We’ve been working with a small group of organisations in the Sydney area who are either involved in the NDIS rollout now or soon will be. It’s been inspiring to see the preparation that they’ve been doing and a pleasure to work with such progressive people.
When the initial request came from the NSW government to assist with this pilot study we only had a vague idea of what the transition to the NDIS would mean for service providers in the disability sector. Six months on and it’s apparent that no-one has all the answers but the big lesson is that those who are prepared will be the ones to survive and thrive.
The NDIS means a switch away from block funding to a system where ultimately the person with disabilities (or their family) controls the funds and how they are spent. And they may spend them with you or they may choose to spend them elsewhere.
We won’t debate the pros and cons of this change now but rather focus on how some people have worked ahead to manage the change.
First and foremost it’s important to have systems that deliver you the information you need to make decisions. Do you know the cost of each of the services and activities you provide? Can you clearly articulate what services you provide? Understanding this will help you decide how to structure your accounting system to capture the costs and then report on them.
For some services it’s clear that the service is one-on-one for each client. The client becomes the main unit that you need to report on – you need to know what costs are associated with each one and then what income you receive. Other organisations provide group services such as outings or day care. In this case focus on tracking the costs for each type of activity, estimate the costs and set your price accordingly. Then track the income and expenses, monitoring them on a regular basis.
Having this information enables an organisation to make decisions not just on the pricing of services, but on whether or not to actually offer them. With a system like the NDIS there isn’t the same scope for cross-subsidisation between high-cost and low-cost services as there was with a bulk funding arrangement. The NDIA have published a report helping out with the calculation of some “reasonable cost models“.
The key to success is to have the right information to make decisions. We’re glad to see that our customers are mostly well-equipped for the change.
To help those customers coming up to this challenge, we will be developing a series of help notes to assist. If you’re in the disability sector (or any sector facing similar changes) feel free to call us, we’re happy to share what we know.