Next DA

For many organisations – particularly in the NFP and social purpose sector – financial systems are often seen as a back-office function. Necessary, yes. Strategic, not always.

But in 2026, that mindset is costing more than most realise.

Behind the scenes of outdated or poorly integrated financial systems sits a range of hidden costs – from delayed decision-making to staff burnout and audit stress. And as digital transformation accelerates across every industry, organisations that fail to modernise risk being left behind.

Let’s unpack what these hidden costs really look like – and more importantly, how to fix them.

The real cost of “making do”

Many organisations operate with a patchwork of systems that have evolved over time. A bit of Excel here. A legacy accounting platform there. Maybe a CRM that doesn’t quite talk to finance. It works… until it doesn’t.

The problem is, these inefficiencies rarely show up as a single, obvious issue. Instead, they quietly compound across the organisation.

1. Manual processes drain time and energy

 When your finance team is spending hours manually reconciling data, rekeying information, or chasing spreadsheets, that’s not just inefficient – it’s expensive.

Time spent on repetitive admin tasks is time not spent on:

• Strategic planning
• Financial analysis
• Supporting leadership with insights

In a sector where resources are already stretched, this is a significant opportunity cost.

2. Reporting delays slow down decision-making
 If it takes weeks to produce accurate financial reports, your leadership team is always looking in the rear-view mirror.

Delayed reporting leads to:

• Missed opportunities
• Slower responses to funding changes
• Reduced confidence in decision-making

In today’s environment – where funding, compliance, and operating conditions can shift quickly – real-time visibility is no longer a “nice to have”.

3. Audit stress becomes the norm
 We see it every year. Audit season rolls around, and suddenly the entire organisation is in reactive mode.

Poor systems often mean:

• Incomplete or inconsistent data
• Heavy reliance on manual workpapers
• Last-minute scrambling to pull reports together

This doesn’t just increase audit costs – it puts unnecessary pressure on your team and increases the risk of errors.

4. Staff burnout and turnover
 This is the hidden cost that rarely gets discussed enough.

When finance teams are stuck in inefficient systems, they often experience:

• Frustration from repetitive tasks
• Pressure during reporting and audit periods
• Lack of capacity to improve processes

Over time, this leads to disengagement – and ultimately, turnover. Replacing skilled finance staff is far more costly than investing in better systems.

Why this matters more in 2026
Digital transformation is no longer a future concept – it’s happening now.

Across the NFP sector, we’re seeing a clear shift towards:

• Cloud-based financial platforms
• Automated data flows between systems
• Real-time dashboards and reporting
• Increased expectations from boards and funders for transparency and insight

Organisations that continue to rely on outdated systems face a growing gap between what they can deliver and what stakeholders expect.

Put simply: the cost of doing nothing is increasing.

What “good” looks like today
Modern financial systems are not just about efficiency – they enable better decision-making across the organisation.

Here’s what we typically see in organisations that are getting it right:

Connected systems
 Finance, payroll, CRM, and operational systems are integrated, reducing duplication and improving data accuracy.

Automation of routine tasks
 Bank feeds, reconciliations, invoice processing, and reporting workflows are automated wherever possible.

Real-time visibility
 Leadership teams have access to up-to-date financial data through dashboards, not just month-end reports.

Scalable processes
 Systems are designed to grow with the organisation, rather than needing to be rebuilt every few years.

Stronger audit readiness
 Clean, consistent data and clear audit trails make the audit process smoother and less stressful.

How to start fixing it
The idea of “digital transformation” can feel overwhelming – especially for organisations already under pressure. But improving your financial systems doesn’t have to happen all at once.

Here’s a practical way to approach it.

1. Identify your biggest friction points

Start by asking your team:

• Where are we spending the most manual time?
• What processes cause the most frustration?
• Where do errors or delays typically occur?

You don’t need to fix everything – just start with the biggest pain points.

2. Map your current systems
 Understand how your systems currently interact (or don’t).

Often, inefficiencies come from:

• Duplicate data entry
• Lack of integration
• Workarounds that have become “normal”

Clarity here is critical before making any changes.

3. Prioritise automation opportunities
 Look for quick wins:

• Automating bank reconciliations
• Implementing approval workflows
• Connecting systems through integrations

These changes can deliver immediate time savings and reduce risk.

4. Upgrade where it matters most
 Sometimes, the issue isn’t the process – it’s the platform.

If your core accounting system is outdated or limiting your ability to scale, it may be time to consider a move to a more modern, cloud-based solution.

5. Don’t overlook change management
 Technology alone won’t fix the problem.

Ensure your team:

• Understands the new systems
• Is properly trained
• Feels supported through the transition

Adoption is just as important as implementation.

The payoff
Organisations that invest in improving their financial systems don’t just become more efficient – they become more resilient.

We consistently see:

• Faster, more confident decision-making
• Reduced audit stress
• Improved staff satisfaction and retention
• Greater transparency for boards and stakeholders

And perhaps most importantly – finance teams are able to step out of reactive mode and play a more strategic role in the organisation.

Final thought
If your financial systems are “just getting the job done”, it’s worth asking: at what cost?

In 2026, the organisations that thrive will be those that treat finance as a strategic enabler – not just a compliance function.
Because the real value of a strong financial system isn’t just in the numbers.

It’s in the clarity, confidence, and capacity it creates across your entire organisation.

Australia’s Tax Debate Keeps Returning to CGT. But Are We Asking the Wrong Questions?

Every few years the idea of reducing the 50% capital gains tax (CGT) discount returns to the national conversation.

With the May 2026 Federal Budget approaching, it appears the idea is again being discussed — particularly in relation to investment property.

This isn’t the first time.

And it probably won’t be the last.

But focusing purely on the CGT discount risks missing a much bigger issue.

Australia doesn’t just need tweaks to individual taxes. It may need broader tax reform.

Housing affordability is fundamentally a supply problem

Housing affordability is one of the biggest economic challenges facing Australia.

Younger Australians are finding it harder to enter the property market and housing stress continues to rise.

But changing the CGT discount alone is unlikely to fix that.

Australia’s problem is fundamentally a supply problem.

Current estimates suggest the country faces a housing shortfall of roughly 200,000–300,000 homes, and the national housing target requires building around 240,000 homes per year to keep pace with demand.

In reality, we’re building far fewer.

Development approvals can take months — sometimes years — with planning approvals in some jurisdictions averaging 140 days or more, and significantly longer when objections arise.

At the same time, population growth has continued to increase demand.

Without addressing these structural issues, tax changes may simply increase government revenue without improving affordability.

Stamp duty discourages people from moving

One tax that arguably distorts the housing market more than most is stamp duty.

Stamp duty creates a large upfront cost every time someone moves house.

The result?

People often stay in homes that no longer suit their needs because moving becomes financially painful.

This creates inefficiencies across the housing market:

Older Australians stay in large family homes rather than downsizing

Growing families struggle to upgrade

Housing stock is not used efficiently

Encouraging people to right-size their homes could free up supply without building a single new property.

We need more tradespeople building homes

Even when projects are approved, construction capacity can limit how quickly homes are built.

Australia faces ongoing shortages in key construction trades.

Encouraging more young Australians to enter trades through apprenticeship incentives and training support could help address one of the real bottlenecks in housing supply.

Tax policy should encourage productive investment

Tax policy also plays an important role in shaping business investment.

In recent years governments have introduced temporary incentives such as instant asset write-offs or accelerated depreciation.

These measures can be helpful, but businesses benefit most from certainty and consistency.

Permanent incentives encouraging investment in equipment, technology and innovation could have a much stronger impact on productivity than short-term stimulus measures.

Payroll tax quietly discourages employment

Payroll tax is another part of the system worth examining.

For labour-intensive businesses, payroll tax becomes a significant on-cost once the threshold is exceeded.

The rules and thresholds also vary across states, creating additional complexity for national employers.

In practice this can push businesses toward decisions they might not otherwise make:

outsourcing work

offshoring roles

replacing people with technology

Not because it’s strategically better — but because the tax system makes local employment more expensive.

