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    FIXED COSTS Expenses that remain the same for the budget period regardless of the activity level of the organization direct costs Necessary expenditures that do not affect the patient directly direct CENTER generates revenues and manage costs so that the department shows a profit REVENUE CENTER area within an organization that generates revenue TYPES: OPERATING budget CAPITAL budget EXPENSE budget APPROACHES: INCR

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    FIXED COSTS Expenses that remain the same for the budget period regardless of the activity level of the organization direct costs Necessary expenditures that do not affect the patient directly direct CENTER generates revenues and manage costs so that the department shows a profit REVENUE CENTER area within an organization that generates revenue TYPES: OPERATING budget CAPITAL budget EXPENSE budget APPROACHES: INCR

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    45 views19 pages

    Budgeting

    Uploaded by

    meanne073
    FIXED COSTS Expenses that remain the same for the budget period regardless of the activity level of the organization direct costs Necessary expenditures that do not affect the patient directly direct CENTER generates revenues and manage costs so that the department shows a profit REVENUE CENTER area within an organization that generates revenue TYPES: OPERATING budget CAPITAL budget EXPENSE budget APPROACHES: INCR

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    of 19

    FIXED COSTS VARIABLE COSTS INDIRECT COSTS DIRECT COSTS

    FIXED COSTS
    Expenses that remain the same for the budget period regardless of the activity level of the organization

    VARIABLE COSTS
    Expenses that depend on and change in direct proportion to patient volume and acuity

    DIRECT COSTS
    Expenses that directly affect the patient

    INDIRECT COSTS Necessary expenditures that do not affect patient directly

    The area within an organization for which costs are accumulated


    PROFIT CENTER Generates revenues and manage costs so that the department shows a profit REVENUE CENTER area within an organization that generates revenue

    TYPES: OPERATING BUDGET CAPITAL BUDGET EXPENSE BUDGET APPROACHES: INCREMENTALBUDGET ZERO BASED BUDGET

    This approach assumes the base for projecting next years budget is zero.

    Approach to resource allocation that simply adds an additional percentage or amount onto the prior years budget.

    Operating Budgets based on the daily operations of a business. Capital Budgets plan for acquisition of long term investments. Expense Budgets - i.e. Manpower Budget

    - MANPOWER BUDGET
    1. Know the average daily census and occupancy rate 2. Determine the hours of placement time per individual 3. Then determine the FTE requirement

    present value of cash inflows is at least equal to the present value of the cash outflows.

    PLANNING:
    THINK AHEAD ESTABLISH GOALS COMMUNICATE GOALS FORECAST THE FUTURE COORDINATE PLAN ANTICIPATE CHANGES EXAMINE ALTERNATIVES

    CONTROLLING:
    KEEP ACTUAL RESULTS CLOSE TO THE PLAN MOTIVATE EMPLOYEES EVALUATE PERFORMANCE OF STAFFS AND UNITS ALERT ORGANIZATION TO MAJOR VARIANCES TAKE CORRECTIVE ACTION PROVIDE FEEDBACK FOR FUTURE PLANNING

    Carruth A.., Carruth P., & Noto E. (2000). Financial management. Nurse managers flex their budgetary might. Nurse Manager 31 (2): pp16-17. Finkler, S. A., Kovner, C. T.,& Jones, C.B. (2007). Financial management for nurse managers and executives (3rd ed.). Philadelphia: WB Saunders. Sullivan, E. J., & Decker, P. J. (2005). Effective leadership and Management in nursing (6th ed.). New Jersey: Pearson Education, Inc. Whelchel, C. (2004). Executive exchange. Patients first when budgeting. Nurse Manager 35(3): 16.

    JIMUEL AURELIO AND MARY ANN GARCIA

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