Question

Present below are a few of the best methods in designing and managing budgets for healthcare organizations.

* Using comparative benchmarks

* Setting accurate, high-performance department budgets

* Establishing a culture of accountability

* Managing expenses

* Monitoring variances and requiring corrective action plans

* Employing a balanced scorecard

(Assignment) Please choose five from the list above and discuss how these methods can improve the overall budgeting objectives and accomplish strategic financial goals.

Answer 1

1.  

An optimally designed and managed Comparative Benchmark study can lead to:

• Better knowledge of industry and market trends
• Actionable insights about your competitors’ Customer Experience
• Understanding of how your brand matches up to the rest of the industry
• Ability to better cater your brand activities to customer interests

Comparative Benchmarking Study pressing brand questions:

What are the goals or benchmarks that are set by your competitors?

How is your industry effected by new market trends and technologies?

How does your brand’s goals or benchmarks compare to the rest of the industry?

Our robust analytics and reporting services deliver clear, fact-based marketing and merchandising compliance insights to the right people at the right time, enabling you to focus with pinpoint accuracy on the most important action planning and priorities, at every level of your organization.

2. rafting a budget is easiest if you wrote one the previous year. Those projections, coupled with the actual income and expense figures you realized, would form the basis of your estimates for the coming year. But if you're reading this article, the odds are that you've never written a budget for your business before. In that case, read on.

Target your sales and profits. Start out by developing a target for your sales revenues, advises SCORE, a non-profit group with 370 chapters that is dedicated to helping entrepreneurs and small businesses form, grow and succeed. For a startup business, begin by estimating what type of realistic profit you'd like to see in the coming year. If you have been in business for a while, take your company's most recent financial statements -- be they generated by a ledger or a computer software program -- and use those as the basis for developing your sales and profit targets. The reason you start with sales and/or profits is because this information will drive the rest of your estimates for costs, expenses, and capital expenditures. Take into considering factors that might affect your sales numbers -- such as the economy or the loss of a major customer – but don't worry too much because the basic tenet of budgeting is that the figures will never turn out to be exactly right.

Calculate operating expenses. A good place to start, once again, is those financial statements. These statements should include an itemized list of the fixed and variable expenses you incurred during the year, including salaries and wages, rent, postage, research, travel, utilities, taxes, etc. If you're just starting out, you're going to have to brainstorm to make sure you factor in all the costs you will incur.

Figure out gross profit margin. Again, this is much easier if you've been in business for a while. In that case, estimate the cost of your goods sold (beginning inventory, goods purchased or manufactured, shipping charges, etc.) and subtract that from your overall sales revenue, SCORE advises.

Take time to readjust figures. Given the estimations for sales and expenses, you most likely will want to go back and readjust your estimates to reach your profit targets. This may mean you purchase fewer new supplies in the coming year or you need to add two new employees. Factor in these adjusted costs and or savings and run the numbers again. You may need to bite the bullet and go to an accountant or business consultant for help with your budget figures. Either way, remember that it's important to use realistic figures so that your budget can help you guide your business. Remember that budgeting is not an exact science. "A budget works on common sense," Butcher says. "If you made $100,000 last year in revenue, common sense indicates you won't make a million next year. Your best off estimating in the range of $80,000 to $120,000." But be prepared to make adjustments to your budget as the year progresses. You may have set your sales figures too high when the economic slump hits your business. Or, conversely, you may land a client that doubles your business.

3.   

5 Keys to Promoting Accountability in Your Business

What do accountable employees do differently? For one thing, they quickly acknowledge their mistakes and failures and focus on correcting the situation and learning from the experience. In addition, accountable employees don’t pass the buck or blame others. They keep their word and honor their commitments even when they would prefer not to. Finally, accountable employees push through and find a way to get the job done despite the various obstacles and setbacks.

Clearly, then, a culture of accountability is desirable -- in any organization. And accountability, as we recently wrote, comes from the top. To create accountability at your own company, make sure you have solid, consistent leadership that demonstrates and rewards accountable behaviors. Have your leadership model the accountable traits you desire in your employees. To do that, build the culture you want using the following three important steps:

Hire people who will take responsibility.

You need great material from which to build your organization. Therefore, hiring the right people is important. You have probably heard that past behavior is the best predictor of future behavior. Most HR professionals would agree that for hiring, it is important to probe for past behaviors and actions, and their results, to have a better idea of how an employee might perform in similar circumstances.

We suggest looking for people with a history of accountability. What types of roles have they held in the past? Did they seek out leadership positions in school, in personal pursuits or in previous jobs?

Related: Why an Accountability Buddy Is Your Secret Weapon for Faster Growth

Ask interview questions about specific situations where an employee demonstrated accountable behaviors. For instance, ask about a time when, despite planning, the employee failed. Follow up with questions like, What did you learn from the failure?What did you do to resolve or fix the situation? What did you do differently the next time you were confronted with a similar situation?

Alternatively, you could ask about a time when this person chose to honor a commitment or do the right thing despite the fact that that action caused personal hardship. Again, follow up to get specifics. Listen carefully. Does the candidate blame other people, or make excuses, or does he/she take responsibility for the outcomes? Does he make disclosures? Does she focus on the problem or the solutions?

