Proper budgeting is prudent for maintaining a realistically financially responsible unit. For nurses, sticking to a budget is helpful for upholding fiscal security. However, it is often essential to make changes to the budget, or to reallocate funds from one budget to another in order to successfully balance the unit’s finances. The operating budget takes into consideration a variety of components. It outlines previously identified expenditures, as well as predicted future expenses, and a calculation of probable income in the upcoming year. Capital budgeting, on the other hand, is a method of critically examining a company’s assets and determining whether further investments or large purchases for the company will pay off. Finally, the cash budget simply outlines the company’s income and expenses. In other words, the cash budget lays out where money is being spent and brought in. This lens is helpful for comparing the costs of maintaining the company to its monetary gains.
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The financial goals as outlined in the expense portion of an operations budget seek to spend less than the combination of supporting employees and purchasing and maintaining equipment. This part of the budget went over the cost of paying nurses for overtime, as well as the cost of providing health and dental care plans for employees. It also sought to minimize the amount spent on updating equipment without letting standards fall. In short, this aspect of the budget’s objective is to make sure the company did not only break even but was also able to reap a profit. The nurse manager receives these reports of operation from a team of financial advisers that compiles the facts of the current economic situation, as well as compares the company’s progress to past fiscal periods. Using this information, the nurse manager can make decisions on how to maintain the budget.
For a nursing team, the budget can be slightly precarious. As equipment is essential to the safety and health of both patients and nurses alike, it is imperative that when there is a malfunction it be fixed as swiftly as possible. For this reason, the amount of new equipment purchased and other equipment repaired can cause influxes in the budget. The number of overtime hours worked by the nursing team can also lead to variations in the budget. More rare contexts such as patient lawsuits can also greatly influence the budget. Being that the budget is so essential to the cohesiveness of the units, it is essential to stay generally on the targeted budget. The percentage of acceptable variance is slightly different based on the size of the unit. The unit I studied had a set acceptable variance of about 5%. Some of the larger units I noticed had acceptable variance levels of as high as 10%. In order to stay within these boundaries, nurse leaders must know when to concede certain luxuries in order to keep the balance afloat. One of the most important tools utilized here is the balancing and redistribution of funds. In order to maintain all of the budgets as successfully as possible, sometimes one budget may have to take a hit in order to prevent another from falling apart. Changes to allocations must be made by looking at the past fiscal years in retrospect. The unit I studied chose to invest in new technological advances to support the comfort of patients. This will prevent them, however, from hiring new staff members as previously planned. While the new budget may fail to alleviate strain from the nursing force, it succeeds in other ways. A successful budget is one that accepts a respectable amount of give and take. Budgets cannot be set in stone; they must be flexible, for if they do not bend they will break.
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