Budgeting for an NDIS Provider Business: Tips and Strategies
You became an NDIS support provider to enhance the quality of life of people with disabilities. Your goal was — and still is — to provide empathetic, person-centric services that improve each client’s health, wellbeing and agency.
But NDIS providers are also businesses, which means you need to find ways to improve your profit margins, protect your financial resilience and grow your NDIS agency.
Fortunately, better profit margins don’t have to come at the expense of quality disability supports. In fact, the two can go hand in hand.
The NDIS Budget Squeeze
Fewer than half of the NDIS providers in Australia made a profit in 2022. The majority of NDIS businesses either broke even or operated at a loss.
NDIS agencies have long struggled with profitability. In the latest NDS State of the Disability Sector report, agency owners report that NDIS funding often doesn’t reflect the difficulty of providing certain supports. Nearly six in ten businesses worry that they won’t be able to provide NDIS services at current prices.
Exacerbating this situation, an Australia-wide labour and skills shortage is forcing many NDIS businesses to either compete on pay rates or turn away NDIS participants who are requesting services.
But although this paints a bleak picture, NDIS providers can run financially profitable businesses while continuing to operate within the SCHADS award and NDIS pricing limits. With a strategic approach, you’ll be able to reduce costs, spot areas for growth and improve your business’ financial health.
Analyse Your Finances
You cannot effectively plan for growth without a thorough understanding of your current finances. Take the time to analyse your costs, the profit margins for different services and the return on investment of your tools. (If this sounds challenging, check the features of your NDIS software. You might be able to auto-generate financial reports.)
When analysing your finances, look for:
Areas with high costs and/or low incomes; how can you improve these?
Areas that currently have a good return on investment; how can you replicate these?
Areas that are more expensive or less profitable now than six months ago; what’s changed?
When you can better understand your finances, you can make decisions based on improving your financial resilience. You’ll also be able to develop a realistic plan for achieving your business goals.
Create a Financial Strategy
A financial strategy is beneficial for every business, but especially for NDIS providers who typically struggle with low profit margins.
Having done your financial analysis, you’re in a good position to build a strong financial plan. Make sure to set your objectives and goals for the short, medium and long term. Decide which areas of your business you wish to focus on to achieve them, e.g. further investing in your profitable services and supports or improving efficiencies. Finally, try to develop realistic projections.
Reduce Admin Costs by Automating
There’s a lot of admin work that goes into running an NDIS business. But by automating elements of NDIS plan management and service delivery, you’ll be able to reduce your labour costs. You’ll also free up valuable time that you can spend on tasks with a better return on investment, such as training team members to provide better supports.
Technology can speed up processes such as rostering, NDIS claims, client communications and more. Accounting integration will also help providers spend less time on paperwork and more time on disability support management.
Build Efficient Rosters
There’s no denying that NDIS rostering is complex. The numerous factors to consider include NDIS participants’ support needs, locations, staff availability and more. Add to this client preferences, and your approach to rostering can end up being “how do I keep everyone happy?” rather than “how do I build a roster that works for my business?”
Optimising your roster, however, will help you keep per-participant costs low while also improving staff satisfaction rates. You’ll be able to reduce travel costs and tackle burnout while ensuring that participants receive the services they’re entitled to. Use your rostering software to ensure your rosters are as efficient as possible.
Improve Your Invoicing
Filing NDIS payment requests is a fiddly and bureaucratic process. It’s easy to make mistakes or spend a painful amount of time uploading multiple invoice files. Streamlining your invoicing process, however, will ensure you get paid on time while also freeing up extra hours.
Make sure your invoicing, time-tracking and expenses systems are either on the same platform or integrate seamlessly. This will help you avoid errors, and in turn, make sure that your NDIS claims aren’t rejected. Selecting invoicing and rostering software with NDIS integrations will also help ensure you have the correct NDIS line numbers for each item.
Budgeting Made Simpler
NDIS budgeting can be challenging. The labour market is competitive, NDIS pricing limits are restrictive and profit margins are low. But the right strategies will help you operate more efficiently, reduce costs and plan for growth.
Better budgeting isn’t just about finances, either. It will also help NDIS providers focus on the things that really matter. When your finances are strong, you can provide better-quality supports that empower people with disabilities to be active members of the community, have a good quality of life and improve their health and wellbeing.
ShiftCare’s NDIS software is built around the needs of NDIS providers and NDIS participants alike. It will help you through every stage of providing disability supports, from NDIS plan management to rostering and billing. Accounting integrations, financial reports and per-client expenses make budgeting simple. Plus, our customers report reducing the time they spend on admin tasks by up to 90%.
Discover how the right tools can help your NDIS business grow. Try ShiftCare for free.