Understanding the basics of accounting for NDIS service providers
If you are a service provider in the National Disability Insurance Scheme (NDIS), understanding accounting basics is essential to successfully run your business. With so many rules, regulations, and jargon to navigate, it is no surprise that many NDIS providers find accounting overwhelming.
Fortunately, this blog will break down the essential concepts of accounting for NDIS providers and provide practical tips on how to streamline your financial operations. Whether you are new to the NDIS scheme or trying to brush up on your bookkeeping skills, we’ve got you covered! So, let’s get started
Introduction to NDIS
The National Disability Insurance Scheme (NDIS) is the Australian Government’s insurance program for people with a disability. It provides financial support to eligible Australians so they can access the services and support they need to live an ordinary life.
Importance of accounting for NDIS service providers
As an NDIS service provider, it is essential to have a clear understanding of accounting and its basic principles. This will ensure that you are able to accurately record and track your finances in line with NDIS accounting requirements, and ensuring adherence to the SCHADS award scheme when it comes to paying your staff.
Accounting involves the process of recording, classifying and summarising financial transactions to provide information that is useful in making business decisions. This includes decisions about resource allocation, investment and financing. If you are an NDIS service provider, a good accounting system will give you visibility over your entire operations, from income and expenditure to profit and loss. Such information will help you in making informed strategic decisions about the future of your business.
Accounting for NDIS service providers must be in accordance with both Australian generally accepted accounting principles (GAAP) and NDIS reporting requirements. GAAP is a set of rules and guidelines that govern the overall world of accounting and is adopted by most Australian businesses as well. They are designed to ensure that financial statements give a true and fair view of an organisation’s financial position, performance and cash flows. On the other hand, the NDIS Provider Registration Guidelines require providers to maintain accurate records of their finances, including income and expenditure. Providers must also prepare annual financial statements that comply with Australian Accounting Standards (AAS).
What types of expenses can a NDIS service provider claim?
There are a few different types of expenses that an NDIS service provider can claim. Such expenses include:
Cost of providing the service – It includes the cost of staff, materials, equipment and any other costs associated with providing the service.
Travel costs – These include any travel costs incurred in order to provide the service, such as petrol or public transport costs.
Marketing and advertising costs – Such costs are associated with promoting and marketing your business and services to potential clients.
Administration costs – These are the costs associated with running your business, such as accounting, insurance and stationery costs.
Important considerations for NDIS providers when tracking financials
There are a few key things that NDIS providers need to keep in mind when tracking their financials for an accurate accounting process. Here are some important considerations:
Understand your payment terms: Your payment terms will determine how and when you get paid by the NDIS. Make sure you understand your terms so that you can properly track your finances.
Know your cost of goods sold (COGS): Your COGS includes all the costs associated with providing your services. Knowing your COGS will help you track your profitability and make sound business decisions.
Stay up to date on GST changes: GST is a constantly changing rule, so it is important to stay up to date on any changes that may impact your business. This way, you can make sure that you are correctly charging GST on your invoices and correctly reporting it on your tax return.
Keep accurate records: Inaccurate financial records can lead to costly mistakes down the road. Make sure you are keeping accurate records of all income and expenses so that you can make informed decisions about your business.
Common accounting mistakes made by NDIS providers
One of the most common accounting mistakes made by NDIS providers is failing to keep accurate and up-to-date records. This can lead to problems when it comes time to invoice clients or reconcile accounts.
Another mistake is failing to track expenses properly. This can lead to overspending and putting the business at financial risk.
Many NDIS service providers also fail to budget properly. This can lead to cash flow problems and difficulty meeting financial obligations.
Finally, many NDIS providers make the mistake of neglecting their invoicing and collection procedures. This can result in missed payments and slow growth for the business.
Conclusion
Accounting is an essential part of running a successful NDIS service provider business, and the tips in this blog should provide you with the basics to get your accounting processes up and running.
Remember, consistency and accuracy are key when it comes to understanding and managing your accounts, as well as staying compliant with all relevant NDIS regulations. Having a good grip on accounting will help you maintain order so you can concentrate on delivering exceptional services to your customers.
