Budget management analysis is commonly used by mangers as a tool helping to make sure that all resources in existence get put to use correctly. The budgets are determined annually because they are determined by the preceding year’s budget and differences. Budgets can be controlled by specific techniques to control budgets within prediction, consider five to seven expense results with budget anticipations, explain possible factors that cause fluctuations, present ways to keep results associated with goals, share three benchmarking strategies, and consider the ones that could increase budget accuracy, and give good reason for the choices made. (Finkler, 2007) Several techniques are often used to regulate budgets; managers as well as the …show more content…
Differences could be within the budget that could be beneficial, or over the budget which can be. The difference is used as a tool to calculate the budget for upcoming years, help to reduce spending within the present year, and assist in evaluating the managers and their agencies. To specify the source of fluctuations the managers are required to investigate and justify to top management the reason why the difference occurred. There are numerous reasons behind fluctuations, which have to be recognized and maintained if possible. (Finkler, 2007) While calculating the nursing expense results from different units for a pay period, there have been some favorable and unfavorable fluctuations. While examining the expense record the paid original hour’s difference was within the budget and the paid nonproductive hour’s difference was 60 hours over the predicted time period. The unexpected difference of paid nonproductive time period could have happened as a result of some employees being on adapted duty, sick leave, conference time, or training time, which means that they are primarily getting paid with no patient care needed. The overtime percentage of hour’s difference was 7 .5% over the budget and the registry percentage of hour’s difference was 8 .0% over the budget, both of these are unfavorable. The overtime could have been the result of bad time management strategies, late arrival of the following shift, or working past shift hours as a result of a low
Budget management analysis is used by mangers as a tool and helps determine that all resources available are being used efficiently. The budgets are determined yearly and are based upon the previous year’s budget and variances. This paper will discuss specific strategies to manage budgets within forecast, compare five to seven expense results with budget expectations, describe possible reasons for variances, give strategies to keep results aligned with expectations, recommend three benchmarking techniques, and identify those that might improve budget accuracy, and justify the choices made.
For example interest rates, the cost of raw materials including fuel, the number of sales or orders that we make and in turn all of these rely on other factors. The best therefore that can be done when developing a budget is to look at all the factors that are likely to affect the budget and decide how to take account of each one. If there is a previous budget (last year or last month) then it is sensible to look at how this has been achieved or not as the case may be, and what factors affected the outcome. If we are looking at monthly budgets it might be a better comparison to look at the same month twelve months ago as well as the previous months. The more factors we take into consideration when estimating a budget, the more accurate our budget will be.
15. What are your thoughts of the importance of understanding the per patient day (PPD)
This research paper is a brief discussion of budget management analysis. Budgeting is the key to financial management, and is the key to translates an organization goals or plan into money. Budgeting is a rough estimate of how much a company will need to get their work done, and provides the basis for evaluating performance, a source of motivation, coordinating business activities, a tool for management communication and instructions to employees. Without a budget an organization would be like a driver, driving blinded without instructions or any sense of direction, that’s how important a budget is to every organization and individual likewise (Clark, 2005).
Within any formal institution or business, there tends to be a person or group that provides oversight of budgeting expenditures. Each year, there is a projected budgeting forecast that encapsulates every departments anticipated budget. Unfortunately, poor planning and lack of appropriate estimating can be the demise of any business, especially that of a public service facility such as a jail or prison. Carlson and Garrett (2008) explained that the budgeting process is explained in three phases: budget development, budget execution, and budget oversight. Since every dollar counts to ensure that the needs of the public, as well as, that of the inmates are met, it is important to have method of locating discrepancies. An organization does
When you write the paper, please don’t use a excel spreadsheet, only use analysis of the data in Microsoft word sheet. I mean explain everything in words. Thanks!
A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496) The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred.
ABSTRACT: This case1 provides an opportunity to study budgets, budget variances, and performance evaluation at several levels. As a purely mechanical problem, the case asks for calculations of various price, efficiency, spending, and volume variances from a set of budgets and actual results. The case is also an interpretive exercise. After the variances have been computed, the next step is to develop plausible conjectures about their likely causes. Finally, it is a case about performance evaluation and responsibility accounting. The company has an incentive plan, based on the budget
The central challenge that budget developers encounter is predicting what the future holds for the internal business and external factors. Reading the future is something that can never be done with perfect precision. The fast pace of technological change, the complexities of global competition and world events make developing effective budgets both more difficult and more important.
“Finance should be a fundamental nursing administration content area to meet the growing need for nurse managers with core competencies in financial and budget management” (Finkler, Kovner, & Jones, 2007, p. 476). Health care organizations depend on nurse managers to budget the finances of his or her department appropriately. Budget management analysis includes evaluation of departmental and organizational financial concerns to include forecasting, benchmarking, and cost variance. The purpose of this paper is to determine specific strategies to manage budgets within
In April 2016, the Newfoundland and Labrador government announced a provincial budget, an economic plan that proposed to allow Newfoundland and Labrador to regain control of government finances (Government of Newfoundland and Labrador, 2016a). The purpose of this paper is to discuss the impact that a specific budget decision has on the determinants of health of the residents of Newfoundland and Labrador. This paper will specifically discuss the budget decision to eliminate twenty-four hour snow clearing in Newfoundland and Labrador. In particular, it will discuss the impact that the elimination of twenty-four hour snow clearing will have on the
Most entities and organization create budgets as a guide for controlling its spending, prediction of profit, and it expenditure as they progress toward a set goal. Budget involves pulling resources together to achieve a specific goal. According to Gapenski (2006), budgeting is an offshoot in a planning process. A basic managerial accounting tool use in holding planning and control functions together is referred to as set of budgets (p. 255). One major setback manager or budget developer encounter is trying to design a future, a process that cannot be created with the precision just right. This article highlights some financial management
making any necessary adjustments to the budget during the budget period.(BIRT et al. 2014, pp 407)
Budgeting is crucial in the well-being of a company especially the financial health status of a company. In fact, no professionally managed firm would fail to budget, since the budget establishes what is authorized, how to plan for purchasing contracts and hiring, and indicates how much financing is needed to support planned activity. It is routine for a company to budget for its expenses. Expense budgets act as a guideline of how much revenue a company would require keeping the activities running. It is used to set the company’s targets for a certain period.
Budgetary control is part of overall organisation control and is concerned primarily with the control of performance. The use of budgetary control in performance management has of late taken on greater importance especially as a more integrative control mechanism for the organisation. Discuss.