STAR Community Services provides transport and quality care assisting people who are frail, aged or have disabilities in the Redlands, Ipswich, Logan and Gold Coast areas of Queensland to live healthier, independent lives.
Brendan Lucas specialises in accounting solutions for the not-for-profit sector through cloud-based accounting systems.
Operating an NFP that provides community services in Australia today requires massive drive, dedicated staff and volunteers, and a commitment to strict reporting requirements. Meeting community expectations and government regulations becomes even harder as service offerings increase. A fortunate encounter with Brendan set STAR Community Services on a path to effective cloud accounting systems and peace of mind for the future expansion of the organisation.
NFP RAPIDLY EXPANDING ITS SERVICES
In 1996, the Special Transport Assistance Redlands Association Incorporated (STAR) commenced operations with a single service – transport. For many years the STAR organisation was focused on building up the single service. General Manager Ms Patsy Wilshire recalls, “Through the local Redlands Council we identified further needs in the local community.”
The phase-in of Australia’s National Disability Insurance Scheme (NDIS) changed the landscape for many community service providers. At STAR Community Services it prompted the development of a strategy for the organisation’s future. During the review and planning stage, it was apparent, says Ms Wilshire, that “just offering a single service that was dependent on government funding involved a lot of risks.”
In 2015, STAR changed from an Incorporated Association to a Company limited by guarantee, and had evolved into an NFP with a large client base, significant turnover and skilled staff. STAR developed a strategy to broaden the focus of services, in line with local community needs, and offer: home care packages; NDIS support programs; social support; fitness clubs; gardening; home maintenance and domestic assistance.
On the brink of further planned growth, the need for accounting systems that matched the expansion of the organisation was paramount.
Ms Wilshire recalls, “There were persistent headaches with issues like managing cash-taking on our transport services.
From the time STAR started broadening their offerings with a whole range of services, they required extra accounting support. Developing a larger team, and increasing personnel to cover the new services, also meant more accounts assistance was needed.
Externally, the reporting requirements related to NDIS services were also quite demanding, adding to the pressure on the STAR team.
To top that off, Ms Wilshire adds, “Our financial manager, who was also our treasurer, was ready to retire.”
Outsourcing accounts to a professional financial team looked like it could be a timely solution. Encountering Brendan at a conference was the turning point.
BRENDAN ON BOARD
“We met with Brendan when attending a community transport conference. It gave us the opportunity to chat with him and talk around different options, informally,” says Ms Wilshire.
After meeting with Brendan and reviewing the proposal that contained recommendations for their organisation, STAR engaged Brendan and his team to take on an outsourced accounting role using cloud-based accounting systems.
Ms Wilshire says, “What helps in regards to outsourced accounting is that we still feel that Brendan and his team are part of our finance team. Brendan makes the time to come to board meetings personally, which is a huge benefit when we are reporting to the STAR Community Services board.”
SERVICES FROM BRENDAN
Integrating and automating STAR’s accounting systems proved to be the perfect solution for their rapidly expanding NFP organisation.
“Like many other multi-service providers we were dealing with multiple databases. Rather than continuing to struggle with three different systems, Brendan enabled us to set up a single system for invoicing,” explains Ms Wilshire. Brendan and his team were able to export data from the existing programs to set up the data for the new single, integrated system.
Brendan and his team also helped out with improvements like:
- moving to cashless transactions
- utilising cloud technology, providing easy access to reports
- introducing Xero’s widely recognised, time-saving accounting software.
Ms Wilshire says, “We now have an effective and efficient way of invoicing, as the number of invoices generated by our organisation continues to grow.”
UNIQUE NEEDS OF THE NFP
NFPs operate under unique circumstances. In addition to the standard requirements of a typical Australian company (invoicing, payroll, tax submission), NFPs like STAR must meet significant community expectations. They also have extra reporting requirements to the Australian Charities and Not-for-profits Commission (ACNC), the national regulator of charities, and annual NDIS reports. Medium sized Australian NFPs are required to submit a financial report that is either reviewed or audited, with a financial statement.
With Brendan’s expertise in the NFP sector, Ms Wilshire says they were able to provide much-needed reassurance to the team at STAR.
“We need to do acquittals and report to the NDIS every year, report to the government. Having the assistance of Brendan with financial reporting is a massive advantage.”
Brendan and his team were quick to learn what STAR needed. “I was super-impressed by how involved they get,” says Ms Wilshire.
She also found them to be proactive in getting up to speed with new requirements. “When we have new reporting requirements Brendan ensures they get an expert opinion.”
Whereas previously the financial manager and treasurer were the same employee, now Brendan and his team can provide their collective expertise to accounting issues and some objectivity when reporting to the board.
TIPS FROM GENERAL MANAGER/ HELPING STAR TAKE ADVANTAGE OF NEW OPPORTUNITIES
“One huge advantage of our new system and working with Brendan is in our capacity to analyse data. In the past we did collect data, but had not really known what to do with it,” explains Ms Wilshire
“The new system generates really good data. Brendan and his team then analyse it to the nth degree.” The analysis enables STAR to develop a strategy for the organisation. Ms Wilshire adds, “We can make really good, informed decisions” for the future that are grounded in the data and based on a really good analysis.
ADVICE FOR NFPS OUTSOURCING ACCOUNTS
Based on STAR Community Services experience, Ms Wilshire recommends that other NFPs consider outsourced accounting services. If you are operating an NFP, weigh up outsourced services against the option of employing an in-house Financial Manager:
- Compare outsourced accounting costs to those of employing a financial manager.
- Consider also that you are restricting your organisation to that person’s knowledge and expertise, but with outsourcing you have access to the opinions and expertise of a team of people.
- Consider what it takes to keep an NFP financial manager up to date with changes to the strict reporting requirements. An accounting firm with relevant expertise can really help with these.
STAR AND BRENDAN’S PLANS FOR THE FUTURE
STAR’s goals for the next few years include:
- pursuing growth within the current financial model and seeking strong revenue streams in new areas, to be adaptable in a changing NFP environment
- valuing existing relationships and seeking new and mutually beneficial partnerships.
In practical terms, Ms Wilshire adds: “We are also looking at automating the payroll and working with Brendan on this.”
ABOUT BRENDAN LUCAS
Brendan works with a wide variety of small and medium businesses. His experience with business accounting allows his clients to focus on service delivery, safe in the knowledge that their decisions are backed up by easily accessible and up-to-date financial information and professional support.