Flexible Budgeting

Paper Summary:

The financial term 'flexible budget' was introduced to the writer during a discussion thread conversation regarding conflict of interest and healthcare financial objectives and goals. The purpose of this paper is to define flexible budgeting, and apply the concepts of flexible budgeting by analyzing various descriptive articles. The writer notes that flexible budgeting can be applied to any industry that provides a service or product. The writer concludes that cost management is becoming a responsibility that is held to an established level of accountability for mid-level managers and a flexible budget tool can be a useful resource in managing the costs associated with providing quality health care.



Outline:
Introduction
Flexible (Variable) Budget
Research Summary
Application of Flexible Budgeting
Conclusion

From the Paper:

"The articles discussed the concepts and implementation of flexible budgeting in detail. A common concept that appeared in all articles is the departmental education and training and overall acceptance of the budget plan. The planning stages of the transition from a traditional budget to a flexible budget can often take a year or more. A committee is formed of specialized staff from all departments of the medical facility. The committee is developed to form the activity measures and cost variability relationships. Determining activity measures and applying cost variability measures is not a perfect science and may take time to discover actual relationships based on the trends of the medical facility. Departmental managers will play a crucial role in managing department budgets by monitoring trends by comparing actual numbers to historical numbers to establish a trend. A goal of the finance department is to create and practice a culture of open communication and development of the departmental managers In order for a flexible budgeting to succeed is acceptance of the program. The financial department must communicate to the departments that the system is not designed to cut budgets but to enhance the budget in times of resource need. Most hospitals are currently using a mixed budget of traditional budget factors such as fixed costs and a flexible budget when determining costs for staffing."

Sample of Sources Used:

• Berger, S. (2004, August). 10 ways to improve healthcare cost management. hfm (Healthcare Financial Management), 58(8), 76-80. Retrieved October 8, 2007, from Business Source Complete database.
• Barr, P. (2005, September 12). FLEXING YOUR BUDGET. Modern Healthcare, 35(37), 24-26. Retrieved October 8, 2007, from Academic Search Premier database.

More papers on Flexible Budgeting:

• Analytical Essay # 13177 : "Flexible Budgets"
• Analytical Essay # 150002 : "The Drawbacks of Budgeting"
• Analytical Essay # 146066 : "The Powers of Budgeting"

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