The first step in the budget process is for the hospital administrator to prepare assumptions, in statistical terms, about the kinds of services (outputs) the hospital expects to provide (produce), i.e. prepare a quantitative expression of the plans of the hospital, e.g. patient days of service, by specialties, number …

What is a cash budget in healthcare?

A cash budget details a company’s cash inflow and outflow during a specified budget period, such as a month, quarter or year. Its primary purpose is to provide the status of the company’s cash position at any point of time.

What is a line item budget?

A line-item budget is one in which the individual financial statement items are grouped by category. It shows the comparison between the financial data for the past accounting or budgeting periods and estimated figures for the current or a future period.

What is included in a cash budget?

Short-term cash budgets will look at items such as utility bills, rent, payroll, payments to suppliers, other operating expenses, and investments. Long-term cash budgets focus on quarterly and annual tax payments, capital expenditure projects, and long-term investments.

What are the essentials of budgeting for a hospital?

The essentials of budgeting are to set specific goals for future operations and to have a periodic comparison of actual results with the financial goals established. Many types of budgets can be used, but three which are important to any hospital are the operating budget, capital budget and the cash budget. ACKNOWLEDGEMENT

How to prepare a cash budget for 2011?

From the following budget data, forecast the cash position at the end of April, May and June 2011. Sales: 20% realized in the month of sales, discount allowed 2%. Balance realized equally in two subsequent months. Purchases: These are paid in the month following the month of supply.

How long does it take to prepare a hospital budget?

The budget is then adopted by the board or the committee with revisions if necessary. It is later communicated to all department heads and other concerned persons. The time taken to prepare a hospital budget can vary from some weeks to some months.

Which is the eighth step in the hospital budget process?

The eighth step is for the Finance Officer to prepare a preliminary operating revenue budget for the whole hospital, by summarising and collating the individual department’s budgets. Finance officer also prepares a cash budget at this stage. If the expected revenue does not cover the budget expense, price increases may become necessary.