Building a cash bridge

Building a cash bridge

“When you build a bridge, you insist it can carry 30,000 pounds, but you only drive 10,000 pound trucks across it” – Warren Buffett

All organisations need cash to live, breathe and operate on a daily basis. Cash is very much like oxygen, not really a big deal until you don’t have any and then it’s a really big deal, really quickly. Furthermore it doesn’t matter how healthy you are, if you’re without air for a short period, you’re in trouble.

Organisations are exactly the same. An organisation can be extremely prosperous for many years but become unstuck if they are left without the required cash to meet their commitments for even a short period of time. How long will employees be willing to work without pay? How long will suppliers continue to provide their services on credit?

It’s a scary thought, but cash flow risk can largely be mitigated by building a strong reserve. All shortfalls in cash must financed. They can be financed through financiers such as banks, your suppliers offering credit, or your own cash reserves/savings.

Cash reserves are the safest, easiest and most reliable safe guard against cash flow issues.

To state the obvious, cash is an asset that your organisation owns, an asset that you control and, most importantly, an asset that doesn’t need approval from a third party (such as a bank) to access.

So how much cash should your organisation put aside? This is a difficult question and will largely depend on management’s risk tolerance and the perceived risks that your organisation may face in the future. For example, risks such as your cash-flow cycle, income model (ie block funding in advance or individualised payments in arrears) and competitor landscape should all be considered when evaluating risk. Understanding the kind of financial or cash flow risks you are facing will help you to identify the level of reserve needed to protect your organisation.

An organisation with management that are not overly risk averse and not overly concerned about any perceived future risk, may not believe that they need large cash reserves. Conversely an organisation that is worried about the future risk they may face, may choose to build large cash reserves.

As a general rule at least three months of all expenses should held in cash in reserve. Ideally six months will be held, and 12 months plus is, of course, a much more conservative approach. When evaluating how much cash to hold in reserve it is also important to consider the timing associated with risks. For example if your organisation has a risk of losing funding but will be given a minimum of three months’ notice, then this should be factored in.

The rationale here is, if no income at all came in – not a single dollar – how long would you need to operate to get yourself back on track or at minimum payout all your obligations to staff and third parties? However if the likelihood of you losing all your income at once is low, you should reflect this when setting your reserves level.

As outlined above, a number of factors need to be considered and analysed. When considering these factors, an independent qualified adviser will be able to help you navigate your options relative to your risk exposure, and ensure that you calculate the appropriate amount of cash reserves for your organisation.

To find out how CBB can assist, please get in touch with Dimitri:

 

Dimitri Matsouliadis
Business Consultant
Email: dmatsouliadis@cbb.com.au
Phone: 1300 763 505


When leadership is an impossible job

Impossible leadership

As a Brit living and working in Australia, I’ve been reflecting on the mess that is Brexit, and, in the wake of Theresa May’s resignation as British Prime Minister, what it tells us about leadership, and the impossible job. Leadership – given its embeddedness in individual and organisational psychology – is a complex topic. There have been millions of words written about it, some based on sophisticated studies, and some of which are probably nonsense. What follows are my personal reflections and observations based on a 25 year career of working with leaders, and being in leadership positions myself. Central to the meaning of ‘leadership’ is that it requires followers. I’m not a fan of the term ‘followers’ because it implies subservience – definitely not something I want from the people I work with. However, leadership does require a team. You can’t lead in a vacuum, or without vision. These are the two key features that have been lacking in the last three years of the British Prime Ministership, making leadership a near impossible job for Mrs May.

  1. Leadership rests on shared vision

Rule #1 of leadership: develop a vision – or at least some common goals and objectives – that your team can commit to. With significant divisions within the UK Conservative party regarding the shape Brexit should take, Mrs May has been unable to build consensus within her own team. The same weekend that Mrs May resigned, I read articles about the Australian Federal election, and the anti-vaxxer movement. Both cited research showing that, when presented with evidence that contradicts their opinions, people hold on to their existing opinion more strongly. Our human tendency to look for evidence that validates – rather than challenges – our viewpoints, coupled with social media’s propensity to present more of what we like, means most of us live in an echo-chamber with inadequate perspective on the broader world. More dangerously, we heavily criticise politicians for changing their standing on an issue, making them reluctant to actually listen to evidence and shift their position. One British political commentator, Peter Oborne (who was a Brexiteer) has publically changed his stance on Brexit and urged others to do the same. Although his story has been widely shared, it’s had little impact. Instead, positions have become more entrenched and more polarised, and the behaviours more vicious. Little space is left for negotiation or compromise, and there’s scant hope of creating a shared vision across the ‘team’ responsible for delivering Brexit.

