Key concepts and Definitions:
Financial management: is defined as "a series of activities designed to allocate resources and plan for the efficient operation of the organization". The overall goal of financial management is to meet the total financial needs of the organization. Budgeting: is the planning function of financial management. The budget translates operational plans into monetary terms. Budget: is defined as "a written financial plan aimed at controlling the allocation of resources"
Or "a statement of expected expenses and revenues over a specific period of time".
Expenses: are defined as "the costs or prices of activities undertaken in the organization's operations". Revenues: are defined as "income or amounts owed for purchased services or goods".
Strategic/ operational planning
Programs & dayto-day plans Provision of services/operatio n plans Delivery of services
Managerial planning Strategic/ financial plans
Figure: Position of budgeting in the managerial and strategic planning Nursing Division Budgeting 1
Importance of budget:
It is important to be used to: a. Manage the organizational programs. b. Plan for goal accomplishment. c. Control costs.
Factors influencing Budget planning:
Any alteration in one or more from the following factors requires reviewing, modifying or even changing the budget. These factors are: Internal and external economic environment, as well as financial means. Changing demands of the clients and/or providers. availability of human resources. Capacity of the organization (as opening a new, or closing a working unit). Service costs/market price. Organizational goals and strategic directions. Plans and objectives of one or more department(s).
Preparation of the Nursing Budget: (Budgeting Process)
Generating and controlling a divisional budget is a major responsibility of the nurse executive. The budget is a major operating...