The Importance Of Financial Planning And Budget

A well-run Healthcare Organization (HCO) understands how essential it is to develop a financial plan and budget. The financial function requires the HCOs deliberate effort to set projective goals. In order for the HCO to continue to increase financial capital, a Long Term Financial Plan (LTFP) must be established. The long-term plan requires input from all team members that include the Chief Executive Officer (CEO), physicians, and clinical staff. If HCO monies are not designated to a budget, it complicates fund allocation and puts them at financial risk. An HCO without a financial budget opens the opportunity for financial abuse, misuse, and poor management. Therefore, a Governing Board (GB) is important to the HCO financial

“The finance activity must be measured using appropriate parts of the operational scorecard, with negotiated goals, benchmarks, and continuous improvement” (White and Griffith 449). This leads to answer question two Finance is slow in producing cost data and cost analyses. It is expected for an HCO to develop a forecasted financial budget plan that covers 18 months in the advance. Consecutively, a well-run HCO projects their budget plans a second and third

If there is not enough routing capital it raises concerns of mismanagement. If there are not enough capital funds, it conveys that there is not a solid budget plan in place. Under those circumstances, if there is a financial budget in place, an audit of the expenditures helps to review expenses. All in all, the prompt resolution is essential that uses the tools of “listening, further data gathering and analysis, negotiation, counseling, process revision, and retraining” (White and Griffith 452). Furthermore, what is most important to empower management to learn to contribute and work as colleagues. In this process, the HCO accepts full transparency to maintain trust between all stakeholders during the