NDIS Business Owners: Are rostering decisions affecting your margins?
Introduction
This video explains how NDIS businesses can manage wages more effectively to reduce costs and protect profit margins. It focuses on setting up a P&L that separates support worker and admin costs, and further distinguishes between recoverable and non-recoverable support worker costs under the SCHADS Award. By tracking specific wage categories such as broken shift allowances, overtime, top-up hours, and client cancellations, businesses can identify rostering issues and analyze trends in their payroll. Regular analysis helps managers understand where costs may be impacting margins and how better rostering practices can control non-recoverable expenses, ultimately improving financial oversight and operational efficiency.
Key Takeaways
- Organize your P&L to separate support worker and admin costs.
- Further divide support worker costs into recoverable and non-recoverable categories under the SCHADS Award.
- Track specific pay categories such as broken shift allowances, overtime, top-up hours, and client cancellations.
- Analyze your P&L monthly to identify rostering issues and cost trends.
- Non-recoverable wage costs cannot be completely eliminated but can be controlled and monitored.
- Adjusting payroll and rostering practices can help reduce margin loss in your NDIS business.
Transcript
Introduction and Tip for NDIS Businesses
I have a tip for NDIS businesses to help you save money. As we know, in the NDIS at the moment, people are saying that there's like a 2% margin between what they make in sales and what they spend on wages and on-costs. So it's important that you're organizing your wages so you can analyze them and see if there are any areas where you can reduce your wage costs. One way to do that is by how you set up your P&L.
Setting Up the P&L Between Support Workers and Admin
I see it very commonly that people set up the P&L between support workers and admin, and I think that's really good. Separate things like staff hours and meetings between support workers and admin staff. If your support workers have a training session or something like that, you can put that in admin as well. But I want you to then separate support worker costs between recoverable costs and non-recoverable costs. By that, I mean some of the wages you pay under the SCHADS Award can be claimed through NDIS, and some cannot. The ones you can't claim come down to rostering practices. If you analyze it every month, you'll start to see whether your rostering and practices are passing on those costs or not.
Understanding SCHADS Award Costs
When I talk about the SCHADS Award, I mean things like broken shift allowances, fortnightly overtime, any penalty your staff member might receive because they haven't had enough of a break between two shifts, any top-up hours—so any hour we've given them for free because they didn't get enough of a shift—and even client cancellations. If you go through your payroll system and find these pay categories, you can assign them to your non-recoverable costs in your P&L.
Analyzing P&L and Identifying Rostering Issues
If you start analyzing your P&L this way every month, you'll start to see a trend. If it's getting higher, you know you have a rostering issue, and you can go back to your rostering system to work it out. Usually, this cost won't be completely nil, but it is something you can control and monitor. Once you start to understand it, you can see whether some of the margin you're losing in your business may actually be leading to a loss. That margin can be controlled by good rostering practices.
Recommendation
Try that out: upgrade your P&L and get your payroll system pointing to two different expense items for wages instead of just one. See if that makes a difference to your NDIS business. Thanks very much.