The system can produce uneven outcomes

As an adviser working with businesses every day, I also see examples where the system produces uneven outcomes.

Consider two entrepreneurs earning the same income from a business.

One operates through a discretionary trust and distributes income across a spouse and three adult children.

Another runs the same business as a sole trader with no family members involved.

The first can legitimately reduce the family’s overall tax bill by sharing their income across multiple taxpayers — even if those family members are not actively involved in the business.

The second pays tax at the highest marginal rates.

Both people built the same business and generated the same income.

Yet the tax outcomes can be dramatically different.

Over time, rules designed to manage these structures have become increasingly complex, adding compliance costs and uncertainty.

Tax thresholds quietly erode over time

Another structural issue is that many thresholds in Australia’s tax system do not automatically move with inflation.

Over time this erodes their real value.

This affects:

personal income tax brackets

payroll tax thresholds

grant and concession limits

FBT exemption caps for Public Benevolent Institutions

The FBT exemption cap for PBIs, for example, has not kept pace with inflation since it was introduced, meaning its real value has steadily declined.

The same concept applies to personal tax brackets.

When thresholds are not indexed to CPI, governments collect more tax each year without changing legislation.

Economists call this bracket creep.

But for taxpayers it simply feels like paying more tax every year.

Australia recently recorded one of the largest increases in average income tax rates in the OECD, largely due to bracket creep.

Could the system be simpler?

This is where the conversation becomes more controversial.

But perhaps we should at least ask the question.

What if Australia had a much simpler personal tax system?

For example:

one tax rate for income below the average wage (around $70,000)

another rate for income above that level

A flatter system could reduce complexity and make the tax system easier to understand.

Some parts of the system work well

Not every part of the tax system needs changing.

Australia’s dividend imputation system, including franking credits, prevents company profits from being taxed twice.

Removing it would reintroduce double taxation of company earnings and discourage investment in Australian businesses.

Should GST be part of the conversation?

Australia’s GST rate of 10% is relatively low compared with many developed economies, where VAT rates often sit between 15% and 25%.

Increasing GST while reducing other taxes is politically difficult, but it could shift the system more toward consumption rather than income.

High-income earners, who typically spend more, would still contribute significantly through consumption.

Imagine if businesses spent less time avoiding tax

A complicated tax system has unintended consequences.

Businesses spend significant time and money navigating tax structures, compliance obligations and planning strategies.

Imagine if more of that effort went into:

innovation

investment

productivity

higher dividends for shareholders

In a way, advocating for tax simplification might even challenge my own profession.

But a system that is simpler, clearer and more stable would benefit the broader economy.

We need to think differently

Reducing the CGT discount might generate headlines.

But it won’t solve Australia’s structural economic challenges.

If we want to improve housing affordability, productivity and economic growth, we need to ask bigger questions about the tax system.

Are we taxing work too heavily?

Are we discouraging employment?

Are we encouraging the right types of investment?

And is the system becoming unnecessarily complex?

I’ll be the first to admit that economics wasn’t my strongest subject at university, so some of these ideas may have unintended consequences.

But the conversation matters.

Because tax policy shapes the decisions Australians make every day — whether to invest, hire, build or innovate.

If we want different outcomes, we may need to start thinking differently.

From 1 July 2026, employers will need to pay super on payday, not quarterly.

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The key point

• The rule isn’t “send it within 7 days”
• The requirement is that super must reach the employee’s super fund within 7 business days of payday
• That matters because clearing houses and super funds take time to process payments

Practical takeaway

• To reduce the risk of missing the deadline due to processing delays, most employers will need to pay super on payday (or immediately after payroll is finalised)

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SG hasn’t changed – but the deadline has

• The Super Guarantee rules themselves aren’t being reinvented
• What’s changing is how often and how quickly super must be paid
• Instead of quarterly payments, super becomes a payday / pay-run obligation

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If you don’t comply, it can get expensive fast

If super isn’t received on time, it becomes late super, which can trigger the Super Guarantee Charge (SGC).

SGC is more than “just paying the super late” – it can include:

• the unpaid super amount
• interest (to compensate the employee for late payment)
• administration fees
• ATO penalties (which can be significant depending on behaviour/history)

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Deductibility: where many employers get caught

This is a major trap area.

Late super paid direct to the fund

• If you pay super late directly to the super fund, it is generally still tax deductible
• (Even though it may still breach the payment deadline)

SGC paid to the ATO

• If it becomes an SGC liability, the payment is not tax deductible
• Meaning the cost to the business can be materially higher than the original super payment

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Why the government is introducing this

Payday Super is designed to:

• reduce unpaid and underpaid super
• improve employee outcomes by getting money into funds sooner
• make non-compliance visible earlier (rather than months later)

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What employers should be thinking about now

1) Cashflow

• Super becomes a regular cashflow cost, not a quarterly bill
• That’s a meaningful shift in working capital for many businesses

2) Systems & processes

You’ll need payroll and payment processes that can:

• calculate payroll as normal
• trigger super payments immediately
• avoid delays caused by approvals, batching, or clearing house timing

If you’re using Xero, this should be straightforward as the functionality already exists – if unsure, check with your software provider.

3) Employee super data must be correct before go-live

The biggest risk often isn’t intent – it’s admin errors, such as:

• missing or incorrect fund details
• stapled fund not confirmed
• rejected contributions
• onboarding gaps causing delays

Under Payday Super, these mistakes can create instant non-compliance.

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A smart time for an SG compliance review

This reform is the perfect trigger for a basic Super Guarantee health check, including:

• payroll mapping (what’s included/excluded)
• pay item setup
• payment workflow timing
• employee fund details and onboarding process

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Need help getting ready?

If you’d like a quick review of your payroll + super process ahead of 1 July 2026, reach out — we can help you get it clean, automated and compliant well before the deadline.

In sport, no one waits until the final siren to work out whether the game plan is working. Coaches and players use half-time to stop, get together, check the scoreboard, and regroup before the second half begins.

January plays that same role for businesses and not-for-profit organisations when it comes to finances.

For most organisations, the financial year runs from 1 July to 30 June. By January, December results are in, the Christmas rush has passed, and you are officially halfway through the financial year. That timing matters. It means you are no longer relying on projections or optimism – you are working with real data.

In simple terms, January is half-time.

It’s also worth acknowledging the reality for many Australian organisations. January can feel disjointed. Schools are still on holidays, routines are out of sync, and “normality” often doesn’t return until late January or early February. If January slips by, February isn’t ideal – but it’s absolutely not too late. Half-time still counts as half-time, even if you’re a few minutes late back onto the field.

The scoreboard doesn’t lie

At half-time in a footy match, the first question is obvious – are we in front or behind?

From a financial perspective, January answers that question clearly. Cash flow, profitability, tax position, debt levels, and progress against growth targets are no longer theoretical. You can see what is actually happening, not what you hoped might happen.

If revenue is tracking ahead of plan, that’s good news – but it still raises important questions. Are you genuinely in control, or riding a short-term spike? Is the organisation positioned to push for a strong finish, or is this a season where consolidation and resilience matter more? Should surplus cash be reinvested, used to reduce debt, or held as a buffer?

If performance is behind expectations, January offers something invaluable – time. Being behind at half-time is not a verdict. It’s information. With six months left in the financial year, there is still room to influence the outcome. Whether the goal is a comeback or a sensible rebuild, there are usually options available.

Pricing can be reviewed. Costs can be tightened. Cash flow timing can be improved. Strategy can be refined. Waiting until June to ask these questions is like reviewing game footage after the season has finished – useful for learning, but too late to change the result.

Halfway is where smart adjustments happen

Every sport accepts one basic truth – the original plan rarely survives contact with reality. Conditions change. Injuries happen. The opposition adapts.

Finances work the same way. Costs creep up quietly. Customer behaviour shifts. Interest rates move. Funding conditions tighten or loosen. A half-time review gives you the chance to pause, regroup, and decide what matters most for the second half.

Importantly, this isn’t about tearing everything up and starting again. Good coaches don’t do that at half-time. They focus on small, targeted changes that have the biggest impact.

