Week 4 Class Discussion
Reply to the following using at least 175 words per response. Reply to post 1 and 2 separately. Be sure to use FULL APA references and in-text citations. Be professional and constructive in your response.
1. A good approach to budgeting is using an historical approach. Using the past to predict the future can add an element of reliability to the budget. However, one can’t simply depend on the past in isolation to develop the next year’s budget. Budget Tracking with Rolling Statistical Forecasts (https://fpa-trends.com/article/budget-tracking-rolling-statistical-forecasts) also provides a good approach for budget tracking as well.
Especially in the area of salaries you must make sure what you’re budgeting is consistent with projected need for the upcoming year. Some things to consider are:
Is there any projected growth in patient volume that might necessitate increased staff
Are there any wing expansions planned that will necessitate increased staff,
Are there any increased services being planned that will necessitate increase staff, etc.
How might a financial manager go about gathering information to ensure that budgeting takes into consideration the above factors? Are there other factors that should be considered in assessing whether there are growth needs in staff or salaries?
2. Sometimes it is difficult to keep the budget on the “planned course” and it is even harder to get the budget “back on course” should the financial compass take a detour. If budgets are like roadmaps then strategic plans could be viewed as our GPS. Investments like expanding services, adding equipment or adding space should all have been incorporated into strategic plans. Strategic plans help build the budget. And, the budget guides our operations (tactical) plans. Linking Budget to Strategy in Healthcare Organizations (https://www.clearpointstrategy.com/linking-budget-to-strategy-in-healthcare-organizations/) explores this concept.
know all of us are no doubt familiar with the GPS phrase “recalculating route”. The strategic plan is like a GPS system inasmuch as it can help us recalculate our routes should we get off course financially.
