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  • Budgeting: Raharjo Apriyatmoko STIKES Ngudi Waluyo

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    KhumaeyraBundaSetiyaniWindrati
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    Financial management affects many aspects of an organization's operations including salaries, raises, staffing levels, and equipment availability. An operating budget includes costs like payroll, supplies, overhead, and revenue from sources such as private pay, insurance, grants, and other income. Important organizational decisions are often based on budget factors, such as a hospital closing its obstetrics unit due to limited revenues. While the budget is just a document, it is based on planning and decisions made within the organization. Responsibility for financial management falls to roles like the CEO, governing board, CFO, managers, and budget committee. Common types of budgeting include incremental/historical budgeting which builds on the previous year's expenses and income, and zero-

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    Financial management affects many aspects of an organization's operations including salaries, raises, staffing levels, and equipment availability. An operating budget includes costs like payroll, supplies, overhead, and revenue from sources such as private pay, insurance, grants, and other income. Important organizational decisions are often based on budget factors, such as a hospital closing its obstetrics unit due to limited revenues. While the budget is just a document, it is based on planning and decisions made within the organization. Responsibility for financial management falls to roles like the CEO, governing board, CFO, managers, and budget committee. Common types of budgeting include incremental/historical budgeting which builds on the previous year's expenses and income, and zero-

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    9 views7 pages

    Budgeting: Raharjo Apriyatmoko STIKES Ngudi Waluyo

    Uploaded by

    KhumaeyraBundaSetiyaniWindrati
    Financial management affects many aspects of an organization's operations including salaries, raises, staffing levels, and equipment availability. An operating budget includes costs like payroll, supplies, overhead, and revenue from sources such as private pay, insurance, grants, and other income. Important organizational decisions are often based on budget factors, such as a hospital closing its obstetrics unit due to limited revenues. While the budget is just a document, it is based on planning and decisions made within the organization. Responsibility for financial management falls to roles like the CEO, governing board, CFO, managers, and budget committee. Common types of budgeting include incremental/historical budgeting which builds on the previous year's expenses and income, and zero-

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    of 7

    BUDGETING

    Raharjo Apriyatmoko
    STIKES Ngudi Waluyo

    Importance of Financial
    Management

    Effect on
    peoples work

    The financial management


    of the organization affects
    many aspects of work : the
    salaries offered, the
    anticipated raises, the
    number of people available
    to do work and the quality
    and quantity of equipment

    or supplies available

    Componen of the operating budget :

    Costs (expenses)

    Payroll : salary, vacation, social security,


    education

    Supplies : office supplies, treatment supplies

    Overhead : building maintenance, water,


    electric

    Other : mortgage interest, loans, insurance

    Revenue (income)

    Patient sources : private pay, medicaid,


    medicare, other insurance

    Contributions : philanthropic, grants-in-aid,


    research

    Others : interest, rent, sale of equipment

    Examples of important organizational


    decisions based primary on budgeting
    factors

    A hospital with limited revenues (income) has


    decided to close its obtetrics unit
    A home health agency has chosen to serve
    only private-pay and medical client, because
    medicaid doesnt pay as much as it actually
    costs to make the visit
    Nursing home keeps staffing levels to
    minimum required by law in order to reduce
    costs and increase profits

    Importance of Financial
    Management

    Blaming the Budget

    The budget itself is just a document


    A collection of piece of paper with
    figures distributed according to a
    series of decisions made by certain
    people within organization

    Planning 3
    4
    4
    Roles, responsibility and authority

    Responsibility for financial


    management

    Chief Executive Officer


    Governing Board
    Chief fiscal officer
    Managers
    Budget committee

    Types of Budgeting1

    Incremental budgeting

    (historical budgeting) is traditional


    process in which budgets, divided into
    the components of operating budget
    Begins with an analysis of the income
    and expenses of the previous fiscal
    year

    Types of Budgeting2

    Zero-base Budgeting
    Is designed to require even more
    justification from each
    departement for any funds
    budgeted for the next year

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