Financially, that might look like:

• Adjusting pricing or fee structures
• Tightening expense management in specific areas
• Revisiting cash flow timing rather than total revenue
• Refining tax strategies while options are still open
• Re-prioritising projects based on actual performance, not assumptions

Reflection beats regret

There is also a psychological reason January (or early February) is such a powerful moment to review your financial position.

By mid-year, the pressure of year-end deadlines is still some distance away. That space matters. It allows for clearer thinking and better decisions. You are not acting out of panic – you are responding to information.

Author and performance coach James Clear often talks about the importance of reviewing systems, not just outcomes. Half-time is the ideal moment to do exactly that. Instead of asking only “Did we hit the number?”, you can step back and ask more practical, grounded questions:

• Are our systems producing sustainable results?
• Are we relying too heavily on a small number of clients or income streams?
• Are we working harder than we need to for the outcomes we’re getting?
• Have I actually put money aside for tax?
• Is my bank balance truly available cash, or will I need it later?

These are the questions that connect the metaphor to the real, week-to-week decisions being made inside the organisation.

In sport, half-time is often where momentum shifts. Teams that pause, regroup, and refocus tend to come out calmer and more composed. Financially, this moment offers the same opportunity.

The five-step framework: pause, reset, refocus

When half-time works well in sport, it follows a rhythm. The team stops. They look at the facts. They reset the plan. Then they head back out with clarity.

Financial reviews work best the same way. This is the five-step framework we use to turn half-time information into meaningful action:

• Set goals
  Be clear about what the second half is for. Is the focus on recovery, stability, or pushing for a strong finish? The answer shapes every decision that follows.
• Plan
  Adjust the plan based on what the numbers are actually telling you – not what you hoped they would say at the start of the season.
• Measure
  Look at the right metrics. Cash flow, margins, debt, tax exposure, and capacity matter more than vanity numbers.
• Report
  Translate the numbers into insight. What’s working? What isn’t? Where are the pressure points?
• Action / Reset
  Make small, targeted changes, then reset and go again. Half-time isn’t about perfection – it’s about momentum.

This framework reinforces a simple truth: half-time isn’t about judgement. It’s about clarity.

As management thinker Peter Drucker famously said, “What gets measured gets managed.”

Time is still your biggest advantage

From an accounting and advisory perspective, half-time is powerful because time is still on your side.

Tax planning is a clear example. When issues are identified in June, options are limited and reactive. At half-time, there is still room to plan properly – whether that involves restructuring, adjusting superannuation contributions, managing capital expenditure timing, or smoothing income across the year.

The earlier you see the issue, the more tools you have to address it.

Warren Buffett is often quoted saying, “Someone’s sitting in the shade today because someone planted a tree a long time ago.” Half-time is when you can still plant trees that make a difference in the current financial year – not just the next one.

A reset, not a restart

It’s important to be clear about what a half-time review is not.

It is not about judgement. It is not about beating yourself up for decisions already made. And it is not about rewriting history.

In sport, half-time is not a verdict – it’s information.

That mindset matters. Financial reviews work best when they are practical, not emotional. Look at the numbers. Compare them to expectations. Understand why gaps exist. Decide what needs to change. Then reset and go again with clarity and intent.

Leadership expert John Maxwell puts it simply: “Sometimes you win, sometimes you learn.” Half-time is where learning can still turn into winning.

Treat it like half-time, not full-time

The biggest mistake many organisations make is skipping half-time altogether. January drifts by. February fills up. Attention stays elsewhere. The real scrutiny only arrives when deadlines loom, and by then the scoreline is largely locked in.

If you approach this point in the year the way a strong sporting team approaches half-time, it becomes one of the most valuable moments of the season. A chance to stop. A chance to regroup. A chance to decide deliberately how you want the second half to unfold.

The second half hasn’t been played yet.

If you’d like a half-time chat with one of our great Coaches – the kind you’d have in the sheds, not a sales pitch – reach out. Sometimes a short pause and a fresh set of eyes is all it takes to shift momentum.

What a year it’s been at Next Dimension Accounting. As we close out 2025, it’s worth pausing to reflect on the journey – the shifts, the growth, the learnings, and the momentum we’re carrying into 2026.

This year hasn’t been business as usual. We’ve experienced transformative change – staffing transitions, leadership evolution, strategic realignment – all while deepening our impact for not-for-profits (NFPs) and businesses who trust us as their accounting and advisory partner.

Leadership Transitions: A New Chapter Begins

This year saw one of the most significant transitions in our firm’s history. After years of leading Next Dimension with passion and vision, Brendan stepped back from day-to-day leadership for a period, allowing space for organisational growth and reflection. In November 2025 we proudly congratulated Joanne Fahd as our new Chief Executive Officer, marking an exciting new chapter as we evolve from a founder-led business to a scalable, team-driven advisory firm.

Brendan has taken on the strategic role of Head of Strategy & Innovation, where he will concentrate on business development, quality assurance and strengthening our client partnerships – ensuring continuity of vision even as we grow.

This transition reflects our commitment to sustainable growth and strong leadership continuity as we scale into the year ahead.

Team Growth and Development

2025 has also been a year of internal momentum. Our broader team – including Brendan, Jo, Tina, and the rest of the Next Dimension crew – has continued to refine how we serve clients across specialist accounting, advisory, and strategic support. Policies, processes and systems have matured as we sharpen our focus on efficiency, quality and impact.

We’ve invested deeply in talent development, strengthened our internal infrastructure, and broadened our skill set to meet the changing needs of purpose-driven organisations across Australia. (And yes – we’ve definitely learnt a lot about juggling priorities and growth at the same time!)

Sector Landscape and Client Priorities

Across the NFP sector and broader business community, 2025 brought persistent determination amid ongoing external pressures. Many organisations finished the year tired but determined – committed to their missions and pragmatically positioning for the future.

Our clients grappled with evolving regulatory change, shifting economic conditions and growing expectations for strategic financial insight – all areas where Next Dimension has proudly stood alongside them to provide clarity, planning support, and tactical direction.

Looking Ahead to 2026

So what’s next?
We enter 2026 with renewed focus and real energy. Our leadership is stronger and more collaborative than ever. With Jo at the helm and Brendan driving strategy, we’re confident in:

• Scaling our advisory services to provide even deeper impact.
• Expanding support for purpose-led organisations navigating complexity.
• Investing in our people and systems so we can deliver with excellence.
• Strengthening partnerships and client outcomes across sectors.

The road ahead is bright – and absolutely packed with potential.

Thank You

Thank you to our clients, partners and extended community. Your trust, collaboration and feedback continue to shape who we are and how we serve.

From all of us at Next Dimension Accounting – here’s to a restful holiday season and a big year ahead in 2026.

Aged care providers now have an additional four months to prepare for the rollout of the Australian Government’s Support at Home reforms, which will now commence on 1 November 2025.

While the extension offers some welcome breathing room, it is essential that providers use this time wisely. Now is the ideal moment to assess readiness, strengthen internal systems, and ensure your organisation is well-positioned to implement these significant sector-wide reforms.

To support providers in understanding the transition, the government has released a comprehensive manual titled “Support at Home Program Manual – A Guide for Registered Providers”. This manual has been revised to reflect ongoing developments. The latest Version, 3.0, was released in June 2025, offering the most up-to-date and practical information to support implementation.

The manual provides clear guidance on how registered providers can meet the rules, procedures, and obligations under the Support at Home program.

For NFP organisations preparing their accounting and compliance frameworks ahead of the new arrangements, the key areas of interest include:

• Review of the service list to ensure alignment with eligible services under Support at Home
• Service pricing and caps, including how providers can set prices within government defined limits
• Revised payment cycles and their implications for cash flow and reporting
• Grandfathering provisions for existing HCP clients and participant contributions
• Allocation and responsibilities of Care management under the new model.

Reviewing your Support at Home service list offering

The Support at Home program will replace the existing Home Care Packages (HCP) and Short-Term Restorative Care (STRC) programs. The new program has a defined service list outlining the funded services available to eligible participants.