Shared vision depends on diversity and a healthy culture

We hope that, in our professional lives, we operate with a more open mindset, with the capacity to take on board new evidence, and alternative perspectives. This is why diversity in teams – of experience, perspectives and thinking styles – is so important. Challenging and testing assumptions is critical to busting groupthink and building a robust, shared vision that everyone can get behind. But to build a consensus, you need a safe environment for constructive challenge and considered debate. It’s pretty difficult to have honest face to face discussions if everyone’s watching their back and waiting for the next manoeuvre. Which brings us to point two…

  1. Leadership requires team support

Leaders are only as good as their teams. Team support is vital to getting the work done, in thinking through challenges, in creating new opportunities, in innovating improvements. You can’t do it alone, and you certainly can’t do it if your team are fighting and undermining you (and each other) all the time. This has clearly been another major challenge for the UK Prime Minister. It’s not necessarily a bad thing to have people in your team that want your job (and who have the competence or potential to do it). They can stretch you as a leader and build a pipeline for succession. What’s not good is having people that are openly hostile and trying to unseat you. Exit Mrs Theresa May, British PM.

Build a stronger team with clear behavioural expectations.

While we would hope for better behaviours in the workplace, people’s professionalism can’t always be assumed. A behaviours framework that sets explicit and objective expectations of workplace behaviour – towards each other, clients and stakeholders – is useful here. Formalising a behaviours framework gives you criteria against which you can recruit and select new employees, and manage those whose behaviours undermine the integrity and values of your organisation.

Support for Leadership

Whilst we hope that the febrile environment of national politics is not played out in not for profits across Australia, organisation cultures – and organisation leaders – do need to be nurtured and cared for to keep them healthy. You can read more about how to avoid a toxic workplace here.

If you have concerns about the culture in your organisation, or you’re a leader that needs a bit of external support, get in touch with Jane:


Jane Arnott
General Manager, Consulting and Business Services
Email: jarnott@cbb.com.au
Phone: 1300 284 364


Quality, Safety and the NDIS worker

New NDIS Worker ScreeningQuality, Safety and the NDIS worker

As of 1 July the NDIS Commission is introducing a national NDIS worker screening database. The database will keep records of any person who has applied for an NDIS Worker Screening Check. Providers will have access to a limited set of information about an employee to ensure the person is cleared to work with people with disabilities.  Workers will be able to provide supports in any state or territory. The database will not provide information about the person’s criminal history and details relating to the outcome of the screening application.

Workers and other personnel that start in a role that needs a clearance after 1 July 2019 will need to apply for a new NDIS Worker Screening Check. The Commission will release information on how to apply soon. We have no information about the costs involved. Workers in SA and NSW who meet the current state disability worker screening requirements can continue to work until their state-based check expires. The rules for the transition in other states and territories are expected to be similar but have not been published yet. Additional state and territory specific requirements such as Working With Children Checks are still mandatory.

Who needs a check?

From 1 July all personnel of registered providers (except for WA) will need a check if they are in a risked assessed role including:

  • key personnel (including board members, senior executives, manager, team leaders)
  • roles for which the normal duties include the direct delivery of specified supports or specified services to a person with disability
  • roles for which the normal duties are likely to require more than incidental contact with people with disability, including volunteers and subcontractors.

What is more than incidental contact?

If a role requires the worker to physically touch the person with disability or if the worker is building a rapport with the person with a disability as a part of the performance of the duties, the contact is considered to be more than incidental. Contact includes physical contact, face-to-face meetings and oral, written and electronic communication. If the interaction requires just polite and no functional contact with the customer, it is considered incidental. For example, an accountant who is working in the building but may greet a customer in passing in the hallway will not require clearance.

Tips for record keeping

Registered providers must assess all roles and identify each role that is a risk assessed role. Engaging workers in risk assessed roles without appropriate clearance could breach NDIS registration conditions.

Providers need to maintain a list of risk assessed roles including job title, the description of the role and why the role is risk assessed, the date the role was assessed and who made the assessment. Registered providers are also required to maintain a written list of all personnel who engage in risk assessed roles and keep it up to date. The list must specify the full name, date of birth and address of the person, the risk assessed role, the screening check application/check number, and the check outcome expiry date. Section 18 of the NDIS (Practice Standards-Worker Screening) Rules 2018 also specifies requirements for record keeping on suspensions or exclusions. Section 19 outlines records that must be kept for other personnel that is not directly employed by the registered NDIS provider.

How to avoid delays?

Experience has shown that new systems can bring hiccups and delays. If you are planning to hire new staff members or if your key personnel have not undergone the necessary checks, you may want to apply for state based clearance as soon as possible.

In SA, workers in a risk assessed role must have a valid clearance for

  • SA disability services employment screening (obtained in the last three years) or
  • SA child related employment screening (obtained in the last three years).

The child-related employment check in SA will also change to new Working with Children Checks in July. The list of acceptable checks in SA can be found here.    

A registered provider may temporarily allow a person to engage in a risk assessed role if the person is in the process of obtaining clearance, if the person is appropriately supervised by a person with clearance, if the provider is implementing a risk management plan and if not prohibited by state law.

Safety as a point of difference

Office workers or cleaning personnel without client contact do not require clearance. Secondary school students doing work experience are also exempt, if supervised appropriately. Providers may still want to ask all personnel for clearance, however this is up to each organisation to decide.  

At this stage workers who work for unregistered providers are not required to undergo screening checks. This is an important point of difference for registered providers and worth mentioning to your clients.

