Budget Managment
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Budget Management Analysis
A budget is instrument that assist supervisors to ensure availability of required resources and that those resources are used effectively as the business moves toward success of its goals. The budgets are established annually and are based upon the previous year’s budget and variances. This paper will describe a development of operating budget, comparisons expenses results with budget expectations, description of possible reasons for variances and strategies to keep results aligned with expectations, recommendation some benchmarking techniques that may improve budget accuracy.
The operating budget gives huge overview of the organization’s earnings and expense that usually covers a period of one year (Finkler, Kovner, & Jones, 2007). Every health care organization appoints someone to submit proposed budget plan to the budget analysis professional for review. The goal is to have key players actively involved in the formation and development of the operating budgets (Finkler, Kovner, & Jones, 2007). It is also imperative to have a full support from financial department throughout the budget process development. When every single proposed budget plan is collected it is responsibility of the executive management of the organization to make final decision on a budget before it gets submitted to the board for approval. It is extremely difficult for unit managers to start collecting necessary information for the development of operating budget. They usually require enormous amount of reports, clues, and data to review, which are usually generated by the organization’s environmental analysis and by its structure of solid goals, objectives, rules, organization wide assumptions, program priorities, and specific measurable objectives (Finkler, Kovner, & Jones, 2007). The environmental analysis gives managers better understanding of what the organization needs and what is the primary goal that the organization is trying to accomplish.
A budget is instrument that assist supervisors to ensure availability of required resources and that those resources are used effectively as the business moves toward success of its goals. The budgets are established annually and are based upon the previous year’s budget and variances. This paper will describe a development of operating budget, comparisons expenses results with budget expectations, description of possible reasons for variances and strategies to keep results aligned with expectations, recommendation some benchmarking techniques that may improve budget accuracy.
The operating budget gives huge overview of the organization’s earnings and expense that usually covers a period of one year (Finkler, Kovner, & Jones, 2007). Every health care organization appoints someone to submit proposed budget plan to the budget analysis professional for review. The goal is to have key players actively involved in the formation and development of the operating budgets (Finkler, Kovner, & Jones, 2007). It is also imperative to have a full support from financial department throughout the budget process development. When every single proposed budget plan is collected it is responsibility of the executive management of the organization to make final decision on a budget before it gets submitted to the board for approval. It is extremely difficult for unit managers to start collecting necessary information for the development of operating budget. They usually require enormous amount of reports, clues, and data to review, which are usually generated by the organization’s environmental analysis and by its structure of solid goals, objectives, rules, organization wide assumptions, program priorities, and specific measurable objectives (Finkler, Kovner, & Jones, 2007). The environmental analysis gives managers better understanding of what the organization needs and what is the primary goal that the organization is trying to accomplish.