Budget Assignment Example | Topics and Well Written Essays - 1250 words

Budget - Assignment Example This type of budget helps corporate to have an insight on whether the available income will suffice to finance the anticipated expenditure (Millett, 2011). On the other hand, budget forecast, utilizes financial figures for previous period to come up with figures for the current period (Brookson, 2000). Therefore, it can be scrutinize that budget is a very important tool that can help to monitor revenues and avoid unnecessary spending (Millett, 2011). This assignment will focus on determining strategies for managing budget within forecast by comparing expenses with the budget and determining the possible reasons for a variance. Additionally, bench marking techniques will be identified and how they can help to improve future budgetary forecast within a hospital. Determine specific strategies to manage budgets within forecasts. Corporate financial managers and senior clinical financial officers may utilize different strategies for managing budgets within forecast. Among the suggested st rategies that may be used include; cost variance strategy, performance based strategy, zero based strategy, bench marking strategy and activity based strategy (Brookson, 2000). The cost variance strategy, focuses on finding the difference between the budgeted cost and the actual cost .When a negative variance is obtain, it is an indication that the actual cost were more than budgeted cost (Finkler & McHugh, 2008). Therefore, clinical financial officers should find out the reason for a negative variance and employ necessary measures to prevent such discrepancies in the future. Clinical financial officers may use performance based strategy. This strategy employs performance based dashboard and matrices to determine the proximate cause for a variance and look on necessary measures that can be employed to remedy the situation (Brookson, 2000). Additionally, clinical financial officers may apply zero based strategy to control budget. In this strategy, each expense incurred is assessed an d necessary recommendations are made thereafter (Finkler & McHugh, 2008). Bench marking strategy may be used whereby; information of the best performing hospitals may be gathered and analyzed. The information gathered may be used by clinical financial officers and hospital managers to make future budgetary improvements in their respective hospitals. The improvements may be carried out by emulating the best practices from a benchmarked hospital (Finkler & McHugh, 2008). Connectively, clinical financial officers may apply activity based strategy to control budget. In this strategy, hospital operating cost data may be gathered and allotted to specific activities in the hospital (Finkler & McHugh, 2008). Compare five to seven expense results with budget expectations, and describe possible reasons for variance. The following expenses were selected for comparison purposes and the possible reasons for the variances have been explained under each expense: Supplies 8,418 6,693 (1,725) -25.8% 89,456 84,283 (5,173) -6.1% 79,183 -13.0% The supply expenses were higher than the budgeted cost based on above figures. This indicates that the difference between budgeted cost and actual supply cost provided a negative variance (Millett, 2011).The possible reason for a negative supply variance may be attributed to higher demand for medical tools used to attend