New Worker Orientation Tool

The NDIS Commission has launched the on-line training tool ‘Quality, Safety and You’. The worker orientation module is for NDIS workers to understand their roles and responsibilities under the NDIS Code of Conduct. The training is mandatory for workers and personnel who are employed or otherwise engaged by registered NDIS providers including key personnel, volunteers and contractors and subcontractors.

The module is divided into four modules and can be paused and continued at any time. The training takes over 90 minutes and provides sections for reflection and questions to check on learning.  Each person undergoing the training has to register separately to receive a Certificate of Completion at the end.

How to implement orientation training in your organisation?

Providers must include the training in their induction program and ensure that each new staff member completes the module. Existing staff can complete the training over time, however it is important to establish a learning program and plan to ensure everyone will complete the training. Do staff have access to computers, can they complete the training during working hours or will they need to complete it at home? Auditors will look for evidence that the training is scheduled and in progress and that completion is recorded.  Modules specific for group training are not available, however providers can use the tool to run groups training sessions and allow extra time for group discussions and feedback. Worker who attend a group session will not receive an individual Certificate of Completion. The completion of training can be evidenced with a signed and witnessed attendance sheet or a declaration of completion.  The training will give workers a good understanding of the obligations of the NDIS Code of Conduct and help staff to act accordingly.

Keeping people with disability safe and well is the duty of every disability provider and worker. 

For questions or comments please contact CBB’s Business Consultant Dr Ellen Schuler.

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NDIS consultant


Dr Ellen Schuler
Business Consultant 
Email: eschuler@cbb.com.au
Phone: 1300 763 505


ILC Ready – Free help for grant success

Community Business Bureau is proud to launch ILC Ready. 

ILC Ready follows the successful NDIS Transition program we ran in 2017-18 to help organisations respond to the opportunities and challenges of the NDIS.  CBB supported them by providing targeted support and coaching as they transitioned from block funding to individual customers.

The focus of ILC Ready is on Information, Linkages and Capacity Building (ILC) grants to support the inclusion of people with disabilities in their communities.  The learning from the program will include idea creation, outcomes models, project planning and grant writing, so these skills can be transferred to other areas of your work.

This is a free, fully funded program that will provide support on developing grant proposals to community organisations across South Australia.  Register your interest here.

ILC Ready will consist of 3 stages:

  1. Webinars

In July and August we’ll be running a series of webinars that will explain about the federal government’s ILC grants program for community and disability organisations

  1. Regional workshops

We’ll also be running a one day workshop in six locations across South Australia, throughout August. The workshops will help you to develop your ideas and plans for projects that could be funded under ILC or other community grant funding programs.

  1. One to one support for 20 organisations across South Australia

South Australian organisations can apply for a program of one to one support through workshops and coaching with our consultants, to help you plan your project in detail and prepare a funding application.

If you have any questions about the program please email ilc@cbb.com.au or phone 1300 763 505, or view the frequently asked questions.

Sign up and we’ll keep you in touch with program news, important dates and deadlines.

CBB has been commissioned by South Australia’s Department of Human Services through its NDIA Community Inclusion and Capacity Development Grant to provide support to South Australian organisations for ILC readiness, focusing on skills and knowledge development.


Jane Arnott
General Manager, Consulting and Business Services
Email: jarnott@cbb.com.au
Phone: 1300 284 364


Market orientation: Why it matters for your community

With more organisations moving their core business to consumer directed funding models such as NDIS and My Aged Care, change is in the air – for providers and their clients and beneficiaries. For the first time, clients hold the purse-strings – and with them, the chance to exercise true choice and control over the services they receive. For the first time, individuals – not the government
– are the customer.

For a customer-driven market to thrive, there must be sufficient choice available from a range of providers, offering services that fulfil genuine community needs in a way that’s sustainable, ethical, and generates positive social impact.

Continue reading…


Should you diversify your income?

We’ve all heard of the expression – don’t put all your eggs in one basket. It’s a valid expression with merit. If you earn all your income from just one source and that goes away, then it’s highly likely that your organisation will go away too. So does that mean you should diversify your income? Not necessarily.

Before we jump into whether or not you should diversify the income of your organisation, we should cover what diversification of income is.

Income can be diversified in two ways

1 Different providers of the income

These are the actual people and organisations who hand over their money to your organisation. The two extremes here would be one customer vs thousands of customers. It worth noting that we are talking about people and organisations that provide income to your organisation and as such this includes grants and donations. Another way to look at this may be one annual grant vs 20 annual grants.

Continue reading…


Communications – do it once, do it right

People aren’t perfect, mistakes happen and that can affect your bottom line directly (in the cost of fixing the mistake) or indirectly, by affecting your organisation’s reputation.  So it’s important to have a system in place to eliminate errors.

“Fast is fine, but accuracy is everything.”

Wyatt Earp

Setting up a quality assurance and compliance system need not be an arduous task. When operational, the system allows your organisation to operate more efficiently, creating better results and allows you to focus on delivering better outcomes for your community, rather than re-doing work.

Continue reading…