Cashflow Issues of NDIS Providers

The National Disability Insurance Scheme (NDIS) provides funding to participants for support and services aimed at increasing their independence, inclusion, and social and economic participation.

The NDIS was created to ensure people with a disability have “choice and control” over the support they receive but the sad reality is the pricing model of NDIS doesn’t allow for services to be provided to the same level they were under State funding.

If service providers don’t adapt to the new system, they won’t survive. Disability support services in NSW, like in most other States, have been predominantly provided by not-for-profit, purpose-driven organisations. It is logical that “for purpose” organisations deliver those services as it is about the individual and the provision of appropriate care and support, not about making money.

But the rules of the NDIS are more prescriptive than the previous system and do not reflect the realities of delivering a service. The pricing model is designed to ensure NDIS scheme viability rather than delivering the support required by participants.

Under our analysis, we concluded that NDIS providers do receive less money for their services and would have to increase their administrative structure, redesign the service delivery and focus on cash flow.

It is very important for NDIS providers to have a proper system in place to monitor cash flow.

Cash flow monitoring will be done through:

  1. Implementing accounting and workflow-based CRM applications specialised for NDIS
  2. Streamline the NDIS claiming process by automating the claiming process using workflow-based CRM applications
  3. A thorough review of support provided against approved funding
  4. Improve timeliness and accuracy in claims to support working capital

All these will result in increased Cash Flows leading to the Financial Stability of the organisation and supporting future growth.

Unfortunately, there are also a few organisations that still believe that the NDIS problems will be fixed and that the pricing model will change. Our view is that relying on the Federal Government to fix the funding of NDIS is a high-risk strategy. Change may come but it will be years away and the question organisations need to ask is do they have enough cash to survive until it is fixed?

The NDIS is undoubtedly one of the largest social policy initiatives ever undertaken in Australia but for not-for-profit disability providers in an NDIS world, the reality is stark — diversify to survive.

If you are still facing cash flow issues for your NDIS business, kindly get in touch with us today.