Budgeting performance is crucial in determining an organizations ability to serve its core purposes among them customers and employees’ satisfaction. In addition, understanding the relationship between accounting, finance and the organization’s operating budget is crucial as it enhances strategic planning in view of all the three aspects. In that view, this study demonstrates how the budget performance affects employees’ satisfaction and patient care with reference to Patton Fuller Community hospital. In addition, the analysis explains how accounting and finance are related to the organization’s operating budget.
- How the budget performance affects patient care and employee satisfaction
The plan to increase the nurse pay by $1 while retaining the patient's nurse ratio of 5 to 1 is represented as shown on the following table in comparison with the patient-nurse ratio change. That is in consideration that the nurses cost is based on a wage rate of $30 per hour. (Hardie, 2009)
Source: (Hardie, 2009)
- How finance and accounting are related to the operating budget
Accounting and budgeting financial systems and processes that involve financial planning and an organizational resources allocation Thus, there is an interrelationship between the three that requires consideration of each when planning changes as for the patients nurse ratio. Budgeting is more of planning and enacting a financial plan. However, these financial planning and implementation processes are done upon the accounting of past performance. (Bragg, 2011)
Thus, finance planning in this case involves the need to raise revenue through increased patient care that will possibly attract more clients. On the other hand, accounting records the monthly patients’ number and income as well as nurse costs. (Bragg, 2011) Finally, the budget relies on the past records of patient number and income as well as nurse cost to forecast the change in monthly and total cost with an increase in nurse pay by $1. Thus, the hospital’s finance and accounts are crucial tools for operating budget as they are periodically used to compare the budget with the collected data as a means of identifying variances and addressing them. (Hardie, 2009)
Bragg, S. (2011). Budgeting: The Comprehensive Guide. Centennial: Steven M. Bragg.
Hardie, Z. (2009). Patton Fuller Community Hospital. CFO Report on Nursing Options