Budget preparation & implementation

Budget Preparation

1. BUDGET PREPARATION &
IMPLEMENTATION IN HOSPITAL’S
By:-Dr. Manish Pal Singh,
Associate Professor
1Agra Public Pharmacy College, Agra
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2. What is Budget ?
“Is a financial or quantitative interpretation prior to a
defined period of time, of a policy to be pursued for that
period to attain given objectives”
‘HALMA’-
“Budget is described as an instrument through which hospital
administration, management at the department levels and the governing
bodies can review the hospital services in relationship to the prepared
plan in a comprehensive and integrated formexpressed in financial
terms”.
Agra Public Pharmacy College, Agra 2
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3. Agra Public Pharmacy College, Agra 3
Reasons for Hospital Budget Preparation
Demographic
Consideration
Institutional
Consideration
Personal
Consideration
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4. Agra Public Pharmacy College, Agra 4
Function
of
Budget
For Preparing & Filling tenders
To regulate hospital
financial activities
Smooth the
departmental
functions
Estimate to
completing
objectives

5. Agra Public Pharmacy College, Agra 5
•2 yearsShort term
budget
•5-10 yearsLong term
budget
Types of Budget Preparation
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6. Agra Public Pharmacy College, Agra 6
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7. Agra Public Pharmacy College, Agra 7
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8. Agra Public Pharmacy College, Agra 8
Types of Budget’s
Objective
Budget
Zero-based
Budget
Fixed
Budget
Flexible
Budget
Investment
Budget

9. Preparation of Budgets
Each budget is classified into 3-divisions-
Agra Public Pharmacy College, Agra 9
Expenditure
A/C
Equipment &
Construction
Budget
Income A/C

10. 1. Income Account
❑Totalincomemustbecalculatedfortheimplementationofthebudget.
❑Incomeiscalculatedbymaintainingdaily/weekly/monthly/annualrecords.
❑Theavg.totalsumuprepresentsincomeofthedepartmentfromvarious
sources.
❑Pharmacydepartmentoraccountsdepartmentmaintainsdaily,weekly,
monthly&annualcostofthepharmaceuticalsissuedtothepatientservices.
Agra Public Pharmacy College, Agra 10
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11. ❑Hospital income further depends upon the type of patients, i.e. category of
patients-
❑Noofprescriptions
❑Noofprescriptionsdispensedbyeachpharmacist
❑HoursofworkputinPrescriptionvolumeperhourofservice
❑Medicationcostperpatientday
❑Averagedrugcostperclinicvisit
❑Averagesalarycostperprescription
❑Averagesupplycostperrequisition
Agra Public Pharmacy College, Agra 11
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12. 2. Expenditure Accounts
❖ExpenditureA/Cfurtherdividedintofollowingexpenses-
▪Administrativeandgeneralexpenses.
▪Professionalcareofthepatients.
▪Out-patientsandemergencyexpenses.
▪Miscellaneousexpenses.
Agra Public Pharmacy College, Agra 12
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13. ➢Theexpenditureaccountsincludesthefollowingcategories-
➢Salariesandwages
➢Suppliesandexpenses
➢Drugsandpharmaceuticalexpenses
➢Purchaseexpense
➢Miscellaneoussuppliesandexpenses.
Agra Public Pharmacy College, Agra 13
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14. ➢Salaries&Wages:-Togivepermanent&temporarystaffsalaries;thechief
pharmacistshouldsub-dividedthestaffintothreeimportantcategories-
Agra Public Pharmacy College, Agra 14
Administration
Professional
Non-professional

15. Supplies&Materials:-Budgetedforeachitempresentingactualcostof
materialandsupplies.Itincludesthecostofprescriptionspurchasedfroman
outsidepharmacy.Thishelpinpreparationofestimatefornextfinancialyear.
Foradditionofnewmaterial&supplies,thechiefpharmacistshouldascertain
itscost&submitthemfornextbudget.
Drugs and pharmaceuticals:
✓Thosedispensedbyprescriptions.
✓Thoseusedintheoutpatientsandemergencydepartments.
✓Chargesforthelatteraresubmittedtotherespectivedepartments.
Agra Public Pharmacy College, Agra 15

16. 3. Equipment & Construction Budget
➢Itrequiresmajormonetaryfunds.
➢Budgetforimmediatearrangementsofanewmodelequipment.
➢Budgetforremodelingandreplacementofequipment.
➢Constructionofbuilding.
Implementation of Budget
❑Needforimplementationinhospitalbudgetcanbeclearlyillustratedby
comparingtwocaptainssailingdownawide&shallowriver.
❑Theusualbudgetproposalareannuallypreparedbutitcanvaryform3-5
yearsdurationtotakeintoaccountlongtermplanning.
Agra Public Pharmacy College, Agra 16

17. ➢A proper budgeting system facilitates the hospital administration to take
right decision according the local needs, requirements & the order of
priorities.
➢It includes the following parameters-
Agra Public Pharmacy College, Agra 17
Requirement of
different departments
Actual fund
position
Utility of particular
item
Cost of
products
Quantity of products

18. ADVANTAGES OF PLANNING THE
BUDGET
Agra Public Pharmacy College, Agra 18
BETTER FINANCIAL
PLANNING
BETTER FOCUS ON
DECISION MAKING TO
THE MANAGEMENT.
EFFECTIVELY MANAGE
THE FINANCIAL
ASPECTS OF
THE HOSPITAL.
EXPOSES THE REASONS
OF OVER
EXPENDITURE.
HELPS TO FOCUS ON
HOSPITAL PRIORITIES

19. Agra Public Pharmacy College, Agra 19
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20. Agra Public Pharmacy College, Agra 20
Factors Affecting Budget Preparations:
LOCAL
CONDITIONS AND
COMPULSION
MANAGEMENT
POLICY
CONFIDENCE OF
HIGHER
AUTHORITIES