Steps in the Budget Process - Research Paper

Introduction

Nurse Managers set objectives and goals then in collaboration with the finance department they design the budget for a nursing unit or their responsibility center. The budget is developed and forwarded to the administration. After administration, the budget is taken to the board of directors for it to be approved. After approval, the fiscal year starts where the organization is set to deliver the planned programs and services (Rundio, 2016). The steps involved in the budget development process are discussed below

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Collecting Relevant Data

This is an essential task in creating and formulating budgets (Rundio, 2016). The relevant data include:

• Services offered- The nurse manager collects this data. This is the individual who best knows the services currently being offered and services to be offered in the future. For instance, the nursing manager may be willing to bring additional beds in the underutilized nursing unit.
• Case or patent mix- This is concerning to the complexity and levels of care. Consequently, high reimbursement is required for a more complicated case. Each nursing unit calculates the overall case-mix index. This is done by the finance department of the organization.
• Payer mix- In this, data is calculated by the department of finance to show the demographics of the patient
• Acuity index- This involves numeric calculation of the keenness and sensitivity of each patient on a certain nursing unit.

Identify Expenses and Income

While planning for a budget an institution or individual is certain about the amount of money to expect and to earn. Moreover, the planner has an idea of where the earned money will be used depending on the track of past expenses. In budget planning, it is essential to recognize and identify income and expenses.

Separate Wants and Needs

It is essential for a budget planner to separate what is needed and what is a luxury in an attempt of taking care of the priorities that are essential.

Evaluating special needsEvery organization and individual has specific expenses to take care of. As such, it is important to take notes of the special needs that apply to remember to include them in the budget plan (Rundio, 2016).

Designing the Budget

While designing the budget, it is essential to make sure that one does not use more than earned. It is necessary to balance the budget in that it accommodates everything that needs to be paid and catered for.

Implementing Plan

The plan for the budget is executed by the nursing manager after it has been approved by the top administration and the organization's board of directors. This is not a different process from the previous years for the nursing manager though it might entail implementations of treatments and new services. This occurs on a day to day basis as budgeted expenses will be compared with actual expenses. (Rundio, 2016)

Monitoring the Budget

Once finalizing of the budget has occurred and the funds have been distributed, the process is considered to be over (Rundio, 2016). However, it is essential to track the success and progress of the budget implemented. While monitoring and evaluating it is critical to look for areas where waste seems to occur, and resources are lacking or inefficient to avoid such mistakes in future budget cycles.

Taking Corrective Measures When Necessary

Initial goals may be altered depending on the performance. A change in the levels and types of services and resources used may also be required.

Types of Budget

Capital budget- These are finances required for growth of capital items. It is needed for the replacement of worn out furniture, equipment, and machinery and for buying new supplies and facilities (Jose, 2013). The decision for this type of budget is depended on:

• Available finances.
• Effects of additional equipment on expenditure and income.
• The needs of patients and the alternatives already existing.

Operating budget- This budget gives an overview of the facility's functions by projecting the operations planned in the next fiscal year. The nurse manager may include employee benefits, salaries, medical and surgical supplies, insurance, rent, office supplies, light, heat, and housekeeping in the budget. Both the non-controllable and controllable expenses are projected in this type of budget (Jose, 2013).

Personal budget- This is the budget that provides estimates of direct labor costs necessary required to meet the nursing needs of the patient population estimated at the nursing facility. This budget can be based on some unfilled positions, current staffing, and the previous year's report (Jose, 2013).

Cash budget- This is the budget that is planned to create adequate finances available as required. It also ensures using any extra funds profitably. This ensures that the nursing facility got enough funds to use but not too much. This involves the cash at hand in the nursing facility during the entire budgetary period (Jose, 2013).

Budget Planning

Budget planning is a process that entails the identification of sources of income and taking account of all future and current expenses with an objective of meeting the financial goal of an individual. In the situation of a family or personal budget, the inflows are identified in order to plan for the outflow. Good budgeting strategies are useful tools for successful management, expenditure planning and securing one's future. Several steps are followed for effective budget personal planning (Peavler, 2019). The first step is calculating income including all sources of income such as paycheck and interest from other investments. The second step is determining the bill essentials. In this step, one is required to list down essential expenses such as rent, clothing, grocery, electricity, car maintenance, gas, and telephone expense. After listing one should calculate the amount spent at each expense and combine them all.

