Service Stations - Vivid Partners

NDIS Businesses

At Vivid Partners, we understand the NDIS business landscape in depth. Through our experience dealing with a large number of successful NDIS businesses, we offer tailored solutions that cater to your unique needs. Our NDIS Accounting services are designed specifically to accommodate the distinct requirements of NDIS businesses. Our specialised accounting services tailored to NDIS businesses can make a significant difference in the smooth operation and success of your NDIS business.

NDIS service providers get into business with a goal to help their clients best but don’t consider things from a financial/tax perspective. It is very easy to become overwhelmed with all the reporting and compliance requirements, and you’ll find that as a NDIS provider, you’re spending hours and hours completing basic tasks rather than focusing your energy on something that you love i.e. looking after your clients.

To keep your NDIS business running for accounting/bookkeeping, you will need to:

Have an accounting system in place,
Invoicing clients and collecting payments,
Paying bills on time
Day to day accounting to receive money in the bank and paying suppliers and staff.
Payroll to pay your staff on time, STP lodgements, super payments.
Lodge BAS, Tax Returns
Bookkeeping and record-keeping
Manage Cashflow
Track business performance.
Implement measures to meet KPIs and drive profitability.

The most common question that we get from people enquiring about our services is how they can efficiently manage their obligations listed above while also focusing on providing top-notch services to their clients. This is where us at Vivid Partners, your Specialist NDIS business accountant and business advisors, can help you.

Every NDIS provider can have different service offerings, structures, financial and compliance requirements. As such, their requirements are also different. Some are focussed on optimal tax structure; some are focussed on protecting their personal assets from business risks while some are focussed on growing their business and personal wealth. Whatever your goal is, us at Vivid Partners, your Specialist NDIS business accountant and business advisors, can help you.

The right support can make all the difference to achieve your goals. Why navigate the financial challenges of the NDIS business by yourself when you can have Vivid Partners by your side? Reach out to us today to find out how we can assist you in your journey as NDIS business to achieve your goals.

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Accounting Tips for NDIS businesses

Running a NDIS business can be challenging, especially when trying to provide the best service for your clients, growing your business and managing your accounting & tax compliance. Setting your business the right way and having the right processes is crucial in achieving sustainable growth of your NDIS business. Here are some tips to think about:

Have a Plan & Budget

Failing to plan is planning to fail. At Vivid Partners, we understand how important role budgeting plays to guide your NDIS business to success. We can get involved in your budgeting process to the extent you require – from advice and review right through to full design and preparation. With our years of experience in preparing and monitoring budgets, you can rest assured that this process will yield benefits for years to come.

Monitor Performance

On of the critical aspects of NDIS business is to keeping track of all income and expenses. Monitoring payments received from NDIS participants along with money spent on business expenses can help you manage your business efficiently as well as letting you see well ahead if you are going to encounter profitability or cashflow issues later down the track and you can make decisions based on this data.

Understand your profit margin – Income less cost of providing services

As a NDIS business, it is vital for you to understand if your business is making a profit. Profit is the income you earn from providing services to NDIS participants less the cost of providing such services. Like staff costs, equipment, travel, marketing, administration costs, etc. Being able to run profitably is a must for NDIS business survival.

Manage Cashflow – Receiving payments from NDIS and paying suppliers and staff

As a NDIS business, you need to understand that there will be a timing difference between when you receive payment for the services you provide to your NDIS clients and when you have to pay to your staff and suppliers for providing those services. Hence being on top of cash position of your business is critical for your NDIS business survival. Ensuring you have enough cash to cover the difference in timing is a must.

Keep Proper Records

Keeping proper & accurate records is one of the fundamental aspects of NDIS business and is also required by the law. NDIS businesses have to ensure that you maintain proper records of all transactions, including receipts, invoices, and bank statements. In addition to complying with the law, this documentation will help you to track your expenses & income accurately and enable you to make informed decisions about your business.

The best way to do this is through a cloud-based accounting software like Xero, which Vivid Partners can help you establish.

Use Technology to save time

There are software specifically designed to meet the needs of businesses that provide services to NDIS participants. Using these software can save you time and help ensure that your financial records are accurate and compliant with NDIS regulations. Functions like invoicing, rostering and making sure your staff are paid correctly can be done by the help of such software to save you time and money and ensure you are following the law.

GST recognition correctly

It is important to stay up to date on any GST legislation changes that may impact your business. This way, you can make sure that you are correctly charging GST on your invoices, claiming correct GST on your expenses and correctly reporting it on your BAS.

Most of the services provided to the NDIS participant are GST-free, if certain criteria are met. However, NDIS businesses may provide GST-taxable services so care needs to be taken.

Have Tax Effective Business Structure

One of the key decisions you’ll make when starting a business is its structure. Your choice of structure will depend on the size and type of business and how you want to run it. Choosing the right structure for your business will significantly affect its legal and operational risk, asset protection, tax obligations, legal costs and clients. The structure you use will have a flow-on effect on everything you do as a business, from hiring employees to having the ability to scale up as your business grows.

Setting up your business correctly from the beginning is much easier, less stressful and cheaper. As your business starts growing, it could get very complicated and costly to change your structure. This could cost you valuable business opportunities in the long run, for example if you suddenly find opportunities to scale up but get held up by business structure issues.

