Get NDIS Ready!
Where prices paid for a specific service or activity are set by a central authority - like the National Disability Insurance Agency (NDIA) or NSW's Ageing, Disability and Home Care (ADHC) - the key for service providers is knowing they can deliver that service or activity at a cost lower than the price they receive.
If these costs are not recovered from clients, the organisation becomes unsustainable.
Tracking the costs of our activities is simple with Calxa. Eliminating spreadsheets has given us quicker,
more reliable reports and better decision-making.
Importance of Unit Costing
What is Unit Costing?
Unit Costing is about understanding the costs of each individual service or activity your organisation provides. It is something equally important to many businesses in the manufacturing or even retail industries.
In simple terms; It’s the total cost of the service divided by the number of services provided.
Not-for-Profit organisation use unit costing to determine their activity or service cost and compare this to the set service prices provided by the National Disability Insurance Agency (NDIA). Ideally different pricing models are compared in a scenario building exercise to determine the final unit price.
Why do Unit Costing?
To ensure your organisation’s sustainability in the long-term, it is imperative to understand how the cost of your services compare to the price you receive for them.
Unit costs are vital in the transition from block funding to Consumer Directed Care (CDC) and the National Disability Insurance Scheme (NDIS). They are becoming an integral part of some tendering processes providing valuable supportive evidence.
In some instances they are required to satisfy grant providers.
Who needs Unit Costing?
Ideally, everyone should be doing it. It’s an important part of calculating the viability of the services provided. Disability and Aged Care service providers are at the forefront of some the changes in the Not-for-Profit sector using unit costing to manage the change.
If your funding provider isn’t asking for unit cost information yet, now is the time to prepare, get your systems in order and gather the information you need.
Then you’ll be ready and stress-free when you have to deliver.