Budget management analysis is used by Chief Executive Officers, (CEO’s), and managers to assist them in determining whether or not the resources at hand are being used efficiently. An organizations budget is most generally yearly or quarterly and may be based on a financial committee’s decision. Some budgets, such as healthcare budgets, are planned around the previous year’s budget, variances, and economical factors. No matter how sound a budget is, there will be variances due to situations such as lack of nursing staff and use of nursing agency staff can create huge variances in a budget. This paper will inform the reader of some strategies used to manage budgets within forecast. It will inform the reader of five comparisons of expense results with budget expectations. The paper will inform the reader of some reasons for variances, strategies to use that may enable results to equal expectations, and lastly, three benchmark techniques.
A budget is important to any organization because it, for lack of a better term, is the financial blueprint of the organization. Every organization must have a budget to help guide cost and improve on financial areas that are weaker than others. Financial planning takes form as a budget. Most budgets are yearly based and necessary to meet a company’s goals. One strategy to manage budgets within forecast is strategic planning. Several techniques can be used in the attempt to maintain accurate budget adherence. The first strategy is to ensure that the budget is aligned with the strategy of the organization, (Nayeb, 2011). This allows management to identify the priorities of the organization and identify if the goals of the organization are being supported. The second strategy is to boost the correctness of forecasting and planning. Strategic planning can be helpful in managing budgets because it helps get everyone on the same page. A mission statement that explains why the company exists and what plans need to be carried out in...
References: Evans, Matt. "Excellence in Finance Managment." . N.p., n.d. Web. 26 Nov 2012.
Nayeb, N.. "Forecasting vs. Budgeting: What 's the Difference." Bright Hub. N.p., 08 2011. Web. 26 Nov 2012.
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