The third step is determining the debt elimination. Debt elimination involves noting down total debts including interest payable in all the debts. The fourth step is determining a bill for non-essentials. Examples of nonessentials should include gifts, restaurants, and trips. The fifth step is calculating expenses. Some of the benefits of budget planning are that it puts balances and checks in place to pre4vent overspending (Peavler, 2019). Moreover, it keeps account of the unexpected need for money and helps in maintaining standards of living post-retirement. However, budget planning has various shortcomings. For instance, if done excessively it may affect the quality of lives of individuals, as well as the adherence of a tight budget, can become an issue.

Allocation of Funds

Funding models influence the development of sub-acute facilities and services for the elderly on vent and trach. Elements of funding models include the relationship among demand, need and utilization, the nature of funding flows, and the potential basis for repayment. The nature of funding consists of financing that is who pays for the services, delivery which includes the providers of the services and allocation which consists of the individual who allocates resources, distribution is the link between delivery and financing.

Funding of sub-acute care services such as rehabilitation, psycho-geriatric, sub-acute mental health, and geriatric management and evaluation is always bundled up with palliative care services through the national agreement.

The Nurse Manager's Role

Nursing managers are responsible for cost-effectively and responsibly staff the nursing departments through biweekly, monthly and weekly schedules. Additionally, Nurses managers are responsible for submitting pay roles for the department. Even in an institution with computer systems and advanced timekeeping systems, nurse managers have to review, evaluate and validate the payroll reports.

The other role of a nurse manager is to keep an eye on the medical supplies as well as encourage responsible use of supplies to other staffs (Feigenbaum, 2017). Also when needed be the nurse manager is given the responsibility of rationing and allocating supplies efficiently. The other role is utilizing insurance. Nurse Managers review a patient case to ensure that care is delivered in the best way possible putting into consideration the patient's financial status and the hospital's needs.

Primarily a nurse duty is to evaluate the performance of staff nurse, provide mentoring and feedback, develop education programs, interview and hire nurses as well as medical staff (Feigenbaum, 2017). Nurse Managers are also responsible for providing guidance and leadership to other nurses, ensure the team and support system is well trained, monitor patient care and apply evidence-based policies and practices. It is the role of a Nurse Manager to review periodic budgetary

How a Nurse Manager Learn About Budgeting/Fiscal

To become a competent nurse, it takes a sharp mind, sound learning, and solid practical skills. Excellent leadership, however, requires one to have the desire to learn and improve continually. Nurse Managers can learn through mentoring (Peavler, 2019). Mentor provides different levels of guidance. As such, mentors give juniors an ample avenue to reinforce their skills and learn more on their career path. This is because mentors share experiences and the knowledge they know and have received in the career for the time they have been working.

Additionally, nurse managers can learn and grow by engaging in team building activities. The other tip is by setting goals. By aligning department and organizational goals, a nurse manager is capable of promoting teamwork as well as preventing confusion in the operations of a firm thus providing an adequate environment to learn and grow skills. Moreover, A nurse should encourage open communication in give room for ideas, corrections, and opinions of others about financial planning and budgeting.

References

Feigenbaum, E. (2017, September 26). The Financial Role of the Nurse Manager. Retrieved February 27, 2019, from https://bizfluent.com/info-8492372-financial-role-nurse-manager.html

Jose, B. (2013, November 20). Budget in Nursing Administration. Retrieved from SlideShare: https://www.slideshare.net/bivinjose/budget-in-nursing-administrationPeavler, R. (2019, January 13). What Are the Reasons for Business Budget Planning? Retrieved February 27, 2019, from https://www.thebalancesmb.com/business-budget-planning-reasons-393029

Rundio, A. (2016, October 22). Budget development for nurse managers. Retrieved from Reflections on Nursing Leadership:https://www.reflectionsonnursingleadership.org/features/more-features/budget-development-for-the-nurse-manager