. For the transaction contract  90 , party A has information  168  which is communicated to the computer system for storage as Party A Proprietary Information  170 , in conjunction with the transaction contract  90 . In a similar manner party B information  172  is submitted to the computer system for storage as Party B Proprietary Information  174 . 
   Party A can search and review the proprietary information  170 .as well as information in the transaction contract  90  through a search and review information process  176 . In a similar manner, party B can access its proprietary information, as well as information to which it has access within the computer system, through its search and review information  178 . 
   An example of proprietary information that a party may store is an identification of a particular use to be made of a product in a specific transaction. At a later time, the party can then search and locate all of the transactions which have that designated use. Another application is that a party can evaluate the profitability, both projected and final, for a particular transaction and at a later date access and review the profitability information to determine the relative profitability for all of the transactions in which the party is engaged, and that can identify the particular transactions which were the most profitable which can in turn be used as a guide for future transactions. 
   Continuing reference to  FIG. 4 , there is provided for the schedule  100  the ability of party A to store Party A data  178  within a specified file for Party A Inventory/Runs  180 . This particular data can be used by a party to define the inventory associated with particular stations and the runs associated with usage at certain stations, such as a refinery. This information can be utilized by a party to determine future usage and therefore requirements for a product. The producing party can also utilize this information to evaluate its history and ability to deliver product in the future. Party B  182  Inventory/Runs is input to a Party B Inventory/Runs  184  for the purposes described above. Party A can use review data step  186 , and likewise party B can use review data step  188  to search and evaluate the information within the proprietary data stored for the inventory/runs for that party. 
   A still further aspect of proprietary information is the inclusion of internal rules for a particular party related to the transaction process. Associated with the invoicing data  134  are Party A Internal Rules  198  which, under certain circumstances, generate a corresponding report  200 . Party B has internal rules  202  which can generate a report  204 . These can be internal accounting rules such as to limit how much an accountant can write off when actual numbers are different from planned numbers, trading rules which limit the amount or type of trades being conducted, and therefore create a report when such a rule is violated, and limitations on which employees are permitted to be involved in transactions. These reports can be provided directly to management of party A or party B so that appropriate actions can be taken when the internal rules are invoked. 
   Each of the instances of proprietary information above is maintained such that it is only available to the party that creates and uses the information. 
   The transaction processing system of the present invention is further described in reference to a flow diagram  220  shown in  FIGS. 5A and 5B . Reference will also be made to the corresponding aspects shown in FIG.  3 . Following the start, at a first block  222 , the ASP  34  computer system receives a request to open a new instance of the standard contract  82 . This is for production of the transaction contract  90 . Continuing to a block  224 , party input data  226 , such as terms  86  and  88  (FIG.  3 ), is received from the parties together with reference information  84  to populate the instance for transaction contract  90 . At block  228  the transaction contract  90  is transmitted to both of the parties. At question block  230  a determination is made as to whether both parties have approved the transaction contract. This can be done as a default time or a non-approval response. If the answer is no, a transfer is made to a block  232  in which a report of the non-approval is sent to both of the parties. Following this step, return is made to block  224  to receive new input data from the parties. Typically, when this occurs the parties will have an off-line discussion to resolve differences that have arisen, or simply resolve any inadvertent problems that have been noted. 
   If the answer to question block  230  is yes, entry is made to block  234  to update the schedule  100  stored in the system based on the terms of contract  90 , the party data and the reference information  84 . The parties provide input data  236  to further develop the schedule. This can be modification or providing additional information. Following block  234 , entry is made to block  238  in which the schedule is sent to both of the parties for all of the information that is relevant to those parties for transaction contract  90 . At this point an inquiry is made in question block  240  to ascertain if both parties approve of the schedule  100  information that has been entered. If the response is negative, entry is made to a block  242  in which a report of the non-approval is provided to both of the parties. Control is then transferred back to block  234  in which the parties again provide input data  236  for resolving the discrepancies which caused at least one of the parties not to approve the schedule. If both parties do approve the schedule, entry is made to block  244  ( FIG. 5B ) to generate a product delivery schedule which will be provided to each of the relevant pipeline companies. 
   Continuing to block  254 , the ASP  34  computer system prepares a product delivery schedule for each pipeline asset (pipeline company) and provides the product delivery schedule to the pipeline asset. The product delivery schedule lists the pipeline transfer activities that are performed for all of the parties who participate in the ASP  34  computer network system and is defined based on the stations that are managed by the particular pipeline asset. 
   After the products specified in the schedule have been delivered by the pipeline asset, a product delivery report  260  is prepared by the pipeline asset and submitted to the application software provider  34  computer system. In block  258  the computer system generates invoice data based on the schedule data, the reference information and the product delivery report which specifies the actual deliveries that were made in terms of quantity, grade, gravity and time of delivery. 