Recommendation:

The government has issued a document outlining the services that participants can access under the Support at Home program. It’s recommended that your organisation review their service list offering in comparison to the Support at Home Service List to gain a full understanding of in-scope and out-of-scope activities.

Setting prices for your aged care services

Fair and transparent pricing is a core principle of the new Support at Home program. The initiative is designed to introduce capped pricing, ensuring greater consistency across service providers and preventing any inflated costs. At this stage, capped pricing will not be introduced until 1 July 2026.

Leading up to commencement, providers are required to communicate to existing participants and publish their prices for the services they deliver on the My Aged Care Service and Support Portal.

When setting prices, providers must ensure that the price reflects the full amount of revenue they will receive for delivering the service.

Unlike the current Home Care Packages (HCP) or Short-Term Restorative Care (STRC) programs, where separate charges for administration, travel, or care management could be applied, the Support at Home (SaH) program requires that all such costs be included within the unit price of the service itself.

This means providers will need to carefully calculate and consolidate:

• Service delivery costs
• Administration and operational overheads
• Travel and logistics expenses
• Any relevant care coordination components.

A clear, well-structured pricing model will be essential to ensure compliance, financial sustainability, and transparency under the new framework.

Recommendation:

Although the government has not yet finalised the pricing caps for Support at Home services, providers should not wait to begin planning. It is strongly recommended that your organisation fully cost its regular services now to understand the minimum viable pricing required for sustainable service delivery.

By identifying your true costs, including direct care, overheads, administration, and compliance-related expenses, you’ll be in a stronger position to:

• Align future pricing with government-set caps
• Avoid under-pricing services that may become financially unviable
• Justify your pricing strategy internally and externally
• Respond quickly when the official pricing framework is released.

Taking a proactive approach now ensures your organisation is financially prepared and operationally responsive when the final price limits are announced.

Payment Cycles and Provider Cash Flow

Under the new system, there are new rules for claiming. Providers must only claim for services on their service list that have been approved in the participant’s Notice of Decision and support plan at the agreed price. Payments are made on an arrears basis, and providers can determine the frequency of their claims, whether that is daily, weekly, fortnightly, monthly or quarterly. Claims can also be submitted individually or in bulk. Once the provider’s claim has been validated for payment, Services Australia will:

• Deduct the government funded amount and participant contribution amount from the participant’s budget
• Pay the provider the government funded amount.

Note: It is the provider’s responsibility to collect the participant’s contribution.

Successfully validated claims submitted online to Services Australia have a 7-day processing time between approval and payment being made. For ongoing services, providers have 60 days after the last day of the quarter to submit their claims. For short-term services, providers have 60 days after the completion of the episode to submit their claim for each participant.

Recommendation:

Providers should review several areas to ensure that their financial operations are aligned with the changes.

It is important to review and align your financial system or CRM to ensure it can:

• Track service delivery against approved participant plans
• Separate government funding and participant contributions
• Handle multiple claiming frequencies and formats
• Issue participant statements in the approved format, including all required information.*

You will also need to develop a cashflow management strategy which includes:

• Recognising any pressures on cash reserves or liquidity to account for arrears-based payments
• Adjusting your billing cycle, if required, to match the 7-day turnaround time for Service Australia payments.

Streamline your claiming processes to ensure that:

• Staff are trained on what a provider must submit for a successful claim. More guidance is found in the document titled ‘Support at Home User Guide – submitting claims to the Aged Care Provider Portal’. This can be found on the department’s website.
• Internal deadlines for submitting claims are set well within the 60-day window.
• You establish checks for your data before submitting to avoid any claim rejections.

Track your claim submissions and reconciliation by building a dashboard or report that will monitor:

• Claims submitted vs claim status
• Funds received vs what was expected
• Participant contributions outstanding.

*More information on participant statements can be found in the Support at Home Manual, and a Support at Home monthly statement template can be found on the department’s website.

The ‘Grandfathered’ provision on participant contributions & Unspent HCP Funds

A ‘no worse off’ principle applies to grandfathered Home Care Package care recipients. This applies to recipients who, on or before 12 September 2024, were either receiving a Home Care Package on the National Priority System or assessed as eligible for a package. The ‘no worse off’ principle applies to participant financial contributions.

The premise is that participants will make the same contributions or lower contributions than they would under the Home Care Package system, despite any reassessment into a higher Support at Home classification.

In practical terms for HCP recipients, this means that:

• Recipients who did not have to pay an income-tested fee – will continue not to have to contribute to Support at Home
• Recipients who paid an income tested fee – will pay the same amount or less under Support at Home as they did under Home Care Packages.

Transitioned HCP care recipients who have unspent funds at the commencement of Support at Home retain these funds for use under Support at Home. The prioritisation of claiming varies depending on the type of service being delivered.

When claiming regular or short-term services (e.g. Care services, restorative or end-of-life support), the following order will apply:

• The participant’s active Support at Home Budget
• Provider-held HCP Commonwealth unspent funds – funds that are transitioned with the participant and held by the provider
• HCP Commonwealth unspent funds in the Home Care Account – funds that are transitioned with the participant, administered, and held by Services Australia.

For Assistive Technology and Home Modifications (AT-HM), the claiming order is:

• Provider-held HCP Commonwealth unspent funds
• HCP Commonwealth unspent funds in the Home Care Account
• AT-HM funding tiers – these will be the pre-allocated funding levels depending on participant needs and eligibility.

Recommendation:

For any grandfathered HCP care participants, Services Australia will notify them and their provider of the contribution amount payable. As the provider, you will need to invoice the participant for their contribution through your CRM or accounting system.

Providers need to monitor the amount of HCP unspent funds transitioned to the participant to avoid overspending in the participant’s budget. Also, when Provider-held funds are used for service delivery, it is essential to ensure that the funds have already been paid to the provider.

Care Management Allocation to Providers

Another key difference between the Support at Home program and the programs it replaces is the approach to Care Management – both in terms of its scope and how it is funded.

Care Management refers to the ongoing coordination, planning, and monitoring of aged care services tailored to the needs, preferences, and goals of the participant. It ensures services are delivered safely, effectively, and in line with the participant’s support plan.

Under the Support at Home program, care management will be delivered by a designated staff member known as a care partner. These care management activities will be funded through the provider’s Care Management Account.

For participants receiving ongoing services, 10% of their quarterly support budget will be automatically allocated to care management. These contributions will be pooled with care management funds from other participants to form the provider’s collective Care Management Account, from which eligible care management activities can be drawn.

Activities that can be claimed by providers from their care management account are:

• Care planning – involves working with participants, their families, and support networks to identify individual needs, goals, and preferences and to develop tailored care plans, service agreements, and budgets.
• Service planning and management – involves the ongoing coordination and management of funded aged care services to ensure they are comprehensive, culturally appropriate and responsive to the participant’s needs.

Monitoring, review, and evaluation involve the ongoing assessment of the participant’s needs, goals, and care outcomes through regular communication, case conferencing, and evaluation.

Support and education involve empowering participants to make informed decisions, promoting wellness and reablement, and helping them navigate the aged care and health systems.

Recommendation:

Providers must ensure that their care partners understand the scope of care management. We recommend that you clearly distinguish between service delivery activities that form part of routine service delivery and those that are claimable under care management activities from the Care Management Account.

The transition to the Support at Home program brings significant changes that require careful planning and preparation by providers. If your organisation needs support in assessing the financial implications of the new program, Next Dimension Accounting is here to help. Our team has played a key role in guiding clients through the reform process and preparing them for what lies ahead.

For further information about Support at Home, get in touch with us today.

Karen Wong, Operations Manager at Allergy & Anaphylaxis Australia (A&AA), has overseen significant growth in the organisation’s operations. With expert guidance from Next Dimension Accounting, A&AA transitioned to more structured, cost-effective financial systems that have enabled stability and scalability during a critical phase of development.

A&AA is a registered charity founded in 1993. It is a national patient support organisation dedicated to helping individuals and carers alike in managing allergic diseases. Historically focused on food allergies, it now covers the full spectrum of allergic disease such as insect allergy, allergic rhinitis (hay fever), atopic dermatitis, allergic asthma and other potentially life-threatening conditions. It created Food Allergy Week, held in May each year, to raise awareness in Australia.

