The National Disability Insurance Scheme is slowly rolling out around the country over the next 4 years (untouched by the recent Federal Budget). We’ve been working with a group of organisations in NSW, helping them review the way they’re working, both in MYOB and with Calxa. Our aim has been to look at what information they need to collect and how they can report on it in the new funding environment.
The NDIS puts more control over spending in the hands of the people with disability, rather than the organisations providing them with care. For the organisations it means a change from block funding (and the associated acquittal process) to more a “fee for service” basis. It sounds simple but, as you can probably imagine, it can be more complex in practice.
What’s the main issue?
The important change that needs to take place is to ensure that your revenues cover your costs so that your organisation is sustainable in the long term. You need to make sure that what you are charging is more than what the service costs you to run. It can be complex to identify all the costs associated with service provision (and there are some complex spreadsheets around to calculate unit costs) but it’s worth bearing in mind that you want a solution where the cost of gathering the information doesn’t exceed the value of it.
What service are your providing?
The first question you need to ask is what you are providing to your clients. Is it something time-based, such as a session with a carer or physiotherapist? In that case you most likely will need to track costs and income on a per-client basis.
If you provide more group-based services (such as day care or holiday care) consider if it’s more appropriate to monitor costs for an activity, not per client. If you provide day outings, for example, that might include a trip to the movies (or the theatre or a park) and a meal, it’s likely you’ll have a number of carers on the trip and you won’t necessarily know in advance how many clients will choose the service.
What information do you need to collect?
Think about what services you’re providing and then set up your accounting system to enable you to manage costs and revenues for each of your activities – if you’re mainly doing one-on-one service provision, you’ll need to track costs and revenue by client. If you’re activity based (and many organisations provide a combination of services), track them by activity.
If you’re an MYOB user, create Jobs for each client or activity and Header Jobs where you need to group them. You can’t report at the Header Job level easily in MYOB but Calxa will simplify that part for you. Use Classes or Jobs in ReckonAccounts/QuickBooks and use Tracking Categories if you’re using Xero (though be aware that Xero doesn’t have a hierarchy of Tracking Categories so that can limit your reporting options).
We will return to this topic in coming months to discuss pricing issues and suggestions on best practices for reporting. The system is still a work in progress to some extent and we’re all learning the details as we go. If you have feedback or suggestions or questions, feel free to email Mick Devine, our CEO.