budgeting Flashcards
manages the lab budget
lab head or lab manager
assets and expenses similarities and difference
similarities = both needs to be paid
difference = intention /goal of paying
owning a property
asset
= renting a building
EXPENSES
LONG-TERM ASSET
catex
Equipment that becomes ours
long-term asst
evenue spending/ operating expenditure
short term asset
–electricity
bills water bills, etc. needed for daily
operation
opex
Process of planning, forecasting, controlling,
monitoring the financial resource of organization
budgeting
To determine what kind of asset are needed by the
company and the capacity or ability of the company
to purchase such assets ()
importance of budgeting to capex
To ensure you have enough money to pay or sustain
the bills or expenses. To anticipate if funds are
enough to carry out daily operational expenses
()
importance of budgeting to opex
twoo type of budgetin
opex and catex
2 type of opex
flexible budgeting and zero-based budgeting
Advertising, salary, consumables, rent, maintenance
opex
Daily/regular expenses
opex
Expenses that does not directly relate to services
given to patient but is needed for tha lab to function
properly
opex
Covers equipments, acquisitions and projects that
require financial equipment
capex
Process used to plan ,eval and choose future
investment , equipments, projects, building
capex
Mostly used in labs
flexible budgeting
attempts to set expenditure based on variable
workload volume
flexible budgeting
budget with flexibility para pag madami patients
need mas madami staff, reagents, census na
bibilin or required
FLEXIBLE BUDGETING
census drop if number of test decreases tas
employee den decreases, pati demand
FLEXIBLE BUDGETING
opex increase if workload increases vice versa
FLEXIBLE BUDGETING
analysing needs based on prioritising of goods and
objectives and not on past or history allocations
Zero-based budgeting
based on priority,objectives, or kung ano in
demand
Zero-based budgeting
the process is independent or whether total
budget for specific test is decreasing or increasing
Zero-based budgeting
OPERATIONAL BUDGETING PREPARATIOn
- TIME FRAME
- FORECASTING STAGE
- SCHEDULING STAY
- SYNETHESIS OF INFORMATION
annual budget (1 year) or budget cycle in the man
working guidelines for the management
TIME FRAME
you forecast based on historical information or
predict the budget that will be prepared out of
history 2-3 years back
FORECASTINGSTAGE
USED IN FORECASTING STAGE
- SHIFT IN PATIENT MIX OR VOLUME
-CHANGE IN MED STAFF COMPOSITION - CHANGE IN BUSINESS PARAMETERS LIKE INFLATION AND REIMBURSEMENT RATE
- EXPANSION OR CUTBACK IN SERVICE OFFERED BY HOSPITAL OR LAB
- POPULATION FLUNJCTUATION BROUGHT ABOUT BY CHANGES IN LOCAL ECONOMY
when budget is prepared must be at a time prior to
physical year most of the time January.
SCHEDULING STAY
how financial information is organized
synthesis of information
Budget management is organized in 3 parts
a. Revenue and volume figure
Revenue
b. Itemized cost categories
c. Labor hours
income generated from the services
and sales
revenue
budget must be presented logically.
Sources/income/Funds using should be presented
first before expenses yung 3 part sa taas, kung
magkano gusto mo kitain next year and kung
magkano censu
synthesis of information
type of analysis in capex
NARRATIVE DESCRIPTION AND QUANTITATIVE TECHNIQUE
includes written
justification of the project and a prioritization of the
competing proposa
NARRATIVE DESCRIPTION
detailed rationale for the project budget,
how it will benefit the lab and why it should
be considered over competing subject
JUSTIFICATION
= reviewing to maintain service level
= Provide significant savings over
current methods
= enhance or improve current
programs
= offer new products or services
PROPOSAL JUSTIFICATION
additional step on justification is to
prioritise project, both in the time frame and in relation to other request, capital budget
forms as scaled according to rank ??
PRIORITIZATION
in relation to other request, capital budget
forms as scaled according to rank ??
OPPORTUNITY COST
used to determine the
financial feasibility of tehe project m
QUANTITATIVE TECHNIQUE
Length of time it will take
to cover the cash outlays for a project.
PAYBACK
METHODS USED IN QUANTITATIVE TECHNIQUE
- PAYBACK PERIOD
- AVERAGE RATE OF RETURN
- NET PRESENT VALUE
- INTERNAL RATE OF RETURN
- REQUIRED RATE OF RETURN
PAYBACK PERIOD COMPUTATION
computation: purchase price of
project/equipment divided by annual income
generated by the project or equipment
average yield over
life of an investment. Magkano kikitain in a
lifespaN
AVERAGE RATE OF RETURN
worth of future earnings
at today’s rate;
NET PRESENT VALUE
ratio of cash flow
and cost of capital factors to amount of
investment required. Magkanoo kikitain over
the invested mone
INTERNAL RATE OF RETURN
bottom-line level
of income requirement by a company before
any project is considered. Pag di kumita to
ng specific amount of money di bibilin
. required rate of return
