Budgets: How They Are Planned, Prepared, and Managed

Budget planning and execution is as difficult as it is vital to any practice, whether academic, private, or group. Well-planned and executed budgets are a source of revenue and growth that fuels the practice for the next cycle. Conversely, poorly planned budget is disastrous, and a badly executed one invariably leads to unrecoverable losses. Many clinicians, especially those in academic centers, are not involved in budget-planning preparation and yet are held accountable for their yearly performance in relation to the budget.

Key processes for budget planning and their significance are identified. Integrating these steps with the needs of a clinical practice, a stepwise method is described for both clinicians and administrators to work together to plan, prepare, and manage budgets.

Relevant examples of how budgets affect clinical workflow and common pitfalls of budget planning and mitigation methods are identified. A simplified systematic approach allows for a streamlined, smooth budget-planning process that involves faculty and staff, which holds them accountable for the year-long performance of the entire clinical team.

A systematic proactive approach to budget-planning, preparation, and management provides a financial direction to the department; tracks performance; allows growth; and provides the flexibility to stay on track, change course, or reassign resources.