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Last week I attended the annual MYOB Partner Incite Conference (yes I am a partner with MYOB)!
Over 1,000 of us filed into the Melbourne Convention Centre to be greeted by a jazz band and seating that ranged in style from beanbags to bench seats to a variety of coloured hard chairs. Quite funky!
The CEO of Lonely Planet Gus Balbontin (who was once homeless scavenging food off restaurant tables!) spoke of disruption and we were presented with updates on the evolution of MYOB and it’s soon to be released brand transformation “The Next Big Thing”.
The evolution of technology presents you the business owner/manager with productivity opportunities and scope for fee reductions. It is clear that the three pillars of an Accounting practice is also shifting with technological change.
Transaction processing – with bank feeds and artificial intelligence, data entry is getting more and more automated. Please ensure your bookkeepers and data entry folk are using bank feeds to improve productivity and hence reduce fees you pay for transaction processing services.
Compliance – traditional annual reporting, tax returns and BAS are also being more automated and streamlined thus reducing the time taken to provide such services. You also should be pushing for fee reductions from your external Accountants for these services ensuring that the productivity gains they are getting through technology is being passed onto clients.
Advisory – traditional practices are finding that they need to offer these services to sustain their income streams as the above two pillars shrink. Interestingly MYOB survey indicates that 7 out of 10 unmet needs of business clients is in the area of Advisory services. These include performance monitoring, forecasting and business planning. So ensure your Accountant is capable of offering these services, and if they are not capable of such, or are not meeting your requirements in this area, don’t hesitate to look for help from experts in this field.
MYOB’s ERP system offering MYOB Advanced is Australia’s only integrated cloud ERP and Payroll solution, so if your system needs have moved beyond the MYOB AccountRight or Essentials offering, MYOB Advanced is worth considering. This is particularly true of you manage inventory, either purchased or manufactured.
Software vendors like MYOB are offering standard functionality to improve productivity and reduce the costs of your transaction processing and financial and tax reporting requirements. Ensure you keep on your Accountant/Bookkeeper to pass savings onto you and that they have the skillset and want to provide essential business advisory services.
Ross – Billson Advisory Part-Time Virtual CFO
This entry was posted in Uncategorized and tagged chief financial officer, part time cfo, Virtual CFO on February 18, 2017 by rossadmin.	
It is hard to believe but we are already one-eighth through the 2017 year, and more than 60% through the 2017 financial year!
I drove passed this sign below at the weekend and thought it appropriate for this week’s blog.
Did you make any resolutions back on January 1st? How are they going for you and are they still in play?
Or don’t you believe in making resolutions? Or are they tracking along nicely?
Ticking things off you bucket list? Losing some weight? Getting more exercise? Drinking less? Spending more time with family?
New Year’s Resolutions are a bit of a festive laugh, often with the best of intentions, but like any fad, they tend to come and go quickly.
This leads me onto your business plans.
You might recall we went through your strategic planning process last year? As we are more than half way through the financial year, how are your strategic business plans playing out?
Are they a bit like your New Year’s Resolutions and have gone by the by? Or are they on track and delivering the results you envisaged?
It is clear that when you are accountable for something, you are more likely to focus on it. If you are a business owner or a business leader, one of the simple ways you make yourself ‘accountable’ is to tell someone you respect what you are going to do and commit to giving them a regular update as to your progress. If you are a manager of staff, the best way to ensure staff accountability is to build the plan objective into the employees ‘promises’ and ensure that it’s delivery is measurable and forms part of their annual performance appraisal, and hence pay review.
We all have dreams about our futures, whether that be a personal dream, business dream, dream-job, family dream or money dream. But imagination can only get you so far. At some point, it’s actions that count. It’s the same with resolutions and business plans, actions count.
Dare to dream – but commit to act!
Ross – Billson Advisory – Virtual Part-Time CFO
This entry was posted in Uncategorized and tagged chief financial officer, part time cfo on February 11, 2017 by rossadmin.	
During last week, we got the long awaited final news that Toyota would officially cease production of passenger vehicles at Altona in October later this year. This will be followed by GMH ceasing production a few weeks later. Ford have already ceased production at Broadmeadows late last year and Mitsubishi ceased production in Australia back in 2008.
It will bring to an end Australia’s 90-year history of domestic manufacturing of passenger vehicles.
No doubt, many local component manufacturers will also be hard hit during the fall-out unless they have successfully prepared for the transition away from the automotive industry. As a career manufacturing Accountant and member of SEMMA (South East Melbourne Manufacturers Alliance), it is sad to see!
There are many reasons why this has happened, but I have a few theories around this disappointing situation.
How many of us are driving locally made vehicles? We all had a role to play here, supporting our local manufacturing colleagues rather than buying cheap imports or higher end luxury German cars?
