BUDGET AND ITS IMPLEMENTATION
-G SANTHANA KUMAR
-ASSISTANT PROFESSOR
-FACULTY OF PHARMACY, MARWADI UNIVERSITY, RAJKOT
DEFINITION:
Financial or quantitative statement prepared for the purpose of attaining the
given objective.
Or
Budget is an estimation of revenue and expenses over a specified future period
of time and is usually compiled and re-evaluated on a periodic basis.
FUNCTIONS:
1.The responsible person will use the budget details to determine whether
the proposal is economically feasible and realistic.
2. To monitor the hospital financial activities.
3. Estimate the cost of completing objectives identified in the proposal.
TYPES OF BUDGET PREPARATION:
1. Short term budget (2 years)
2. Long term budget (5 - 10 years)
1. Income accounts or revenue accounts
2. Expenditure accounts
3. Asking for capital investments
Income accounts or revenue accounts:
Revenue is calculated based on the following aspects:
1. Total income must be calculated for the implementation of the budget.
2.Pharmacy department or accounts department maintains daily, weekly, monthly &
annual cost of the pharmaceuticals issued to the patient services.
3. The other point includes on which revenue is based are:
No of prescriptions
No of prescriptions dispensed by each pharmacist Hours of
work put in
Prescription volume per hour of service Medication
cost per patient day
Average drug cost per clinic visit
Average salary cost per prescription Average
supply cost per requisition
EXPENDITURE ACCOUNTS:
1. Administrative and general expenses.
2. Professional care of the patients.
3. Out-patients and emergency expenses.
4. Miscellaneous expenses.
The expenditure accounts includes the following categories
1. Salaries and wages
2. Supplies and expenses
3. Drugs and pharmaceutical expenses
4. Purchase expense
5. Miscellaneous supplies and expenses.
Permanent Permanent Temporary posts Proposed new post
Request for overtime
Staff (full time) Staff (part time)
payment
Filled position Vacant position Filled position Vacant position
EXPENSES OF SUPPLIES & MATERIALS:
1. Chief pharmacist or the responsible person should prepare the financial statement
regarding the requirement of amount in rupees for supplies and materials with the help
of the latest financial budget.Necessary to show the actual cost of the materials.
2. If the budgeted figure and the previous figure was the same then the previously
prepared budget was well prepared if not than it has to be corrected.
PURCHASE EXPENSE:
It includes the cost of prescriptions purchased from an outside
pharmacy.
DRUGS AND PHARMACEUTICALS:
Those dispensed by prescriptions.Those used in the outpatients and
emergency departments,latter the charges are added on to respective
department.
EQUIPMENT AND CONSTRUCTION BUDGET:
1. Budget for immediate arrangements of a new model equipment.
2. Budget for remodeling and replacement of equipment.
3. Construction of building.
PREPARATION OF BUDGET
Hospital administrator prepares assumptions, in statistical terms, about the
kinds of services (outputs) the hospital expects to provide (produce).
The hospital administrator prepare the economic forecasts in respect of new
developments, or other factors
The hospital administration to outline the budget goals and policies as per the
directives
The financial manager prepare a budget package and forward it to all the
departments Each department head to analyses financial and statistical data
generated by his department as well as provided to him by the finance
department.
A budget hearing is organised by the Finance Officer at the departmental
level where the department head presents his or her draft budget.
The Finance Officer developes the department’s revenue budget,
summarise departmental expense budget, and forward the department’s
budget hearing summary to the concerned department head.
The Finance Officer prepares a preliminary operating revenue budget for
the whole hospital, by summarising and collecting the individual
department’s budgets.
The Finance Officer to summarise the total budget (including capital
budget and cash budget) into a proper budget format including statistical
summaries.
The budget is presented by the Finance Officer to the governing board or
board of trustees or to the finance committee for their approval.
It includes the following parameters
1. Requirement of different departments and man power
2. Actual fund position
3. Utility of particular item
4. Cost of products
5. Quantity of products
ADVANTAGES OF PLANNING THE BUDGET:
1. Develop better financial planning.
2. Gives a better focus on decision making to the management.
3. Effectively manage the financial aspects of the hospital.
4. Exposes the reasons of over expenditure.
5. Helps to focus on hospital priorities
6. Enhance efficiency of staffs and others.
Thank you
