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In order to prosecute the general principles outlined in Finkler, Calabrese, and Smith’s (2022) foundational text on financial management for public, health, and not-for-profit institutions, the paper explains how to construct an operating budget suitable for a Health Care Organization. BHA FPX 4008 Assessment 1 research concern is formulated to enable the development of a sound financial strategy that can serve to ply resources natively within the context of healthcare service delivery systems. This type of research only employs information that is retrieved from historical records of financial retainers, cost analysis, and hypothesis of expenses. A more rigorous approach adopted in the paper to complete the balance of budget decision elements is to highlight potential services that systematically need changes, usually find profitable revenue sources, and distribute the money.
The study once again brings into focus the importance of timely prudent spending analysis and financial projections that will help to manage the funds effectively and highlight goals and objectives. Also, it highlights the aspect that focuses on the patient as the primary concern of the healthcare provider, although, at the same time, they have to ensure the need to improve functions (Finkler et al. 2022). However, this paper emphasizes the financial planning of care services in institutions where factors are most influential and reveals its importance in providing good care services sustainably, taking guidelines by Finkler on how the buyers’ authors have made critical decisions and use of resources.
BHA FPX 4008 Assessment 1 Developing an Operating Budget
This paper aims to discuss the strategies of operations budget design in the framework of healthcare organizations from the standpoint of (Finkler et al. 2022). The significant ideas are only partially addressed chiefly in terms of the rationale for the existence of a properly functional financial department for a healthcare organization with solid, reasonable, and sensible general revenues and expenditure forecasts, focus on patient care or organization functioning, and the role of well thought-out and effective financial management in the healthcare organization’s mission accomplishment, and its sound financial viability. Thus, the arrangement of the stages based on ideas is proposed here, and this paper aims at helping healthcare organizations address the issues of budget decision-making and resource management.
Why Budgets Are Important
BHA FPX 4008 Assessment 1 budgeting is also critical in the planning process of medical organizations since it matches available funds with the overall strategic objectives to give direction. As confined by Finkler, Calabrese, and Smith (2022), budgets are valued for their control, decision-making, and performance functions. First of all, budgets act as a framework in the case of financial flow sorting, which is the process of deciding on the allocation of resources in an organization between departments, programs, and projects. On the other hand, a healthcare organization may equally use a particular part of its money to purchase new complementary medical equipment for the improvement of patient care services. Budgets serve an essential role in the planning process of health organizations as the indicator of resources, expenditures, and accounts with the stakeholders. Regarding this point, it is possible to underline that with the help of the application of budgetary principles, which are described in the guidelines of the professional literature, the management of the financial systems of those healthcare entities that have strategic goals will be better, which leads to the achievement of positive results.
Difference between Operating, Project, & Capital Budget
Operating Budget
BHA FPX 4008 Assessment 1 operating budget entails specifics of the cost and revenues that are required to determine the running of a healthcare organization within a given period, for instance, one fiscal year (Zelman et al., 2019). We are within the budge parameters, which include staff wages, stock, utility bills, rent, and other operational costs, and we are implementing the activities of the health care center. A routine operation budget of a healthcare organization can include payments for medical personnel’s wages, the purchasing of medications, renting premises, and administration expenses, as Zelman et al. (2019 describe. The budgets are simply the blueprint of performance as they outline the direction that is to be adopted toward the organization’s financial status and guarantee every decision toward effective operations.
BHA FPX 4008 Assessment 1 Project Budget
While the project budget is brought with its concentrates on the financial requirements of particular projects executed by an organization in the healthcare field, the program budget typically is much more concerned with the entire cost of the whole program or scheme (Finkler et al., 2022). Thus, unlike business operations budgets, project budgets are not term and project-designated kinds of budgets. They comprise projects that may include various sectors of healthcare delivery other than EHR system implementation, construction of new healthcare facilities, or research projects. The following composition of a project plan creates the budget that shows the costs for the project activities that are expected to be incurred, including but not limited to the cost of equipment, personnel, training of the staff that belongs to the project team, and all other expenses that are associated with the project.
Capital Budget
Capital budgets are more about appropriating funds to procure assets that will provide benefits for more than five years, including building equipment and technology. Yet, while they are not the same as operating budgets, they inform budgets that are oriented toward day-to-day operations, and capital budgets are oriented toward regular, strategic spending used to make the organization more efficient (Gapenski and Pink 2021).
Provide Correct Revenue & Expenses
BHA FPX 4008 Assessment 1 financial situation of the healthcare organization is quite outstanding, as the total expenses of the current year show a 5% shrinkage. It is now to set the actuals for the current year’s expenditures, that critical point in time. When such an analysis is performed, an awakened knowledge of the financial health of the organization and the rationale is obtained regarding the economic scenario. This can be realized by using accurate account data to control and adjust expenses, hence enhancing the ability to better plan for the upcoming periods with more accuracy. What this modification does as well is that the implication resulting from such maneuver is not only that the profits may have the opportunity of becoming more than it was before, but also that the firm’s action is also showing that it is entirely in compliance with certain principles as well as well positioned in a specific direction following the applicable stance of Finkler, Calabrese, and Smith (2022).