Should the government have been more protective of our automotive manufacturing industry? I don’t necessarily agree with propping up inefficient industries, but surely there was scope for some kind of assistance given the flow-on benefits of having this industry provides. Of course, now we will be paying unemployment benefits to these poor redundant employees when surely that money would have been better spent redirected to some level of support to the industry and keeping these folks employed (paying taxes). And the government has a role to support the local industry by ‘Buying Australian” where reasonable for it’s own car fleets.
There is certainly a clear trend towards the larger SUV vehicle in the automotive market. I have a question to the manufacturers also. Was there no place for the Australian Station Wagon in this market, was there really an effort to market these vehicle as true alternatives to the SUV’s? Or are the local operations beholden (no pun intended) to the parent entities of these large multi-national motor vehicle companies and have no influence over strategic decisions and directions? I am sure this is part of the picture in my view.
Are our high unit cost of labour at the heart of this move? I am sure overseas parent entities note this as part of their global strategic planning. Our minimum wage is amongst the highest in the world.
Will we lose the ability to undertake heavy manufacturing? We will lose the skill base of a modern advanced economy as this occurs.
Interestingly, local innovative off-road vehicle manufacturer Tomcar is growing strongly and has developed Australia’s first electric powered vehicle. Another great story is the reshaping of plastic injection moulding business Perroplas away from reliance on the automotive sector. So it can be done!
Where our manufacturing sector will be in the future in unclear, but it is a sad farewell to the local automotive passenger vehicle manufacturing industry – RIP!
This entry was posted in Uncategorized and tagged automotive manufacturing, manufacturing accountant, part time cfo, Virtual CFO on February 4, 2017 by rossadmin.	
Blog No 43 – The Future of Accounting
Last week we looked at the history of Accounting. This week we look at the future of the profession from my perspective.
The ongoing evolution of technology means the role of the Accountant and Bookkeeper continues to change. The traditional bookkeeper is unfortunately one of those occupations to be replaced by robotic intelligence and Optical Character Recognition (OCR) technology in the future. In other words the data input into your financial ledgers will largely be automated.
The future is also clearly uncertain for traditional compliance focussed Accountants and Tax Accountants of traditional Accounting practices with ongoing automation of these tasks reducing the work required. The ATO is playing their part in simplifying and automating the lodgement process and integrating the data from our computer systems into the Taxation Office systems.
This is seeing the shift of traditional Accounting practice service offerings towards more advisory services, although the lack of experience and the ability of such practitioners to provide such services is brought into question. As an example, the Virtual Part-Time CFO offering that some practices are starting to offer is being offered by personnel in those practices who have not even been a CFO or Accountant from industry. The hands-on experience of industry accountants is far different from the experience of a public practice career tax accountant. So be careful when looking at such advisory services.
The modern accountant in business is a more strategic and value-add focussed professional who uses the base information generated from the ‘books’ as a source of data on which informed management decision making can be based. Partnering with businesses remains key.
A trap modern accounting practices are falling into is the trend of outsourcing and offshoring basic compliance and bookkeeping work to cheaper countries. This traditional training ground for local graduate accountants is being lost meaning there are fewer local graduate opportunities. This sets the scene for a skill shortage in the future for mid-level Accountants and the next generation of business Accountants over the coming 20years in my view.
The future of the Accounting profession continues to be disrupted by technology. In my view, the Accountant of today is a very different professional then the Accountant of the future. Data and analytics will become more and more important and the profession must continue to evolve to stay relevant in the changing landscape.
This entry was posted in Uncategorized and tagged chief financial officer, part time cfo, Virtual CFO on January 30, 2017 by rossadmin.	
Business Blog No 39 – Blockchain
A new emerging technology is receiving quite a bit of publicity of late, that technology is called ‘blockchain’. Discussions on blockchain do appear vague and theoretical at this stage, due to the newness of the concept. It is however touted as a new secure internet based method of exchanging value.
Still in it’s infancy, the best way to describe the technology is as follows.
Blockchain technology is basically a secure decentralised database that is a public register of assets and transactions in blocks of data. These blocks of data are single views of the truth in what can be described as an open ledger. As transactions occur, additional blocks of data are linked together to form the so-called block-chain. Transaction history is thus locked up in the linked blocks of data thereby creating an everlasting record of all the transactions across the blockchain network.
As a bit of background, we have always ‘traded’ and used some middle-man to enforce, facilitate or verify a ‘trade’, such as a bank or a marketplace. Blockchain technology means that traditional ‘middle-men’ are not needed to transact business. So it is likely that the disruption to the banks and the banking system will be the most obvious point of evolution of the technology. Bank to bank international settlements are an obvious opportunity for blockchain technology with one international bank quoted as saying that the technology could save $20billion per year to the world’s banks within 6years. Bitcoin, the digital currency, is an example of the use of blockchain technology, but there remain limited examples of it’s practical application currently.
