Preparing and Managing an Operating Budget

Preparing and Managing an Operational Budget Student's Name Institution Course Professor's Name Date Preparing and Managing an Operational Budget Introduction The process of formulating and managing an operational budget necessitates an extensive design that involves several individuals. Arnold and Artz (2019) define a budget as a strategic plan used by administrators to ensure the provision of high-quality and cost-effective services to patients. Budgeting is a crucial method that companies utilize to manage and control their finances (Luft & Shield). A challenging component of budgeting is its tendency to fulfill many objectives within the organization concurrently. According to Arnold and Artz (2019), In numerous companies, budgets are utilized both for planning purposes, such as projecting operational activities, and for performance evaluation purposes, such as determining bonus payouts. We have faced numerous issues due to the frequent turnover of staff members, which has resulted in increased overtime expenses for our current workforce. Inefficient resource allocation and a demotivated team have been major issues. The company's lead nursing manager produced an operational budget to assess all areas of the healthcare unit, focusing on staff and patient expenses and any other significant charges. Any organization needs extensive planning and operational budget review to succeed. Figure 1: Budget for Villa Health Hospital. Process of Budget Design Establish Organizational Goals Objectives are the desired outcomes that organizations aim to attain within a specific timeframe. Nurse managers have comprehensive knowledge of hospital operations and are mostly chosen to oversee the development and administration of hospital budgets. Villa Health takes great satisfaction in providing highly efficient healthcare services to its patients, ensuring both immediate and long-term benefits. The organization seeks to deliver healthcare services that efficiently meet the customers' requests through the utilization of highly competent and trained personnel. The organization is aware of the patient count and the age range, which predominantly consists of elderly individuals. Based on this information, it can evaluate and ascertain the specific medical supplies needed and the level of healthcare necessary for each patient. Similar to young children, older adults have a significant reliance on the staff and experience fluctuations in their physical fragility, ranging from extreme frailty to a lesser degree of frailty (Rezaei-Shahsavarloo et al., 2021). The budget faces considerable strain, especially when meeting the healthcare needs of older individuals, who, similar to children, necessitate more extensive medical treatment. Plan and Anticipate Costs and Revenues. Budgeting and keeping costs within the same budget are still important financial strategies. The primary expenses of the organization include staff salaries and the cost of medical supplies (Zhang & Bohlen, 2023). The main source of revenue is the services provided to patients and the markup on the medical supplies utilized. The objective of this is to initially assess the organization's sustainability by determining its ability to control expenses and maintain ongoing operations. Evaluation of this is conducted by examining and predicting the actions of the company based on its records. Villa Health is unable to accurately predict the quantity of medical consumables that will be required for the patients. Additionally, the patient's medical recovery is subjective and can vary from being frail to extremely frail, resulting in shifting medical needs and associated revenues. Managing and evaluating the medical sulplies, as well as the food and drinks provided for patients and personnel is challenging, especially when it comes to monitoring patient and staff counts (Tian, 2023). Each nurse manager must assign a staff member to oversee the medical consumables throughout each rotation, and each staff member is responsible for completing the handover form at the end of the shift to ensure responsibility. The significance of accountability and its growing importance for the organization will need to be clearly communicated to the workers. Staff members require training on stock management, including the consequences of wastage, in order to optimize the company's expenditure on food and consumables and save costs. Staff recruiting takes into account a variety of aspects, most notably fitting into the organization's culture and workflow, which may be difficult for some. It is also difficult to accurately calculate personnel costs because it is unknown whether the hospital will be completely occupied or not. The discretionary spending is mostly for staff members' food and drinks, as well as team-building events. However, discretionary spending is subject to permission and may change from time to time based on the cost incurred, as it is not a primary or necessary cost. It is an additional expenditure incurred in order to improve procedures and the working environment. Given the workload per individual, the team activities will be an excellent opportunity to re-engage them and re-establish their commitment to the organization. Strategic Plan Organizational Vision and Mission Statement The organization aims to consistently deliver top-notch healthcare to its patients, while its mission statement is to provide healthcare services that fulfill customers' expectations by using well-trained staff and individuals. The budget is designed in accordance with the organization's mission statement, prioritizing the provision of excellent patient care. It guarantees that essential supplies, as well as food and beverages, are consistently available for the patients. Measures have been implemented to ensure that the amount of resources used corresponds to the number of patients, although cost-cutting will not be carried out in a way that harms the patient. Gather People and Information The organization's strategic position is determined by its vision and mission statem...