Budgeting and management planning and control
henever there is a requirement for management planning and control, some necessary tools are required to perform this activity and Budgeting is one of them. Budgets are made to help meet objectives. Developing a budget and sticking to it will allow you to live within your means and avoid financial crisis. In the case of Victoria hospital there is an absence of such mechanism the authorities were unable to understand that budgets do not subsist in a vacuity, it’s an essential part of a framework designed for planning that is take up by the businesses approaching towards growth.
The budgeting work which was done the by the secretary of the hospital was not focusing on core factors such as minimize cost and increase revenue. They don’t have knowledge of best practices in setting and managing healthcare organization budget. They are un-aware of using comparative benchmarks, doesn’t have such experience of setting accurate, high performance department budgets, there is a lack of culture of accountability, no such mechanism of managing expenses and monitoring variances and required corrective actions plans.
To run a successful business it is really necessary to keep an eye on the future, what are the future requirements for your business and what are the opportunities and how you can take best out of it. Whatever a business is strive to attain, a risk factor is involved unless its managers have a clear picture that what would be the future of their business and what sort of business opportunities would be available.
It is necessary that you should have clear mission / vision and purpose what you are trying to achieve from your business. It might be valuable some time to make a distinction between the vision and purpose. The purposes of the business are more precise than its vision/mission. They will set out more accurately that what exactly needs to be accomplished. In order to achieve the purpose of the business a variety of possible choices/strategies may be available.
This will include an activity of collecting information which might be a very time consuming especially when the business is trying to enter in a new market, launching a new product, putting investment in some kind of technology. Evaluating the options and making a selection: While you are looking for a suitable options to choose the concerned authorities or managers must make sure information relating to each option to observe whether the chosen option interlinked with the purpose of the business and to evaluate whether the resources to pursue the options are available.
Collecting information on performance and exercising control: In today’s business environment accounting is a very useful tool in the control process. This all because it is likely to assert plans in accounting terminology(budgets) and it also likely to assert real outcomes in the same terminology which makes it easier to compare between real and planned outcomes. Where real outcomes are at difference with budgets, this difference should be underlined by accounting information.