Abstract
In BHA FPX 4008 Assessment 1 Developing an Operating Budget To follow the fundamentals of Finkler, Calabrese, and Smith’s (2022) iconic work on finance management for public, health, and not-for-profit institutions, the paper illustrates the process of building an operating budget that meets healthcare organization-specific needs. The research concern is formulated to create a strong financial plan that can have the desired impact of allocating resources natively within the complex healthcare service delivery system. This research uses data from a diverse array of sources, including historical financial retainers, cost analyses, and expense hypotheses. The paper uncovers effective revenue streams, allocates money, and predicts possible service need changes as budget decision factors through systematic analysis. The study re-emphasizes the need for regular prudent financial planning and forecasting which ensures efficient utilization of funds as well as marking strategic goals and objectives. Also, it emphasizes the fact that healthcare providers must make patient care the major priority but at the same time, they must see the need to optimize operations (Finkler et al 2022). In this paper, the significance of financial planning in health care institutions’ contributions to the delivery of good care services while ensuring financial sustainability is brought to the fore, buyers the authors’ guidelines in coming up with key decisions and use of resources have been provided by Finkler.
Developing an Operating Budget
Financial management in public, health, and charitable organizations, as Finkler, Calabrese, and Smith argued, is crucial for successful resource allocation and sustainability of an organization. This paper explores operations budget design for healthcare organizations incorporating key principles foundations of (Finkler et al. 2022). The major ideas are discussed mainly covering the need for financial planning when robust, proper revenue and expense forecasting, prioritization of patient care or operations and the role of financial management in fulfilling its mission while at the same time ensuring financial sustainability. Hereby, an arrangement of the stages grounded on ideas is suggested, and this paper seeks to aid healthcare organizations in dealing with budget decision-making and resource management complexities.
Why Budgets Are Important
The setting of budgets is essential in the planning process of medical organizations, as it aligns available financial resources with strategic goals. According to Finkler, Calabrese, and Smith (2022), budgets are treasured for their role in financial control, decision-making, and performance evaluation. For the start, budgets work as a guideline for financial flow sorting, which determines the distribution of resources between departments, programs, and projects. On the other hand, a healthcare organization may equally apply a particular part of its money to buy new medical equipment for the enhancement of patient care. Budgets are vital in the planning system of health organizations by allowing resource allocation, expenditure control, and information exchange with stakeholders. Through implementing budgetary principles as discussed in the professional literature, healthcare entities can improve financial management systems and the achievement of their strategic objectives.
Difference between Operating, Project, & Capital Budget
Operating Budget:
An operating budget includes details of the expenses and revenue forecasts needed for the continuous operations of a healthcare organization within a particular period, for example over one fiscal year (Zelman et al., 2019). We within budget constraints considering staff salaries, inventory, utilities bills, rent and other functional expenses running daily endeavors of the healthcare center. A routine operation budget of healthcare organization covers, for example, salaries for medical staff, buying of drugs, rent for facilities, and administration costs as mentioned by Zelman, et al. (2019). The budgets are just the pace-setter for performance as they lay the plan for the organization’s financial status and ensure that every decision will be set up towards ensuring operational efficiency.
BHA FPX 4008 Assessment 1 Developing an Operating Budget
Project Budget:
While a project budget has its concentrates on the financial needs of specific projects implemented by an organization in health care, a program budget normally focuses on the overall expenditure of a whole program or initiative (Finkler et al., 2022). In contrast to business operations budgets, project budgets are not long-term and project-specified types. These projects can cover different areas except electronic health records system installation, construction of new healthcare facilities, or research initiatives. A project plan usually consists of the expected costs for the project activities, such as purchasing equipment, staffing, training of the staff of the project, and other expenses that are related to the project.
Capital Budget:
Capital budgets refer mainly to the distribution of funds on fixed assets that have benefits in five years and beyond including buildings, equipment, and technology infrastructure. However, capital budgets differ from operating budgets, which focus more on the day-by-day expenses, and routine, capital budgets focus on the strategic investments that will help make the organization more effective (Gapenski and Pink 2021). An example in this regard would be the spending on new medical equipment (for instance MRI) or the renovation of existing hospitals (to address overcrowding) to deliver better patient health care. From the words of capital budgets usually are a large pool of money and have to carefully calculate return on investment to determine if it aligns with corporate purpose and curation.
