NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget Preparation and Management of an Operating Budget

Financial management applies to every establishment irrespective of ownership or size. The objectives of a company or group might not be accomplished if the firm fails in the management of its accounts. As a result, managing finances is vital for the fiscal safety of an institution, in this case, a healthcare establishment. The person accountable for the management of finances is the nurse leader whereby, preparing and managing operating budgets is a skill required for the nurse in charge. An operating budget signifies the estimations, the revenue of the hospital plus the expenses that are sustained through a specific period (Dichev, I. 2017).

NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget

In this case, the provision contains 35 beds encompassing 20 permanent salaried workers, insurance, administrative expenses, emergency operations, repairs, responder safety, and healthcare systems maintenance among additional outlays. The income and revenues of this operating budget comprise overall patient takings, government donations, payments, out-of-pocket payments, and other direct payments. Consequently, the hospital’s groundwork for the operating budget is founded on the proceeds and expenses of the infirmary (Dichev, I. 2017). The preparations and management of an operating budget encompass an intricate system with several staff.

By definition, “a budget is a proposal or diagram used by managers to ensure that quality and cost-effective services are provided to patients” (Danna, 2016). Just like earlier mentioned, the person accountable is a nurse manager who oversees operations such as; clinical and quality fallout measures, supplies par stock unit, patient and workers satisfaction, staffing and training, human resource management, and departmental operations. The hospital in question has been losing workers and the existing ones have been working overtime to cover all the required shifts not to forget that the institution deals with elderly patients who are precisely aged 60 and above. As a result, the operating budget plan will take in inner and outward aspects, communal and work value matters to discourse employment issues in the unit. In general, the core objective will be developing a strategy to recognize noteworthy budget segments that will impact staff self-confidence and retention while holding costs and expenses without deterring patient and personnel safety.

Regrettably, the present healthcare trends encourage nurse administrators to accomplish more using fewer resources. However, a budget is intended to accomplish the following missions: 1) calculate the necessary resources to offer first-class care; 2) organize a strategy to yield the financial aims of a unit; 3) deliver a planned proposal of the department’s financial objectives and action idea to accomplish them (Rundino, 2020). The operating budget is dedicated to the regular running of departments and unit details of services offered, costs sustained, income produced, and forecasting resources and undertakings.

Preparation of an Operating budget

Just as stated earlier, the operating budget is inclusive of the year’s revenue and expenditures. The budget also acts as a tool for fixing targets as well as making adjustments in case the market conditions vary. In addition, the budget assists in making decisions such as making employee additions for the management to conclude on essentials needed before the hospital opens another year and estimate the expected profits. The initial step is to prepare a basis for the budget rendering to the available or expected funds, thus, the objectives of the budget procedure have been recognized. Factors that influence hospital operations at this level consist of socioeconomic aspects, inside aspects such as management, plus the inclinations in the division (Dichev, I. 2017). The next step is creating a cost buffer whose foremost intention is scrutinizing the costs. Assessment of the costs is usually grave in controlling the aspects that impact the costing course through the primary phase of budgeting. In this stage, the hospital’s compensation plans have already been revised. Any budget revisions done are founded on the latest hospital developments, which also include employees’ salaries and compensations, the present hospital capacity as well as the hiring of new staff.

The third stage involves preparing the revenue and expenditure funds. Revenues specify the hospital’s proceeds whereas expenditures include the overheads the hospital incurs through its maneuvers. Practically, establishments must not use more than the firm can make. The hospital’s incomes are very important in funding the expenses (Maduekwe & Kamala, 2016). The fourth and last stage is incorporating the department’s budgets. Each and every division in a hospital possesses its budgets, which are coordinated to provide the hospital’s all-inclusive budget. Coordination of the budgets is essential in arriving at the concluding budget for an establishment. Hence, the institution works by certifying that the working budget is arranged in reference to the coordinated budget, which incorporates the departmental financial plans.

Another item is bonuses that are also merged in the budgets together with provisions for capital expenses, a step needed so that the group can realize its aims. Variations to the financial plan are then done rendering to the example and evaluations are similarly done, which can be assessed to integrate several variations needed to establish a budget (Yao, Li, and Yun, 2022). Last but not least the team needs to come up with budgetary controls, which are needed to compare the estimated budget and the actual budget. The budgetary controls are also made to certify that the accurate resources are calculated and the working of the budget can be appraised in the long run (Maduekwe & Kamala, 2016). The hospital’s budgeting procedure has adhered to strict steps, which are crucial in displaying the source of the revenue and the way the money will be disbursed in the infirmary. Below is the 35-bed capacity hospital budget needed for the financial management and performance of the hospital setting for one month.