for A plus writer only
nosyistypesif
week_4_hca_.docxPlanning for the future for a company is big, and many precautions have to be taken to make sure that the investment or the capital investment is not a total failure. Budgeting can vary from organization to organization. Some might have a very strict process, which can only go only one way. Some other organizations can have a loose process. Each process has to be geared towards the organization that’s making this investment. When opening a new department or even extending it , the number of procedures that will be estimated as well as the number of patients that will be coming through the door. The two main budgeting titles would be operating budget and capital budget. Operating budget has to deal with expenses and revenue; this budget process takes about four months. The capital budget deals with the balance sheet, and looks more closely on with purchased items with borrowed money.
A look below gives us a closer look in the process
Operating Budget
July 1 Department service projection meetings
July 15 Finance proposes pricing and revenues
August 15 Finance evaluation of department projections
August 31 Department review of revenue and volume
September 15 Board of directors budget targets (operating margin, other aims) September 30 Expense budget for fixed expenses (and capital expenses)
September 30 Budget target for variable expenses
October 15 Board of directors review/approval
October 31 Distribution of budget to departments
July 1 Funds available for capital presented to departments
July 1 Distribute capital request forms
July 15 Capital request forms due August 1 Senior management review and prioritize list
August 31 Financial management drafts financial analysis for selected projects September 15 Board of directors capital committee reviews presentations and approves selected projects and allocates funds (Smith, 2014)
My first argument I would use is volume forecast for my presentation, this is beginning for any budgeting and planning. Patients are the reason to keep any medical facility a float. Without an audience of different patients for different departments then expanding or moving forward with a capital investment would be pointless. Managers can use data from previous years and use the growth from keeping up with the patient flow, evaluating the competitors around the area, as well as keeping up with clinical and medial advances.
My second argument I would use is the future value. The future value uses two key factors in my opinion when it comes to making an investment. The first factor is the money that will be used to invest, the company can already have that money ready to go, or the company will have to borrow the money like getting a loan. The second factor of course is interest, how much will the company will earn on the investment, or how much interest the company will have to pay whether it’s a long term loan or short term loan.
Lastly I would talk about the risk and returns, which is the main concern for any organization. Obviously you can not account for all expenses that might come up, but as long as we can cover our debts in a timely manner and the patient inflow is rising like it is every month we should be more than fine. The risk we are taking should nothing compared to the reward, which is a brand new rooms with state of the art equipment as well as new doctors that can bring their patients they originally was working with.
References
Smith, D.G. (2014). Introduction to Healthcare Financial Management; San Diego, CA; Bridgepoint Education, Inc.
