Monthly Archives: November 2016

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.

What is Blockchain?

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.

Ross – Billson Advisory

Business Blog No 38 – ATO Digital Showcase

Last week I attended the ATO Small Business Digital Showcase at the new ATO Offices in Dandenong.

It is clear that the ATO are working hard to engage with small business and help with your tax and superannuation obligations and improve your overall experience with the ATO.


The showcase was split into 6 individual showcase rooms with each group of around 15people being taken around the six separate displays areas one group at a time. Key points from the morning showcase are as follows: –

  • The ATO’s Small Business Newsroom will deliver all the latest tax and super news straight to your email inbox. So, I suggest you sign up for this.
  • ‘Alex’ the ATO’s new online Virtual Assistant, will help answer basic tax and superannuation questions.
  • The free ATO app gives quick access from your mobile devices to key dates and frequently asked questions. A voice authentication option is available with a small business record keeping function under development.
  • Your Sole Trader myGov account can be used to manage and view tax instalments, make payments and lodge statements.
  • Sole Traders can now use voice authentication and cloud authentication to access online services.
  • There is an online tool available to help you determine if your workers are classified as an ‘employee’ or ‘contractor’ (and hence clarify your obligations to them).
  • All businesses with employees are now meant to be on SuperStream with the free online super payment clearing service available to pay contributions in one transaction available.
  • A new simpler BAS product has been launched with a Single Touch Payroll product under development.
  • There is an online checklist for ‘taking on a new employee’ at

Some key ATO phone numbers for your reference follow: –

Business: 13 28 66

Super: 13 10 20

24-hour self-help service: 13 72 26


The ATO are actively trying to reduce red tape for small business. The showcase was a great example of the ATO’s pro-activeness in this area. Jump onto their website at for more information.

Ross – Billson Advisory

Business Blog No 37 – Costing and Profitability


Do you really know what your products and/or services actually cost?

Do you know the profitability of your products and/or services?

Can you confidently say you know where and from which customers you make or lose money?

Where do you focus your business to improve profits?

Have you ever wondered why your profits may be falling even if you are holding your gross margins?

How many companies are honestly satisfied with the data their costing and quoting systems provide?

Do you know that the core information on which your business decisions are based is your costing data? By definition without accurate costing data, your pricing and profitability analysis will also not be accurate, and hence your business strategy and underlying assumptions may be flawed?



You either need to review your existing costing systems, update them and/or undertake an Activity Based Costing (ABC) project!

Once you have accurate costings, you can then identify the profitability of products, services, customers and/or segments. You can price, quote and use the information as a core ingredient to your Strategic Planning process.

Although out of fashion, Activity Based Costing (ABC) remains a key tool for Costing purposes in my view and is as current today as it was when I did my first ABC project 20years ago. In fact, only a few months ago, we completed a successful ABC project for a listed company identifying customer, segment and product profitability across multiple sites.




If there is enough interest, I am thinking of doing a blog series on Activity Based Costing (ABC) as a foundation for business success?

Let me know if you would like such a series. Call on (03) 9847-6834 or email us directly with your views.

Ross – Billson Advisory

Business Blog No 36 – Workplace Flexibility

You may have been hearing quite a bit of reporting on the evolution of the workplace to a more flexible on-demand and freelance style lately? Publicity on this topic has been supported by statistics whereby a recent survey of ASX200 companies identified around half of these top 200 listed companies said around one-fifth, or 20%, of their workforce would be on an ‘on-demand/contract’ arrangement within 3 years (Australian Financial Review).


A recent McKinsey survey also identified that between 20-30% of working age Europeans and Americans do some form of independent work. They range from ‘free-agents’ who work independently by choice; ‘casual earners’ who by choice are looking to supplement their incomes; ‘reluctants’ who would prefer traditional employment but can’t get it; and the ‘financially strapped’ who do extra work as a matter of necessity.

The Business Perspective

Even the increasing percentage of part-time workers in the Australian manufacturing sector is an indication of the evolution of this dynamic workplace in Australia. It demonstrates how businesses can move to make their labour costs more variable and less fixed, thereby making a business such as a manufacturing enterprise more sustainable and competitive.

Full time staff are becoming more seen as ‘generalists’ with ‘specialists’ only being added only if, and when, their specialised skills are required. So a baseline of permanent full-time employees is supplemented by part-time, casual, freelance, on-demand and contract personnel.

This not only lowers the overall cost of labour for such businesses but enables them to tap into the super-specialists rather than relying on training up or making do with internal staff to do specialists tasks, which they may or may not be equipped to do. For the company, it is a win-win!

Extending this scenario a little further, the ‘flexible’ workplace is also seen a major attraction for businesses to become ‘employers-of-choice’. Workplace flexibility is seen as a key for future business success with technology being both a driver as well as an enabler of workforce flexibility. Employees are also seeking more flexibility in their lives (both inside work and outside work) and companies are working in an ever evolving 24/7 marketplaces. So, to offer a flexible work environment is a big positive to many prospective employees thereby enabling a business to be able to select from a wider range of candidates in theory.


The Individuals Perspective

It is just not businesses who are enjoying the benefits of this new flexible, mobile and on-demand workforce, individuals who work in such environments are also enjoying this new ‘portfolio careers’. These individuals may be the super specialists whose skills are in demand and so work with a variety of employers, rather than one single entity. Not only do they earn more by doing this, but they thrive on the variety of freelancing, temporary jobs and casual or part-time employment thereby deriving income from multiple sources. These ‘portfolio careerers’ may even opt for unrelated types of income or may also follow a passion that may not in itself pay enough to make a living. A seasonality factor may also be attractive to some individuals such as tax agents for instance.


So where does this lead us to?

The evolving ‘on-demand’ world we live in is clearly extending into the workplace. It is a winner for both businesses and individuals!

Pardon the pitch, but I can proudly say that Billson Advisory is an example of such a business that enables entities to tap into a part-time/Virtual CFO offering as well as specialist costing skills on a flexible and as-needs basis. Rather than having a full-time CFO on your payroll, use our ‘Virtual CFO’ or specialist Costing services on a weekly or monthly or quarterly basis or ad-hoc basis thus providing a sound foundation for business success.

Ross – Billson Advisory

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.


Profit and Loss (P&L)

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.

Balance Sheet

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.

Cashflow Statement

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.


We have recently moved from our Dandenong South location to be more central to our client’s locations. You will now find us at Ground Floor, 203-205 Blackburn Road, Mount Waverley, VIC, 3149. Our new phone number is (03) 9847-6834. As always, if you need any help or want a no obligation chat, don’t hesitate to contact us.

Ross – Billson Advisory