The cost savings, efficiency improvements, speed, plus security profile are the big pluses of the blockchain technology.
There are many projects out there looking at using ‘blockchain’ including the banks, the ASX, CSIRO, Start-Ups and the Federal Government.
So why are the banks getting involved in this new technology when it will impact them so much, potentially adversely in terms of fee revenue? They clearly want to get on the ‘front-foot’ and be early adopters of blockchain before somebody else comes in and disrupts them. Even now, there are already ‘fintech’ peer-to-peer offerings on the web whereby currency is exchanged without bank involvement, such as CurrencyFair. The banks want to stay one step ahead of any long-term threats and blockchain is their big weapon and also greatest threat in one.
What will become of currency and banks in the future?
What will become of cash in the future?
What will become of paper-based transaction processes?
The internet and technology are rapidly evolving so rapidly and it’s impact on the way we live and transact and do business can only but change along with it.
The likely impact of blockchain is expected to be substantial but its impact remains some years off. So be aware what blockchain technology is, but as sure as the sun will rise, the practical application of the technology will extend far beyond what is envisaged so far.
This entry was posted in Uncategorized and tagged blockchain, chief financial officer, part time cfo, Virtual CFO on November 28, 2016 by rossadmin.	
Business Blog No 35 – Q1 – Forecasts
The first three parts of this four-part series reviewing your first quarter actual results, verses Budget and Prior Year, covered your Profit and Loss, your Balance Sheet and your Cashflow Statement. Now that you have reviewed your actual results for the quarter, you next need to look at your forecasts for the remainder of the full financial year.
Using accounting vernacular, the 3months of actuals plus 9months forecast will give you your 3+9 full-year forecast. When you come to redo your forecasts after Q2, that new forecast will become your 6+6 full year forecast.
Interestingly this is perhaps the most important part of your Q1 review because your historical reports are a reflection on where you have been, whereas the forecast is where you are going based on latest assumptions.
You have already undertaken a budget process for the year, so you don’t want to go through another budget process to come up with your 3+9 forecast. You do however want to use your budget, and the assumptions on which the budget has been built, as a starting point and adjust it for known material changes, updates, variances or changes to your base assumptions. I recommend using your budget spreadsheet models and rename them to ‘forecast’ and adjust the numbers accordingly to come to your 3+9 forecast.
The development of your phased 3+9 forecasts for the full financial year should be co-ordinated by your CFO/Controller and needs to be presented at your management review meeting to ensure buy-in and sign-off by the management team.
As with the budget P&L, sales are the starting point for your full year forecast. You now have the first 3months actual sales so you need to forecast the remaining 9months of the year. Get your Sales Manager to have a look at the budget sales for the 9months to the end of the year and update as required to become your forecast sales. Summing the 9months forecast plus the first 3months actuals will give you your 3+9 P&L Full Year Forecast. The review of sales projections needs to take into account your segment outlooks, forward orders, inflation data, pricing assumptions, economic conditions etc. so that your budget sales figures can be updated to reflect more current circumstances and assumptions and hence become the forecast sales figures.
Based on any revisions to the sales forecast verses the original budget, you will need to make corresponding adjustments to your direct costs (direct labour, overheads and materials if you are a manufacturer). As with sales, you will also need to adjust for other known variations to your budget assumptions to your expenses and overheads. If you need to contain costs to compensate for downward sales revisions, these proactive adjustments need to also be reflected in the forecasts. Similarly, if your business is performing ahead of budget, you might need to consider increases to budget overtime levels, increased manning etc. and reflect these incremental changes in your 3+9 P&L Forecast.
Starting with your budget Balance Sheet, run the forecast updates to the P&L into your Balance Sheet to arrive at a prima-facie 3+9 forecast Balance Sheet. Further, adjust your Balance sheet for any other known or pro-active changes to your Debtors, Creditors, Inventory, Capital Spending assumptions etc. and other Bank/Funding requirements to arrive at your phased 3+9 Balance Sheet forecast.
By updating your P&L and Balance Sheet forecasts, you will have a revised phased 3+9 Cashflow Forecast. This is a key report and will make you aware of your funding requirement changes from Budget to Forecast. You need to make sure the forecast funding outcome is both logical and explainable and passes the ‘sniff-test’ when you step back from the detail.
Use this week to derive your 3+9 full year phased forecasts and understand the variations in your forecasts to your Budget P&L, Balance Sheet and Cashflow Statement. Going forward, you will need to measure your actual results against both your budget and forecast numbers as well as prior year numbers, thus providing a sound foundation for business success.
Now we have completed the four-part Q1 Report suite, we will revert back to our usual newsletter content. If anyone has any issues or questions they would like covered in future editions, please don’t hesitate to contact us.
This entry was posted in Uncategorized and tagged chief financial officer, forecast, part time cfo, Virtual CFO on November 1, 2016 by rossadmin.	