Provide Correct Revenue & Expenses
The healthcare organization is in a remarkable financial position as it sees a decrease of 5% in expenses for the current year. That vital moment now is in setting the actuals for the current year’s expenditures. Upon doing so, the financial scenario is assessed and an awakened knowledge of the organizational financial health and the rationale is achieved. This can be realized by utilizing real accounts data for adjusting expenses and thus enabling the fine- tuning of financial planning with a greater level of precision and foresight. What this modification does as well is not only that the profits may have the opportunity to become greater than they were before, but also that it serves as a demonstration that the firm is compliant with principles as well as is poised in a direction following the stance of Finkler, Calabrese, and Smith (2022). In addition, it initiates the re-evaluation and reassessment of existing work models and consequently, the organization strives to devise savings without lowering care to the patients. While the decrease in costs shows prospects for investment into essential areas like technology renovations and staff skills training, it also emphasizes the need for prudence so that the services required remain uninterrupted. Through evidence-based recommendations and cost-effective solutions, a thorough evaluation creates an informed culture of fundamental decisions in facing a financial environment. As a result, the organization is empowered to take the necessary steps aimed at maintaining its commitment to effective healthcare delivery read more assessment.
Estimate the Correct Revenue & Expenses
Estimating the revenues, expenses, and finally whether you made profits or losses for the coming fiscal year is an arduous task that demands to be done with strategic foresight and financial acumen as championed by the team of Finkler, Calabrese, and Smith (2022). Through historical data and market research insight, the corporation can forecast revenue streams with an accurate focus on emerging opportunities and market shifts. It is also imperative that the historical expense patterns should be looked into, and they should go ahead seeking cost containment measures in advance because this can help the organization to be prepared in advance and deal with the escalation of expenses promptly. The net incomes or expenses that are derived from the input of the organization create the critical indicator of the organization´s financial soundness as well as operational efficiency, which is meant to correlate the output of the resource with the priorities of its strategy and the management of risks. Moreover, the overall analysis provides the basis for an informed decision-making process and promotion of a transparent dialogue with other stakeholders that in turn ensures the trust and confidence in institutional financial variety. The adoption of a preemptive and strategic financial planning ineptitude positions the organization to not only navigate uncertainties and capitalize on several opportunities but also for pursue of sustained long-term growth and success in the highly dynamic healthcare industry.
Impact of the Budget on the Operations of the Organization
A budget analysis of operations discovers that the financial decisions directly influence the results of the operations, which also as Finkler, Calabrese, and Smith (2022) indicated. The placement of funds spelled out in the budget can greatly affect the number of staff members, whether infrastructure investment is made or not, and what strategic programs will be implemented. They can also improve patient care delivery and clinical staff formation through budgetary allowances designed to fit their strategic goals. In addition, openness and transparency of the budget create a high level of trust in the stakeholders as well as financial stability. The complexity of the healthcare landscape requires exactly these for solving this problem. The following recommendations in the literature should therefore apply to budgetary optimization, strategic alignment, performance monitoring, flexibility, and continuous improvement as some of the examples. These strategies construct a scenery in which financial challenges are becoming outdated, operations will be improved and sustainability makes sense even in the ever-changing healthcare environment.
Conclusion
The main idea that runs throughout Finkler, Calabrese, and Smith’s (2022) paper is the key to the practice of management in finance in public, health, and non-profit sectors that should entail sound financial principles and practices. Through its content which highlights how budgeting, financial analysis, revenue generation, and expenditure controls can be implemented respectively to public, health, and non-profit firms, the authors provide complete information in this regard. The paper integrates strategic theoretical models with a range of practical examples that help readers visualize the significance of strategic financial management in the way of achieving organizational goals and at the same time present fiscal responsibility. It is doing its best to promote financial decisions that may be considered mission-driven rather than only for financial purposes. Transparency and accountability are also highlighted as well as an adaptive approach to changing regulatory and economic environment. Overall, this paper can be considered a useful guide for all those financial managers and organizational leaders who seek to be successful in their financial management tasks in such industries as public, health, or not-for-profit sectors within the context of the current business environment.
References
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