Preparing a budget

Many advantages can be derived from preparing budgets. Budgets force managers to think ahead by requiring them to formalize their planning efforts. Budgets provide a blueprint for accomplishing a set of stated hospital-wide objectives and fitting your department into the overall plan. They provide definite goals and objectives which serve as bench-marks for evaluating subsequent performance. In essence, they set up a warning system for conditions requiring some type of remedial action. In an overall sense, the budget process coordinates the activities of the entire institution by integrating the plans and objectives of the various departments. Budgets help administration ensure that the goals of your department are consistent with the broad goals of the entire hospital.