Besides, it triggers the process of reconsideration and, ultimately, the reassessment of work models; therefore, the organization attempts to create savings that do not involve the expense of care to the patients. Although this has demonstrated signs of hope in terms of the expenditure that would be made to areas that should be accorded investment, such as technology redesigning and employee competency enhancement, the message that was conveyed was one of caution so that the service need would not be compromised. By providing objective findings and, therefore, working at suggested actions with a lower overall cost, a professional assessment forms a rational approach to basic, pivotal choices in the face of a financial scenario. Thus, the organization has all the rights to perform actions that will ensure the continued production of a productive and efficient healthcare system.
Estimate the Correct Revenue & Expenses
Forecasting the revenues and the expenses and, finally, whether there are going to be profits or losses for the forthcoming financial year is a challenging process that needs to be done with due precautions gone through strategic planning and financial planning as advocated by Finkler, Calabrese, and Smith (2022). BHA FPX 4008 Assessment 1 Historical analysis of market data and market research information will be helpful to the corporation in predicting future revenues with an accurate outlook for focused operations on new profitable opportunities and market changes. Another concern that needs to be considered is the historical reference of costs, which they should go forward in search of cost control strategies because this may prepare the organization to handle the increases in expenses effectively.
Balancing revenues or losses realized through the use of the organization gives the central factor that defines both the financial stability of the organization and the efficiency of the operations; the result is aimed at linking the use of the resource with the direction of the strategy and the management of risks. Also, the overall analysis and recommendations create a rational decision-making framework and effective communication with other stakeholders, thus guaranteeing their trust and confidence in institutional financial variety. The use of a proactive and realistic financial strategy incompetence allows the organization not only to respond to turbulence and a number of opportunities but also to chase steady further development and achievement of long-term goals in the highly volatile healthcare market.
Impact of the Budget on the Operations of the Organization
A budgetary analysis of operations identifies that financial decisions contribute to the outcomes of the operations, as mentioned by Finkler, Calabrese, and Smith (2022). The placement of the funds as described in the budget can significantly impact the number of staff members to be hired, whether there will be investment made in infrastructure or not, and which strategic programs will have to be undertaken. They can also ensure patient care delivery and the formation of clinical staff by providing budgetary facilities that suit their strategic maps. Finally, the budget has a high level of openness and transparency. BHA FPX 4008 Assessment 1 financial stability among the stakeholders is enhanced. That is precisely what the rather complex nature of the healthcare environment demands to solve this problem. Budgeting optimization, strategic positioning, performance measurement and control, budget engagement, and annual budgets and rolling forecasts are some of the examples where the following recommendations put forward in the literature should apply. These strategies build a favorable environment in which financial problems are transforming into a thing of the past, operations are going to be enhanced, and sustainability is comprehensible even within the context of the ongoing changes in the sphere of healthcare.
Conclusion
BHA FPX 4008 Assessment 1 overall theme that is evident throughout Finkler, Calabrese, and Smith’s (2022) paper can be considered as the central concept of the practice of management and pivotal for financial management in the public, health, and non-profit sectors should incorporate valid principles and effective practices. In order to respond to the need for this information, the authors, through its contents, which also explain the ways of budgeting, financial analysis, revenue generation, and expenditure controls the public, health, and non-profit firms, the authors share complete information in relation to this area. The paper harmonizes some of the advanced theoretical approaches in strategy with concrete examples easily understandable by readers to make them appreciate the importance of financial planning as far as the achievement of organizational goals and strategic presentation of fiscals is concerned. It is now trying its best to contend for decisions that can be termed as mission-prescribed more than profit-driven.
References
Altamimi, H., & Liu, Q. (2021). Nonprofit and Voluntary Sector Quarterly, 51(6), 089976402110574. https://doi.org/10.1177/08997640211057404
Calabrese, T. D., & Smith, D. L. (2022, June 21). Www.elgaronline.com; Edward Elgar Publishing. https://www.elgaronline.com/edcollchap/book/9781800375697/book-part-9781800375697-44.xml
Maku, R. (2022). Neural network algorithm for budget expenditure prediction in LPP RRI Gorontalo. Journal La Multiapp, 3(2), 61–67. https://doi.org/10.37899/journallamultiapp.v3i2.596
Stühlinger, S. (2022). The importance of planning: How financial management competencies affect the performance of nonprofit organizations. Public Administration Quarterly, 46(3), 211–237. https://doi.org/10.37808/paq.46.3.2