Headquartered in Castle Hill, Sydney, the A&AA team has tripled in size in recent years, with revenue increasing to $1.8 million per annum. As many of A&AA’s roles require clinical expertise, its volunteer base remains intentionally small, focused on governance and administrative support.

Partnering for Stability and Scalability

The partnership with Brendan Lucas, Founder & Managing Director at Next Dimension Accounting (NDA), began when he was recommended to review A&AA’s payroll systems. With their in-house bookkeeper nearing retirement, the organisation explored outsourcing options that could support growth while maintaining financial oversight.

Next Dimension stepped in with a customised solution, combining Brendan’s strategic leadership with the capabilities of a broader NDA accounting team. The result was a smooth, well-managed transition from internal systems.

“It is actually costing less than our spend on an on-staff person doing payroll and bookkeeping ,” Karen explains. “The Next Dimension team are very good at producing management reports that meet compliance standards, and all functions are done well.”

Today, Next Dimension manages all payroll and accounts processing and delivers monthly reporting.  A&AA and NDA hold regular review meetings. As a grants based organisation, A&AA deals with complex acquittals at times, and Next Dimension assists when acquittals require extra accounting knowledge. “They are a key part in helping us be a financially sound organisation,” says Karen.

In addition to operational support, Karen consults directly with senior NDA team members Tina and Vivian for higher-level accounting matters. “We get a lot more out of the outsourced team with their higher-level analysis and commentary,” she says.

Efficient Systems and Proactive Problem-Solving

One of the most valuable aspects of the relationship has been Next Dimension’s ability to streamline A&AA’s accounting processes and embed consistent routines. “It’s now very stable and consistent, a nice routine where they are really functioning like an internal accounts team, just on the end of a video call,” says Karen.

She especially appreciates the team’s problem-solving approach and efficient use of technology. “The Next Dimension team can think through problems for us and implement something once, rather than us wasting time with multiple attempts to work it out ourselves.”

For example, the team introduced stronger processes around financial security and system access. “They helped us implement security measures in Xero and moved us to digital debit cards, which has improved security and minimised disruptions,” says Karen, “and the team is always up to date on things happening in the accounting space.”

From Firefighting to Forward Planning

Karen reflects that in the past, the organisation was often stuck in reactive mode. “One of the challenges while we were very small was that we were always firefighting rather than improving the business,” she recalls. “Now, we can take advantage of the expertise provided by NDA and this adds focus to our strategic thinking and actions.”

That Next Dimension expertise has helped A&AA elevate its reporting, budgeting and forecasting practices. 

With input from the NDA team, what was once a basic budget is now a multi-year financial planning model. “We’ve refined our budgets each year. We now have a three-year forecast, which allows us to see how we can fund new developments and keeps us focused on our financial sustainability,” notes Karen.

Digital Strategy and New Projects

Operations strengthened by good accounting practices have supported A&AA’s recent strategic expansion.  In response to growing public demand, A&AA adopted a digital-first strategy, with a major investment in a new website and upgraded IT infrastructure. The strategy also included more sophisticated analysis of how users interact with digital resources to better shape service delivery.

“It was a very big undertaking and investment,” says Karen, “but we are now starting to see good results, including 30% growth in website traffic since launching our new website in October 2024. The new site gives the public quick access to information and enables one-on-one support when needed.”

The organisation is also advancing a number of targeted digital projects:

• Eating Out with Allergies: A national awareness campaign about staying safe when dining out, and understanding rights and responsibilities related to food allergies.
• Eczema Connect: A clinical trial conducted in partnership with Perth Children’s Hospital. The trial will assess the impact of expert advice prior to a specialist appointment.
• The Shared Care for Allergy Project: Delivered in collaboration with the National Allergy Council to improve access to specialist care and shared care models. Funding is provided by the Australian Government, Department of Health.

“With allergies, you are living with them every day. It’s about getting optimal care,” says Karen. “We provide information in bite-size pieces. We’ve found that when people understand more, they get much more out of a specialist appointment. Navigating the health system is challenging and understanding who may be involved with your care, and why, helps people to find health care professionals that can support their diagnosis and treatment.”

A Foundation for Future Growth

Karen emphasises that the partnership with Next Dimension has been instrumental in helping A&AA balance operational stability with ambitious long-term goals. “They’ve really become the financial engine behind our operations,” she says. “Their team brings qualified expertise, timely reporting, and deep financial insight that we wouldn’t otherwise have access to.”

The organisation is committed to raising public and professional awareness about allergic disease, which impact an estimated 6 million Australians “Our vision is to improve quality of life for all Australians with allergic disease.  We do this through advocacy, support, education and guidance. Central to this is a commitment to  empower people to help them with their everyday life and to connect with credible and evidence-based information and health professionals,” says Karen. As A&AA continues to expand its impact and reach, financial strategy remains central to its success.

“We have very audacious goals,” Karen acknowledges. “But with the knowledge, reporting, and financial nous of the Next Dimension team, we can build a strong foundation to achieve them.”

In the lead-up to the next federal election, the 2025 Federal Budget positions itself as a cautious but considered offering for Australian businesses and not-for-profits (NFPs). Delivered in an environment of inflationary pressure and global uncertainty, the Budget favours targeted relief over sweeping structural reform

A Budget of Targeted Relief, Not Systemic Reform

For businesses and NFPs operating in consumer-facing sectors, the continuation of income tax cuts and energy rebates may translate into marginal improvements in discretionary spending and donor activity. The starting rate of income tax will reduce from 16% to 14% by 2027–28, a move designed to ease cost pressures on households. However, given the relatively small size of the annual tax saving for most income brackets, the flow-on benefits for community contributions and service demand are likely to be modest.

Small businesses and NFPs will also benefit from extended energy rebates, with around one million eligible enterprises receiving up to $150 directly off their power bills through to the end of 2025. In addition, the Energy Efficiency Grants for Small and Medium Enterprises program will provide $56.7 million in grants (up to $25,000 per business) to support upgrades such as replacing inefficient appliances and improving heating systems.

Workforce Reform

A notable reform in this year’s Budget is the proposed ban on non-compete clauses for employees earning under $175,000, part of a broader effort to enhance wage growth and labour market flexibility. While this shift may benefit workers seeking new opportunities, it may pose real challenges for employers — particularly small businesses and not-for-profits that already struggle to compete on salary alone.

NFPs already have limited capacity to compete on salary, as we’ve highlighted previously, so the removal of non-compete protections for small to medium businesses and not-for-profits may intensify talent churn.

No Instant Asset Write-Off

One omission for small-to-medium enterprises and community organisations is the failure to extend or legislate the $20,000 instant asset write-off. As it stands, the threshold is set to revert to $1,000 from 1 July 2025, significantly limiting the ability of smaller operators to invest in capital improvements such as IT systems, machinery, or office upgrades.

Health, Aged Care and Frontline Service Delivery

The Budget includes several headline investments in healthcare and aged care including:

• $2.5 billion to support wage increases for aged care workers,
• $8.4 billion to expand bulk billing, aiming to deliver 18 million extra GP visits annually by 2030, and
• $1.8 billion in top-up funding for state-based public hospitals.

However, without proportional increases in operational or infrastructure funding, the risk is that providers may be unable to scale service delivery in line with policy ambition.

ATO Compliance

The government is making a substantial investment in tax compliance and enforcement. With $999 million allocated over four years, the Australian Taxation Office (ATO) will expand its compliance footprint through a suite of programs aimed at improving integrity and increasing revenue without raising taxes. Funding will be allocated across the Tax Avoidance Taskforce, Shadow Economy Program, Personal Income Tax Compliance Program and the Tax Integrity Program.

Regulation, Fair Trading, and Sector Integrity

Beyond tax compliance, the Budget includes several measures aimed at strengthening the regulatory environment including $12 million to improve oversight of the Franchising Code of Conduct, enhance detection of phoenixing activity (especially in construction), and extend protections against unfair trading practices and $3 million for ASIC to target illegal phoenixing practices.