Set clear and measurable goals/expectations.

If you are going to hold employees accountable for delivering results, be explicit about exactly what results you expect. It can be helpful to involve the employee in the process. When employees feel they've helped in setting the goals, a sense of buy-in results. While SMART goals (specific, measurable, achievable, results-focused and time- bound) have been around for more than 30 years, they are still an effective management tool. With this tool, goals or expectations should be:

• Written -- If you don’t write your expectations down, the chance for a misunderstanding of exactly what the goal is, increases exponentially.
• Specific and measurable -- Broad generalizations such as “Improve performance” are not helpful. “Achieve sales of $1.3 million” is a much better goal. It is a specific, measurable goal, not open to interpretation. There can be no disagreement regarding whether the employee achieved such a goal.
• Achievable with effort -- Goals that are too easy to attain aren’t useful. They will not drive performance. Goals that are unattainable will frustrate rather than motivate employees. Employees should see the goals as a real stretch, but achievable.
• Relevant -- Ensure that goals are aligned with one other. They should also be aligned with the company’s overall goals and with the goals of other employees.
• Time- and resource-constrained -- Be clear regarding when the goal must be achieved and the resources that the employee can use. Growing annual sales by 10 percent may be a wonderful goal, but if the employee achieves this by hiring six new salespeople or spending a million dollars on advertising, the cost may exceed the benefit.

Delegate authority.

You should delegate to specific accountable employees those key decisions that will affect results. For example, we often see well-meaning business owners attempt to hold an employee accountable for delivering results, but those owners don't give the employee the authority to choose his/her team.

This is a mistake. Nothing impacts results more than the choice of who will do the work. If you are going to effectively hold people accountable for results, empower them to make the decisions that impact the results.

Measure and review results.

You should measure, track and review results with employees. Too often, we’ve seen goals developed, written down and put into a file. Either they are never discussed again or they are discussed a whole year later at the annual review.

Systematically reviewing an employee’s progress toward achieving a goal is much more effective. We believe that weekly one-on-one meetings work best to keep employees on track. However, in positions where progress toward goals naturally moves more slowly, you may decide to meet less frequently.

In this same context, however, we believe that meeting less than monthly defeats the process. Remember, what you measure and what you pay attention to is what you will get. If you focus on the most important goals and make them a priority, so will your employees.

Address deficiencies.

During reviews, you may need to state that an employee is not on track to succeed; in that case, require him/her to develop a plan to address the deficiency. Berating the employee is not helpful. Instead, ask her/him what actions will correct the problem. If the response seems insufficient, coach the employee. Help develop a set of action steps to allow her/him to achieve the goal. Remember, as the manager, you are accountable for ensuring that your employees succeed. At the end of the day, if your employees fail to achieve their goals, you have failed as well.

Related: 4 Rules to Provide Flexibility Without Losing Accountability

The message, then, is that to create a culture of accountability, where employees are engaged and seek ownership, you should start by practicing what you preach. Once you are leading the way, you can use the steps outlined above to work with your employees to create the culture you desire.

4.

Cost is one of the major aspects that powers a project toward success. Thus, it is very important to ensure that there is a sufficient supply of funds coming in, from the correct sources and at the correct time, to meet all the project requirements. Thus, project managers use a systematic approach to manage the overall cost expenses in a project, which is known as project cost management. Through this article, I will be giving you a detailed explanation of what exactly is cost management, how it is done and what are the processes involved in it.

In this project cost management article, I will be taking you through the following topics:

• Project cost management
• Cost management benefits
• Project cost management processes

5.  

Significant variances identified in the budget monitoring report usually require corrective action. These actions should be documented in the budget monitoring action planner, sometimes called the budget management action planner. The action planner is a table that includes detailed analysis of the significant variances and information about the actions to be taken for each. The information shown in the columns of the planner are:

a) Budget item – the account code or budget line description of the type of expense or income, eg. travel and subsistence, vehicle maintenance, venue hire, training fees.

b) Variance (% or $) – the percentage or monetary value of the significant variance. The number is shown as a positive (where expenditure less than budget or income over budget) or negative (where expenditure is over budget or income is less than budget).

c) Variance type – this column indicates whether the variance is permanent or temporary. Remember that temporary variances will work their way through the system over time, but larger ones might still have an impact on cash flow or activity targets. Temporary variances still need to be monitored.

d) Level of control over budget – this column shows to what extent the budget holder has control over this budget and its variance (low, medium or high). For example does the team have the authority or power to make savings if the budget is overspent, or stimulate its use if it is under-spent?

e) Impact on project and grant if not corrected – if the variance is not addressed, will there be an impact on the project or the overall grant. For example might this weaken the cash flow, will delays impact on the team achieving project targets, and are variances exceeding allowable tolerances from the funder?

f) Action required by – the team should show what will be done and who is responsible, to minimize the impact of the variance and get the project back on track. It is important to note what actions are needed to meet funder requirements, for example undertaking a budget revision, advising funder of delays or requesting a ‘no-cost’ extension. Other actions might involve requesting unrestricted funds to cover over-spends, changing activity plans or making efforts to reduce costs or stimulate spending.