Health Care Budget Essay

823 WordsMay 14, 20134 Pages
Health Care Budget Health care organizations should have a stable health care budget practices. Budgeting in any form of business could be the defining factor if the company will sink or swim. Efficient and effective financial management practices are the foundation for a prosperous health care organization. According to Healthcare Financial Management Association (2005), “Integration of financial management principles provides decision makers with guidance to make capital decisions maximize mission-based benefits at effective costs.” It is up to the organizations leaders to make wise investment decisions after extensive review of the company’s mission, vision, and purpose goals. An operating budget can be classified as a financial statement that includes the revenue and expenses for the whole organization. It is imperative that this document is accurate and completed annually. In this paper the financial practices that are most and least effective and the various budget techniques used when creating and monitoring an operating budget. Most Effective Financial Management Practices When creating and monitoring an operating budget it is imperative for an organization to have a financial management method that is effective from them to achieve their ultimate goal. The statement should reflect the revenue and expenses and include all the data for that reporting period that is considered pertinent to the organization. Along with the operating budget organization leaders should include the statement of cash flow, the statement of revenue and expense, and the balance sheet as back up credentials justifying the organizations financial practices. All of these reports are important for their individual purposes but serve a greater function when they make up the whole financial statement. According to Healthcare Financial Management Association (2005), “There are seven

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