Final Reflection

The 2025 Federal Budget delivers measured, election-conscious support for businesses and not-for-profits, with selective relief measures and a focus on health and workforce reform.  

What’s clear is that both businesses and NFPs will need to navigate the coming year with increased scrutiny, tighter margins, and growing demand.

The past twelve months have tested and rewarded NFPs and businesses in equal measure. As we head towards 2025, it’s worth taking a moment to assess where we stand and consider how we can maximise the opportunities ahead.

Interest rates

The cash rate held steady at 4.35% throughout 2024, and while everyone loves to guess when rate cuts might finally arrive, experts say we may have to wait until mid-2025 to see any changes, though some recent reports suggest it could be February 2025.

Award wage rate increase impacts

Midway through the year, many workers saw a boost, with the award wage rate climbing to 3.75%, adding another layer of complexity for businesses and NFPs already navigating tight margins.

Throughout 2024, high interest rates and wage increases have caused many clients to look at refinance options, tightening their expenditures and reviewing their business plans. 

Boards focusing on managing risk

At the board level, many companies and NFP organisations concentrated on managing risks, revising budgets, and exploring new strategies to navigate challenges. In some cases, survival tactics became necessary, with several businesses and NFPs opting for amalgamations as a means to stay afloat.

Instant asset write-off and the Federal Election

Legislation to extend the $20,000 instant asset write-off for another year was left on the cutting room floor as Parliament rushed to finalise bills before Parliament rose for 2024. This leaves the future of this important tax incentive uncertain. With the federal election on the horizon, both parties may focus on this issue when campaigning.

Superannuation reforms stalled

The revised super rules targeting balances over $3 million are still to be released, adding to uncertainty for taxpayers. It means there could be tweaks before passing in parliament, making it harder to assess their future impact.  Again, this issue may be impacted by the upcoming federal election.

Staff challenges

With Australia’s unemployment rate holding steady at around 4%, the challenge of attracting and retaining high-quality staff is expected to persist, continuing a trend seen over the past few years.

Support at Home Reforms

The Government’s Support at Home program will be rolled out in some form from 2025 onwards, although it is still unclear how those critical providers, including transport, will be funded. The program will bring together current in-home aged care providers and is intended to improve access to services, equipment and home modifications. It will be interesting to watch how this impacts NFPs and businesses that cater to the sector – we are working closely with a number of clients on this.

Expect greater ATO and ACNC scrutiny

From the ATO’s point of view, increased audit activity will be seen in the new year. The ATO’s revenue collections have been under immense pressure in the past few years, given the impact of the pandemic on budgets. 

Greater scrutiny and focus on data matching between SuperStream and single-touch payroll reporting will be used to identify employers delaying superannuation payments. Employers who fail to meet Super Guarantee Contribution deadlines could face interest charges and potential penalties.

The ACNC will continue to take a more active role in the NFP sector, with the public demanding more oversight of charitable donations. However, stricter regulations and compliance requirements should improve the outcomes of organisations that qualify for charity status. 

Strategies for stability and growth

As well as tightening budgets, forward-looking organisations have responded to financial challenges with plans to improve revenue streams.

Boards have been ensuring the financial security of their organisations by returning to their investment strategies. Those businesses – and some NFPs – sitting on excess funds have seen their money work productively for them. Higher interest is boosting deposits, cash rates are up and most global stockmarkets are performing well. 

As business plans are reviewed, we’re seeing most clients look at new ways to stand out. Although it is a very competitive environment, with everyone looking for ways to make their dollar go further, there are strategies to get ahead.

Your game plan

If you haven’t already, plan for your year ahead based on more of the same conditions for at least the first half of 2025, and sharpen your familiar game tactics:

• When dealing with suppliers or making major purchases, make sure you negotiate to get the best deal.
• Continue to find ways to operate more effectively and economically, especially by utilising technology to automate tasks.
• Review each segment of your business and analyse how its returns could be improved in the best way.
• Re-engage with your key customers and staff – they will be critical to your success.

For your game plan to maximise positive developments and achieve sustainable growth, don’t forget these two essentials: 

• Bring out the best in your people, whether they are paid staff or volunteers
• Enhance the benefits for your customers or clients.

Wishing all our clients and broader network a Merry Christmas and a Happy New Year. As we look ahead to 2025, we encourage you to connect with us to explore strategies to help you seize opportunities and tackle challenges confidently in the year to come. Reach out to our team today to start that conversation.

As the philanthropic landscape evolves, Not-for-Profit (NFP) organisations are facing heightened scrutiny and rising expectations. The Productivity Commission’s report Future Foundations for Giving highlights that NFPs are subject to “new scrutiny because of changing community expectations and standards.”

In response to these pressures, many NFPs are rethinking how they operate, particularly when it comes to financial sustainability. The idea that NFPs should remain entirely distinct from business practices is outdated and increasingly unviable in today’s complex and competitive environment.

NFPs, like businesses, must think strategically to ensure their long-term success and resilience. This shift in mindset doesn’t undermine an organisation’s core values or mission; instead, it enhances its ability to serve communities and meet growing needs.

NFPs Can and Should Think Like Businesses

A persistent misconception is that NFPs must operate with a charitable mindset that is removed from the financial and operational strategies used by businesses. 

The Australian Charities and Not-for-profits Commission (ACNC) has recently directly addressed these misconceptions, encouraging NFPs to think strategically about their financial practices. The ACNC clarifies that:

• A charity can spend money on administration.
• A charity can make a surplus (profit).
• A charity can keep money in reserve.
• A charity can invest its funds.
• A charity can undertake commercial activities.

These facts underscore that, like businesses, NFPs need the flexibility to manage their funds, plan for future growth, and invest in their own infrastructure. By adopting practices such as building reserves, making smart investments, and creating diversified income streams through commercial activities, NFPs strengthen their financial resilience. This business-like approach is not only permissible but crucial for long-term sustainability.

The Influence of Uncharitable

This evolving perspective is reflected in the documentary Uncharitable, inspired by Dan Pallotta’s groundbreaking TED Talk, which challenges conventional ideas about nonprofit work. Pallotta argues that to enable NFPs to drive change truly, we must remove the outdated constraints placed on them. 

The Role of Business Practices in NFP Resilience

Incorporating business principles into the operation of NFPs does not detract from their core mission; instead, it bolsters their ability to deliver on that mission. By adopting a more business-like approach, NFPs can:

• Plan for Sustainability: Surplus funds should not be seen as a sign of greed but as an opportunity for growth. Building reserves allows NFPs to weather economic downturns, invest in new initiatives, and scale their services in response to rising demand.
• Invest in Infrastructure: Much like businesses, NFPs need to invest in infrastructure, technology, staff development, or operational improvements. These investments can lead to greater efficiency and long-term cost savings, ensuring more funds are directed toward the mission.
• Diversify Income Streams: NFPs can use business-like strategies to diversify revenue, reducing reliance on volatile donations and grants, whether through social enterprises or other entrepreneurial efforts.
• Drive Innovation: By adopting the risk-taking mindset often found in business, NFPs can innovate how they deliver services, engage with communities, and tackle complex social issues. This flexibility allows them to adapt to changing environments and seize new opportunities.

The Role of Accountants and Financial Expertise

Just as businesses rely on financial professionals to ensure their growth and stability, NFPs can benefit from the expertise of accountants and CFOs. Financial professionals provide critical insights that empower NFPs to adopt business-like strategies while maintaining compliance with regulations and ethical standards. 

As NFPs face increasing scrutiny and rising expectations, adopting business principles is no longer an option—it’s a necessity for future resilience. 

Our team works with clients to ensure NFP and charities are fit for purpose, now and in the future. Contact us to find out more.

Download our handy infographic:

Australia’s Productivity Commission has released its Future Foundation for Giving Inquiry Report and made recommendations on how to increase philanthropic giving.

The Commission commenced its review in 2023 and published a draft report later that year. It then conducted public hearings and incorporated public sector submissions and consultations on the draft, releasing the final Inquiry Report on 18 July 2024. 

