Question

What are some of the budget types used within health services organizations? Briefly describe the purpose and use of each.

Answer 1

Solution. Some of the budget types used within health services organizations are as follows:

1.Operating budget are employed to report income statements by taking operating expenses and revenues during an accounting period starting from salaries of employees to revenues generated from service to patients. It encompasses all expenses which will accrue for operating functions in health service organization along with service cost.

2.Capital Expenditure budget are employed to record and analyse financial reports by taking into account capital costs incurred for the running of an organization. Capital costs in health services organization plays a major role, as with passing years there's development and advancement in technologies and researches are carried for new equipment and considerable amount is funded. Managers need to report and analyse capital budgets for financial security.

3.Cash budget encompasses movement of cash during an accounting period. It provides report to the health service organizations, the financial position of the company to sustain in competitive market.

Based on above mentioned budgets and other budgets(if any), an organization in health service will able to report financial statements for smooth flow of operation by ignoring loss and to build and maintain social impact in society.