What expenses can NDIS businesses claim?

You can claim a tax deduction for most expenses you incur in carrying on your business if they are directly related to earning your assessable income.

There are 3 golden rules for what we accept as a valid business deduction:

The expense must have been for your business, available as an allowable deduction and not for private use.
If the expense is for a mix of business and private use, you can only claim the portion that is used for your business.
You must have records to prove it.

Some of the types of expenses that an NDIS business provider can claim 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.
Training Costs – Seminar, conferences, professional development and training courses

The list above is not exhaustive and should you have any questions around whether specific expenses can be claimed, please contact your trusted advisor at Vivid Partners.

GST Issues for NDIS businesses

A common question that we get at Vivid Partners from NDIS businesses is about GST on income. The services provided to the NDIS participant are GST-free, if all of the following criteria are met:

The NDIS participant has an effective NDIS plan
The service is of reasonable and necessary support that is specified in the participant’s NDIS plan
There is a written agreement between the provider and the NDIS participant
It is a service covered by one of the tables in the NDIS Determination

Although the above services are GST-free, it does not mean NDIS providers don’t need to register for GST. Once your income exceeds $75,000 annually, you need to do GST reporting. Once registered, NDIS providers can also claim GST credits on business-related purchases as part of GST reporting.

It should also be noted that if the NDIS business provides other services outside of the above, the income could be GST-taxable. It is best to discuss with your advisors at Vivid Partners if you have any questions about the GST treatment of income.

What to do when you have a lot of profit?

So, you have now followed all our tips and advice along the way. Your business is doing well, and you have a decent, consistent profit and cashflow at last. What do you do now? Our NDIS business clients often come across this question. Of course, it is a good position to be, and you have plenty of options on what you want to do.

Managing cash can be tricky, not enough and you go out of business and too much there is a lost income earning opportunity. As a guide, the ideal situation is to have access to enough working capital (sum of your cash at bank and trade debtors) to cover 3 months’ operating expenses should you not earn a cent from trading.

You think of the options of taking more salary or a dividend, and you see the tax man wants his share. Even if you leave the profits in the business, the ATO will still want a share of the pie. I see so many clients who react to this situation by wasting funds — either by taking too much out of the business and being taxed heavily or reinvesting it within the business in areas that add no value. How many people upgrade the office and do revised shop fit-outs on their vehicles and IT just because it is tax deductible, when it was not really needed? Of course, there are better ways to manage this situation.

Once you have enough to cover your businesses’ basic needs and those of yours and your family, you should focus on where money can do the best for you in the long run. Here are some of the options:

Improve your lifestyle

Look for strategies that will add the most value to your business and also your lifestyle. Invest in yourself or a family or staff member. Use extra funds to free up time to spend with your family or on your hobbies so you gain a balance between your work and lifestyle. You can outsource your bookkeeping and free up those weekends of filing invoices and receipts to spend at your kids footy or taking your family away for the weekend?

Build wealth by Investing

You have probably worked your guts out to get to where you are now, so don’t waste the profits or focus only on the tax deductions. Rather, concentrate on where you can add the most value to your business and personal life. As with a business, prepare for the future and keep balance in your life, and you can take on any opportunity with confidence.

Having a cash buffer gives you the flexibility to jump on investment opportunities as they arise. Imagine stumbling upon a great deal on new equipment or property. With cash reserves, you can jump on the opportunity without having to borrow or use other funds earmarked for operating expenses.

Pay Down Debts

Paying down debts is another way of investing excess cash in a NDIS business in Australia because it can bring several benefits that can help the business grow and improve its financial health. Paying down debts decreases your interest costs and also frees up cash required to pay back the debts on an ongoing basis. That freed up cash can be used elsewhere.

Diversify your Income

If you’re a NDIS business owner with extra cash lying around, investing it all in one venture can be risky. One way to mitigate risk is by diversifying your income sources into different income generating assets and ventures

By spreading your investment across various income-generating assets or ventures, you reduce your dependence on a single source of income and lower your risk of losing everything in one go. Plus, if one asset or venture isn’t performing well, you can still rely on other sources of income to maintain your financial stability. Some of the options could be to invest in:

shares,
bonds,
managed funds,
or other financial instruments.
real estate or
other physical assets such as gold, art, or collectibles.

Another option is investing in another existing business either by buying shares or providing a loan. Not only do you get an additional source of income, but you’ll also be supporting the growth of another small business.

Invest Back Into Your Business

If you’re running a small business, you know how tough the competition can be in Australia. To stay ahead of the game, one option you might consider is using any extra funds you have for capital expenditures like the ones below because it can help you make even more money down the line, if the right purchases are made:

equipment,
property,
or technology upgrades.

By upgrading your equipment or technology, for example, you might be able to increase your efficiency and productivity, which could translate to more sales and profits; and in the competitive landscape of small business, every little bit helps.

The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Vivid Partners. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your advisor at Vivid Partners.

Our Industry Experiences

Through decades of experience, broad professional network, a wide range of technical knowledge and our mix of quality tax and accounting services at a reasonable cost, we focus on providing our clients peace of mind that their tax and accounting compliance are in proper order and they are paying only the amount of tax that they absolutely need to and at the same time, also support them to grow and prosper with our business advisory services. The team of professionals at Vivid Partners have been providing specialised and tailored services to different industries.