In the final report, there were nine significant findings and 19 recommendations for reforms for the government to adopt. The recommendations cover a wide range of issues across the philanthropic sector, with four key areas of focus:

• An improved deductible gift recipient (DGR) system
• Better access to philanthropic networks for Aboriginal and Torres Strait Islander people
• An enhanced regulatory framework for charities and ancillary funds
• Improved public information on charities and donations.

As we noted in our January article on the draft report, any reform of philanthropic giving and DRG rules might necessitate changes in accounting processes, so Australian NFP organisations should seek professional advice regarding potential impacts, particularly with reforms related to DGR status and corporate giving.

Public contributions to the report

Many charitable organisations took up the invitation to respond to the draft report. Feedback from Inquiry participants took the form of 1611 public submissions, 1593 brief comments, more than 120 consultations, 10 roundtables plus 6 days of public hearings held in February 2024. 

The final report captures the views of those who made submissions and comments, including more than 50 interest groups. Some comments of interest included:

• On defining whether or a not certain charities are PBIs, Justice Connect (sub. 269, p. 4) commented: “PBI requirements ‘can only be fully understood by reference to 90 years’ worth of case law and a lengthy ACNC Commissioner’s Interpretation Statement’.”

• On the DGR, the Community Council for Australia commented: “We would say very strongly, as we have said for over a decade, the DGR system is an absolute mess, it’s dysfunctional, it’s counterproductive, it favours the wealthy over the poor, the politically connected and powerful over the disadvantaged, and it’s not understood, it’s not well administered, and it doesn’t, I think, provide the kind of benefit that it could was it more effectively established and eligibility was clearer, and the processes around DGR were more transparent and equitable. And I think the measures that you’ve put forward are certainly a big step in that direction. So we applaud the report, we applaud what we see is the key recommendation.” (trans., p. 286) 

Report highlights

Some central findings and recommendations highlighted in the 468 page final report were:

• The deductible gift recipient (DGR) system is not fit for purpose and should be reformed – Reform is needed to simplify the DGR system and direct support to where there is likely to be the greatest net benefits to the community from subsidised philanthropy. If adopted, more charities overall would be able to access tax-deductible donations. 

• Explicitly consider the effects on volunteers when designing policies and programs – To support volunteering, Australian, state, territory and local governments should consider how changes to policies and programs would affect volunteers.

• Reforms are needed to enhance the regulatory framework for charities and to support high levels of public trust and confidence in charities now and into the future – Establishing a National Charity Regulators Forum comprised of Australian, state and territory charity regulators “would formalise the regulatory architecture to embed coordination and cooperation”.

• The framework must keep pace with societal trends and developments – These include changes in transaction technologies and new ways of giving. 

• The Australian Government should create more value for the public from the data collected about charities and giving, including by publishing aggregate information on corporate giving and by requiring listed companies to be more transparent to stakeholders about their giving. 

DGR status

Changes needed to Deductible Gift Recipient (DGR) status, including proposed reforms to simplify access to the DGR, are a significant development. Predictably DGR issues attracted many comments in the report. It is estimated that with DGR simplification reforms, the number of charities gaining DGR status would increase from about 25,000 to 30,00–40,000 charities, and some participants raised concerns about the increased competition. For example, “the Sydney Children’s Hospitals Foundation (sub. DR457, p. 4) was concerned that a proliferation of small charities with overlapping objectives would increase inefficiency and lessen the ‘impact of charitable donations’.” 

The report confirms that DGR status continues to be a key point of reform, so, as we noted in our recent article, charities should prepare themselves for ongoing DGR requirements. 

Volunteering

Finding 3.2 highlights that while volunteering remains prevalent in Australia, the formal volunteering rate has declined. In 2022, around 6 million Australians volunteered for organisations, but nearly double that number engaged in informal volunteering—helping individuals outside their families and beyond the structure of formal organisations or groups.

The report observes that broader social, economic, and demographic shifts have influenced volunteering participation. Increases in real wages and workforce participation over recent decades have raised the opportunity cost of volunteering. People are staying in the workforce longer, and there has been a rise in female labour force participation.

The report suggests policy options to enhance volunteering, such as simplifying the process through behavioural economic strategies. This might involve technology that more efficiently connects potential volunteers with opportunities.

Regarding government tax incentives for volunteering, the Commission believes that targeted government grants addressing specific needs would likely offer greater net benefits to the community than tax incentives, provided they are well-targeted and evaluated.

Recommendation 7.7 advises considering the impact on volunteers when designing policies and programs, including addressing any negative effects on volunteer participation and exploring volunteer opportunities within policy or program development.

Recommendation 9.4 calls for the Australian Bureau of Statistics (ABS) to enhance the relevance and utility of public information sources related to volunteering.

National regulation of charities

Recommendation 7.5 proposes the creation of a National Charity Regulators Forum, which would include regulators from Australian states and territories. This Forum would represent a move towards a “joint stewardship” model for charity regulation. Its terms of reference would be defined in an intergovernmental agreement.

The Forum’s objectives would be to clarify roles and responsibilities, enhance collaboration and information sharing, advance reforms in charity law and regulation, manage regulatory risks, and coordinate responses to significant misconduct.

The report also suggests reforms to strengthen the Australian Charities and Not-for-Profits Commission (ACNC). It emphasises that these reforms are more likely to succeed if the ACNC is equipped and resourced to take a more assertive regulatory stance while continuing to support charities through education and guidance.

Keeping pace with changes in giving

The Commission recognises that the “philanthropic and volunteering landscape” is continually evolving. Donors now have a wider range of choices and are influenced by new transaction technologies in their giving habits. Innovations like QR codes and peer-to-peer giving platforms are emerging as popular methods.

The report raises concerns about whether the current system is adequately prepared to address the challenges posed by these new online giving trends. It highlights that the rise of online giving platforms could introduce new regulatory risks, which must be proactively monitored to sustain trust and confidence.

Reporting and publishing evaluations

The Commission addressed the issue of reporting and publishing evaluations, noting that while there are benefits to governments publishing effectiveness evaluations, these do not outweigh the associated costs and risks. Significant risks include the potential for biasing donors towards certain types of interventions that are easier to measure and towards charities that can afford evaluations. Additionally, there is a risk that such information could lead charities to alter their activities to appear more successful based on specific metrics rather than focusing on the needs of their beneficiaries (Finding 9.1).

The Commission also highlighted voluntary initiatives to support not-for-profit (NFP) organisations in measuring and reporting outcomes and impact, such as Chartered Accountants Australia and New Zealand’s ‘Measuring Social Impact for Better Reporting’ guidance (CA ANZ 2023). These initiatives offer valuable resources to enhance performance reporting without imposing the costs of mandatory reporting requirements on all organisations.

The Inquiry Report and the Overview can be accessed here. 

If you would like to discuss any of the issues raised in this article, get in touch with our team today.

Kathryn Akre, Chief Executive Officer at Bathurst Community Transport Group, which covers a vast area in regional NSW, has appreciated how the Next Dimension difference has enhanced the NFP’s operations.

The team from Next Dimension provides an on-Demand CFO service. It is responsible for financial reporting to the CEO and Board, liaising with the auditors, and, when required, providing short-term bookkeeping services.

INTRODUCTION

Bathurst Community Transport Group (BCTG) is an NFP that provides community transport around Bathurst and to the regional centres of Orange, Lithgow, Dubbo, Katoomba and Sydney in NSW.

BCTG has been operating since 1978 and actually operated the first ever Community Transport buses – Australia now has Community Transport services in every Local Government Area. 

Currently, BCTG has 7 staff members, as well as a keen force of regular volunteers. From its South Bathurst premises, the NFP deploys a fleet of 13 vehicles.

SERVING THE COMMUNITY

“We transport the elderly and vulnerable people. It could be to Orange 55km away or to Sydney, more than 200km away,” says the organisation’s CEO, Kathryn Akre.

This much-loved Community Transport organisation is powered by volunteer drivers. Its subsidised services for elderly and vulnerable residents include medical, shopping and social trips, with local residents transported from door to door.

