Monthly Archives: December 2016

Business Blog 41 – 2016 Wrap Up!

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This is my final blog for the year, and what a year it has been in what is our first full year of operation! I trust it has been a great year for you in and out of business too!

Highlight

From my perspective, the business highlight for us for the year was the successful delivery of an Activity Based Costing (ABC) project for an ASX listed entity. This multi-site project identified profitability by product, customer and segment and provided insight into their business not seen before. The ability to make informed strategic and pricing decisions was the key outcome for that entity.

Reflection on 2016 blogs

It is interesting to look at the ‘read’ rates for the blogs for the year. The blog with the lowest ‘read’ rate was Blog 23 ‘The Cloud’. This is a real surprise to me as moving IT systems to the cloud is one of the biggest improvement opportunities around and I thought there would have been more engagement in the topic? Maybe folks are over the ‘cloud’ or have already addressed this in their businesses?

In terms of the most popular weekly blog, Blog 32 covering Q1 Profit and Loss Actual results was the most ‘read’. This result tells me that performance management and measurement is an important area from readers perspectives, so we will do more of that in 2017.

What is in store for 2017?

For us, we are expanding our business into the disability sector. Having recently been an exhibitor at the Melbourne Convention Centre which hosted over 500 CEO’s from the Disability sector, and also being invited to present a session on ‘Financial Sustainability’ in regional Victoria last week to disability providers, it is clear there is a need for our services in this sector, in particular our Activity Based Costing and Part-Time Virtual CFO offerings.

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Our traditional target market of manufacturing will continue naturally. We will be conducting our second annual survey of manufacturers in early 2017 so please keep an eye out for that.

Festive Season

The upcoming festive season presents a time to not only to spend with family, but also reflect on our businesses. Are we happy with where our businesses are going? Does our strategy need a revisit? What can we do differently in 2017 to improve both ourselves and our businesses as a foundation for a successful life?

I wish you all the best of health and happiness over the festive season and the best of fortune for 2017.

Merry Christmas to you and yours!

Ross  – Billson Advisory

Business Blog 40 – Management Accounting and Financial Accounting

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I know this is not the most inspiring title, but please stay with me as what I have to say is important to the health of your business.

There are two broad streams of accounting in business, financial accounting and management accounting.

The most common and simplest form of accounting is financial accounting. Financial Accounting is your traditional ‘bean-counting’ or ‘scorekeeping’ role aimed at providing information to parties outside the organization such as regulators, ASIC, tax office etc. It tends to be very compliance focussed and is the core business of traditional accounting practices.

Management Accounting however is the more valuable and important form of accounting as it is solely aimed at providing information and helping managers/owners within the organization make informed decisions and run their businesses successfully.

I was reminded of the importance of management accounting at a one-day Institute of Certified Management Accounting (ICMA) conference I attended recently. I was pleased to hear the speakers remind us of the virtues of management accounting and the important role we have in partnering with business GM’s and Owners and business Management Teams in making a successful business.

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In my view, the key purpose of accounting is to provide the information needed on which sound informed business decision making can be based. Meeting the reporting requirements and obligations of the authorities are an important, but in my view, secondary priority to actually building a successful business.

Traditional accounting practices generally focus in on compliance based financial accounting and often don’t have the practical experience and skillset to provide meaningful management accounting services. How do you value Lean initiatives and track the impact of productivity improvement programs? How do you value strategic planning options and develop budgets, forecasts and an internal management reporting systems incorporating KPI’s and ratio analysis? These are the domain of management accountants.

 SUMMARY

Maybe you need to consider the services of a Management Accountant experienced in your industry to provide value-added advisory services, rather than the traditional bookkeeping financial accounting services you may be used to getting?

Ross – Billson Advisory (your outsourced/part-time Management Accountant)