Residential Aged Care Accounting Services
What is your experience in this business area?
Ascendia Accountants Mooloolaba, Noosa and Brisbane provide General Purpose Accounting services including preparation of statutory accounts for ASIC reporting for large Residential Aged Care Providers. In addition Ascendia provides tax accountants advisory, tax estimate and planning services for this type of business.
David Barlow, one of the principals of Ascendia Accountants (Maroochydore) has, prior to commencing in his own firm with Ascendia Group, many years experience as the senior accountant supporting Brian Dohrman a founding owner of the Regis Group. The Regis Group is a large Residential Aged Care provider. In David's experience working for Brian, he has acted as the accountant on many residential aged care operations, preparing their accounts and budgets. David provided principal professional accountancy support to Brian from the start of the Regis Group, providing support and service through the development and building up of the group over a 10-year period until 2007.
David enjoys and brings a wealth of experience and knows how to providing tax, public accounting and financial management & reporting services to proprietors and operators of Residential Aged Care Facilities in Australia.
What are the business issues facing this area?
It is our opinion that there are significant challenges and opportunities in the Residential Aged Care sector.
We see a major challenge being the need - resulting from the changes to asset testing for residential aged care residents by the Commonwealth Government in June 2013 - for businesses and operators (profit or not for profit) to find new sources of capital funding over time.
There are various reports available on the implications of these Government Fiscal changes for organisations in this industry (by the various peak industry groups and a very useful report produced by KPMG on the topic in 2012). I refer and recommend readers to searching and reading these various analyses if you have not already. The need to source alternative or non-traditional sources of capital is expected to grow steadily over the next 10 years.
Ascendia believes that residents will gradually remove capital deposits from the sector in response to the new price signals generated by successive Governments' budgetary needs to reduce the amount of public capital invested in residential aged care infrastructure.
In the new fiscal environment we believe sources of capital other than residents will be seriously limited unless residential aged care facilities operate in line with private sector investment requirements.
Are there specific services that are required by Aged Care providers?
Ascendia services that are most important to residential aged care operators is the Chief Financial Officer Support services. These are services that assist and ensure your business is operating with best practice financial management processes and outcomes.
To allow a residential aged care operation to deliver best practice services to residents, we believe it is a prerequisite that the Financial Management of Residential Aged Care operations will need to deliver:
- Timely and accurate reporting of P&L, Balance Sheet, Cash Flow, and Management Budgets (variance to KPI's) to Australian Accounting Services & Standards and
- Financial decision making which delivers best practice financial benchmarks
We also believe that new sources of capital will be required by residential aged care operators to:
- Maintain capital expenditure for ongoing operations (maintenance)
- Replenish the balance sheet as accommodation bonds are paid out net (as predicted by KPMG report analysing the effects of the Government changes), and
- Obtain new capital levels to enable expansion of existing operations and investment in new operations - to be able to sustain delivery competitively priced services over the longer term.
Best practice financial management and financial reporting go hand in hand with obtaining these new and needed sources of capital.
The demographic changes in Australia, and the resulting growth in demand for aged care services and to a certain extent residential aged care services, is obviously a significant growth opportunity that some operators will be able to meet with increased services.