About 10 years ago BCTG began the special ‘Radiation Bus’ service. Each weekday it commutes from Daffodil Cottage in Bathurst to the Department of Radiation Oncology at Orange Base Hospital. This special service helps support clients together as they go to and from their regular appointments for radiation treatment. The BCTG Radiation Bus service relies solely on donations as it receives no Government funding.

THE CHALLENGES FACING COMMUNITY TRANSPORT SERVICES

For 46 years BCTG has risen to meet the challenges it has faced. “We’re a small organisation; however, we punch above our weight,” says Kathryn with pride.

Covid-19 represented a huge challenge to community transport organisations, and more recently the cost of living has made its impact. “Funding for community transport services has not kept pace with rising prices, including increases in fuel, insurance and rent,” Kathryn points out. However, responding to increasing operating expenses with a hike in the prices charged for services is difficult. “We know that our customers are struggling”, says Kathryn.

The organisation needed to take strategic measures to become more resilient. “I’m not an accountant but I knew we needed analysis and top level advice, from someone who is an expert in the industry.” That’s where Next Dimension Accounting came in.   

NEXT DIMENSION’S EXPERTISE

BCTG looked for outsourced accounting services that could help strengthen their operations. “We needed to know where we were at, and what levers we would need to pull in order to grow and thrive – but I had neither the time nor the skillset to do this,” says Kathryn. 

“We interviewed four people and clicked with Brendan Lucas from Next Dimension Accounting.” Next Dimension’s established track record of working with Australian Community Transport organisations ensured a positive start.

“Next Dimension are experts in Community Transport. They know Community Transport thoroughly, including reporting requirements and the rules,” says Kathryn. 

Brendan, supported by the Next Dimension team, acts as the organisation’s CFO. “He provides the ability to look at an issue and offer good advice quickly. It would take me much longer,” she adds.

NEXT DIMENSION BOOSTS EFFICIENCIES

Since Next Dimension Accounting was appointed as an outsourced accountant for BCTG in November 2023, the NFP has seen numerous benefits arise from the arrangement. “Brendan’s team has been able to make such a difference since they came on board,” says Kathryn.

The external accounts services have been beneficial for analysing costs, budgeting and planning for the organisation’s future development. “It helps to have someone who is outside the organisation but knows the Community Transport issues challenging us, and can support us in our decision making, ” says Kathryn.

Access to a whole outsourced accounts team can provide a timely advantage. “Recently our office bookkeeper left and while we started looking for a replacement, Next Dimension was able to ‘flick a switch’ to provide temporary bookkeeping within about 12 hours,” recalls Kathryn. “It was such a relief.”

Reporting and presenting to The Board is also part of the services provided. “The Board really values the input of Next Dimension Accounting,” says Kathryn. “Brendan presents at Board meetings and provides a clear, thorough analysis of the figures. He is able to highlight the risks and identify where we need to spend money, and where we could make money. A Board member with many years of experience told me at one point that it was the best explanation of finances he had ever received.” 

Kathryn says, “For me the value is having an advisor who understands the quirks of Community Transport.”

TECHNICAL SUPPORT

Next Dimension has also provided assistance with technology that makes the BCTG office operate more efficiently. For example, they set up Xero to be more automated than it was.  Staff can phone the Next Dimension team to get tips on how to do something with the bookkeeping or accounting software. 

“I don’t know what I don’t know – or have the time to sort out how to change the set-up,” says Kathryn. “It’s just nice to have a team who knows Community Transport supporting you.”

FUTURE GROWTH FOR BCTG

In the future, BCTG hopes to provide more community transport services by expanding the tour company it runs. “We have been running the company Bathurst Tours for two years now, which helps to cover some of the community transport service costs,” explains Kathryn. Operating the tour company helps to offset the considerable expenses of providing community transport services across such a large area. “We are growing Bathurst Tours so we can welcome more tourists to discover the beautiful Bathurst region,” says Kathryn. 

For the BCTG office itself, they just want to make everything more efficient, while supplying the highest quality service possible. For a Community Transport organisation where the farthest boundary is in excess of 100 kilometres from the office, it is no small ambition, but Next Dimension is helping them all the way. 

Kathryn notes, “The city-based Community Transport organisations have their own issues, but they do have economies of scale that we just don’t have in the regions.” 

“In the city the Community Transport services don’t have to deal with the distances or weather conditions, such as snow or bushfire,” she adds. “But I like the fact that although Brendan is from Next Dimension, which is city based, he gets it.”

The ACNC has recently released its Australian Charities Report 10th edition, highlighting the impact of rising costs on the charity sector.

In her foreword, ACNC Commissioner Sue Woodward details critical findings, including sector revenue and expenses, dramatic increases in employee expenses, and changes in donations and philanthropy. 

She also points out that while the cost of operating and delivering services has increased, charities also require help finding sufficient revenue or donations to keep pace with these rising costs.

The Next Dimension Accounting team continues to support our clients, who are established organisations, by working with them to identify and manage inflationary pressures.  Our clients have found that outsourced financial support is a positive way to combat rising costs, stay across all financial information, and address strategic planning challenges and key person dependency.

Key takeaways from the report ACNC Charities Report

Some of the key takeaways from the report include:

Expenses vs revenue – increases in expenses and liabilities outpaced increases in revenue in 2022 (in percentage terms). Total revenue increased by $11 billion to a record high of just over $200 billion, but expenses increased by $22 billion in the same period.

Employees—Charity spending on employees in 2022 increased nearly 10% compared to 2021—the highest annual percentage increase recorded. Charities remain a major employer, accounting for 10.5% of the Australian workforce.

Donations and bequests –In 2022, donations and bequests totalled $13.9 billion, an increase of more than $584 million over 2021 figures. Donations grew by 4.4%. However, this was lower than the 5.3% increase in donations reported in 2021.

Philanthropic spending—Charities reported spending $11.7 billion on grants and donations to others, an increase of 21% from the previous reporting period.

Revocations—From 1 July 2022 to 30 June 2023, the ACNC processed 1,543 voluntary revocations. The ACNC also revoked seven charity registrations due to compliance issues. 

Managing the impact of rising costs

The report findings show that preparing your charity or NFP for the ongoing impact of rising costs is imperative. 

With advice from our trusted team, you can stay on top of financial data to ensure your NFP or charity remains resilient in the current climate. Some ways we can help you include:

• Use technology to measure, monitor and model financial information. Providing oversight and insight.
• Working hand-in-hand to develop strategies and actions capitalising on opportunities and reducing risk. 
• Measuring performance KPIs to proactively manage issues before they negatively impact the organisation.
• Expert bookkeeping and payroll services.

Our Capability Statement details our approach, services, and results in greater detail. You can download a copy here.

The complete Australian Charities Report can be found here. This 10th edition draws on ten years of existing data to highlight fundamental changes across the charity sector in ten graphs.
The ACNC’s interactive Charity Data Explorer provides filters to run custom searches. This year, the explorer has been updated to allow filtering by postcode.

Brendan Lucas will participate in this important series to support and empower not for profit organisations.

If funding and revenue for FY25 are weighing on your mind and you’re feeling stuck, Benefolk’s two-week online webinar series will help you feel inspired, energised and organised.

From 23 July – 1 August, hear from 14 of the NFP and charity sector’s leading advisors across major gifts, bequests, corporate partnerships, social enterprise and government relations and funding.

Plus, tap into the expertise of our sustainability and marketing strategists, feasibility,business planning and data analytics specialists to pull together a comprehensive and integrated plan for success. Learn what has worked well in other organisations and how to apply those insights to your context.

You can join individual sessions of interest, or buy a six-part Series Pass with all recordings, so you have all the tips, case studies and inspiration on hand throughout FY25. There’s also the chance to book a 60 minute online consultation with our featured specialists on the soon-to-be-launched Benefolk Expert Bar.

If you want to take “Diversify Income” from a bullet point in the Board Papers to an actionable roadmap, take the time to engage with these sessions and have meaningful conversations with your team.

Learn more and register here: [Click here to register]