   In block  262  the invoice data is transmitted to both of the parties for the transaction relating to contract  90 . The parties then have the opportunity to review this data and determine if it is accurate and represents the intentions of the contract. 
   At a question block  264 , a determination is made if both parties approve the invoice data that they have received. If there is no approval, entry is made to block  266  and a report of such non-approval is sent to both parties, thereby raising a warning flag that there is a disagreement about the invoicing of the contract. At block  268 , the parties can negotiate the invoice data to either change the information or to clarify the information that has been presented. The results of the negotiation in block  268  are then input to the block  258  for either modifying the invoice data or accepting the invoice data as it has previously been produced. 
   If the response at question block  264  is yes, that is both parties have approved the invoice, a resulting final invoice/payable data is sent to each of the parties in block  280 . This is the particular information for the contract  90 . At block  282 , the computer system generates a net invoice/payable data for each of the parties and sends this information. It is likely that within the computer system operated by the ASP  34 , each party will have multiple contracts that have been executed during the last billing time period. Rather than making payments for each individual transaction, there is produced a net invoice or payable for each of the parties so that each party need only close out a single invoice or payable with each other party within the network. By having the total invoice/payable data, each party is able to clear its accounting for each of the individual transactions. 
   After the net invoice/payable data has been transmitted, the parties can settle with the final payments through conventional means such as electronic transfer, or if preferred, the printing and mailing of a paper check. 
   A still further aspect of the present invention pertains to the provision of lines of credit to the participants in the transactions. Many sellers are not willing to commit to a transaction with a buyer unless that buyer has a line of credit for at least the amount of transaction to guarantee payment from the buyer. In the purchase and sale of crude oil, it is traditional that payment is not made until after the product is delivered to the buyer. Thus, if a buyer does not have a line of credit and is unable to make payment for the product, the seller will not be paid for the product that it has already provided. This situation inhibits sellers from entering into transactions and reduces the viability of the marketplace. 
   A buyer can obtain a letter of credit for a particular transaction and the amount of the transaction must be no more than the amount of credit available. However, buyers frequently engage in a large number of transactions. When a buyer has made payment for a particular transaction, his credit is then available for other transactions. However, it is very difficult and time consuming for the buyer to keep track of each transaction and to notify its bank when a particular transaction has been paid. It is also possible that a buyer could over utilize its line of credit and make multiple purchases with the representation that the same line of credit is available to secure all of these purchases. In such a situation, one or more sellers could end up without payment for their products. 
   A financial institution provides credit lines to buyers by use of the transaction system maintained by the ASP  34 . The financial institution is provided with open access to the transaction contracts  90 , the schedule  100 , the invoicing data  134  as well as the settlement  152  data. The financial institution, which is preferably a bank, can extend a given line of credit to a particular party and that party can utilize the line of credit for multiple transactions and can roll the credit forward when earlier transactions are paid. The financial institution can monitor all of the activities of the party to whom it has extended the line of credit. By monitoring the activities, the financial institution can be assured that the buyer has not made purchases on credit that extend beyond the amount of the line of credit. In this situation, sellers can be assured that they will be paid for the sales thereby encouraging sellers to participate in the market. The financial institution can charge a fixed fee or a per unit of product fee which functions essentially as insurance to guarantee payment to the sellers. 
   An example of such a line of credit is as follows. Bank XYZ extends a letter of credit to party B, the buyer, in an amount of 10 million dollars. The sellers who participate in the computer network supported by the ASP  34  are made aware that the party B is supported by a line of credit from Bank XYZ. Party B enters into a transaction for the purchase of 2 million dollars worth of product from Party A. 
   Party B then enters into contracts of purchase with Party C for 3 million dollars, Party D for 3 million dollars and Party E for 1.5 million dollars. The financial institution XYZ is aware of each of these transactions by having access to the transaction contract and invoicing data. Should these amounts go beyond the line of credit, the financial institution can notify the buyer and direct that he make no further purchases until the outstanding balances are paid and he is back down within the allowable credit limit. The buyer can be advised of his running total, which in the present example is 9.5 million dollars. This leaves a credit line of 0.5 million dollars. Should Party B make the payment to Party C for 3.0 million dollars, then the Party D will then have an outstanding line of credit of 3.5 million dollars. All of the financial transactions are monitored by the financial institution by virtue of its access to the data within the computer network of the ASP  34 . 
   The financial institution monitors the settlement  152  data to determine when a transaction has been paid. Thus, the financial institution can monitor the amount of commitment that the buyer Party B has made for all of its transactions. The sellers to Party B can be assured that payment will be made because the financial institution has assured payment to all sellers and the financial institution is responsible for monitoring the activities of its buyer. 
   Although several embodiments of the invention have been illustrated in the accompanying drawings and described in the foregoing Detailed Description, it will be understood that the invention is not limited to the embodiments disclosed, but is capable of numerous rearrangements, modifications and substitutions without departing from the scope of the invention.

Technology Classification (CPC): 6