In Unit 9, your assignment is to prepare an operating budget proposal for a medical clinic. You will need to prepare a spreadsheet and a narrative report that explains the numbers contained in the spreadsheet. To successfully complete this assignment, you will want to begin reviewing the assignment instructions, scoring guide, and sample operating budget in Unit 9. As a best practice begin work on completing the sample operating budget. Then you can focus your efforts on completing the narrative report to accompany the spreadsheet in Units 8 and 9.
Operating Budget Proposal
For the purpose of this assignment, you are continuing on in your role as an office manager for a group of physicians who own a specialty clinic. The clinics senior leaders have asked you to prepare a budget proposal for the clinic for 2020. From your time at the clinic, you know the clinic needs new billing software and there is a request for a new MRI machine. You plan to factor these known expenses into your proposal. You will also need to explain environmental forces that may affect the budget and how your proposal addresses those forces.
This operating budget proposal assignment consists of two parts.
Use the Sample Operating Budget template located in the Resources to complete this assignment.
The information represents the clinic’s operating budget for 2018 and 2019.
You will fill in the 2020 column.
Remember to account for the new billing software and MRI machine in your proposed numbers. Also keep in mind those costs beyond the purchase price, such as staff training, staff additions, and maintenance. You may find it helpful to refer to the cost-benefit analysis assignment you completed in Unit 6.
You may insert your 2020 proposed budget numbers as a table into your operating budget proposal.
Alternatively, you may attach the sample operating budget separately in the assignment submission area.
Based on your 2020 proposed budget, write a 45-page, double-spaced operating budget proposal that explains and justifies your proposed numbers. Include all of the following headings and address all of the bullets underneath each heading:
Explanation of 2020 Budget Numbers
What are the highlights of the proposed 2020 budget numbers that you want the clinic’s senior leaders to be aware of?
What areas of concern do you want to bring to senior leaders’ attention?
What assumptions did you make as you prepared these numbers?
Note: Be sure to consider the environmental forces that are likely to affect the 2020 budget. Consider such environmental forces as: compliance changes, changes in insurance claims processing, changes in laws and regulations, and so on.
What variances exist between the 2020 proposed numbers and the 2018 and 2019 numbers?
Note: If you plan to insert the 2020 numbers as a table into your proposal, insert them here. Otherwise, you may include them as a separate attachment.
Proposed 2020 Budget’s Alignment With Target Profit Margins
How closely does this budget align with the clinic’s target profit margins?
What variances, if any, require explanation?
Financial Performance Tracking
How will you evaluate financial performance?
What measures will you use to track actual financial performance against projected financial performance over the next year?
How frequently will you report on financial performance?
How will you communicate financial performance to the clinic’s senior leaders?
Addendum: 10% Budget Reductions
As you are putting the finishing touches on your operating budget proposal, your boss stops by your desk. You have been keeping her informed about the information included in the proposal. She indicates that the 2019 financials are falling 10% short of projections. As a result, she has asked you to add a final section to your proposal labeled Addendum: 10% Budget Reductions. She informs you that you don’t have to recalculate the numbers, but she wants you to develop a strategy to reduce the overall budget by 10%. In the narrative, she asks you to explain how you would approach such a request from senior leaders:
Would you reduce each line item by 10%? Why is this the best approach? Also, how do you intend to handle fixed costs with this approach?
Would you select specific line items to reduce by 10%? Why is this the best approach? If so, how would you pinpoint which line items to reduce?
Would you put a freeze on all hiring, training, travel, and purchasing? Why is this the best approach?
Be sure to include references to at least two scholarly and/or authoritative sources in your operating budget proposal. Follow APA guidelines for in-text citations and references. Your final submission needs to include Parts 1 and 2. You may insert Part 1 as a table into Part 2, or you may include Part 1 as a separate attachment.
Format: Use the Sample Operating Budget template provided in the Resources to complete the 2020 column. Insert your 2020 proposed budget numbers as a table into your operating budget proposal (Part 2), or you may submit it separately in the assignment submission area.
Written communication: Be sure that the narrative portion of your operating budget proposal is clear, logical, and succinct. It also needs to be free of errors that detract from the overall message.
Length: 45 typed double-spaced content pages, not including the title and reference pages.
Font and font size: Use Times New Roman, 12-point type.
Title page: Include a title page in APA format as part of your operating budget proposal.
Citations and references: Include references to a minimum of two current scholarly and/or authoritative sources. Current means no more than five years old.
APA format: Use APA format for the title page, proposal, citations, and references. For an APA refresher, consult the APA Style and Format page on Campus.
Scoring Guide: Review this assignments scoring guide so that you understand how your instructor is going to evaluate your work.
Note: Your instructor may also use the Writing Feedback Tool to provide feedback on your writing. In the tool, click the linked resources for helpful writing information.
Operating Budget Proposal Scoring Guide.
Sample Operating Budget [XLSX].
APA Style and Format.
Writing Feedback Tool.
Toggle Drawer[u09d1] Unit 9 Discussion 1Budget Types
Explain at least two different types of budgets (operating, capital, revenue, et cetera) health care organizations use. Why is each budget important to the organization, and which stakeholders would be interested in each?
Discussion posts should address the question, be succinct, be substantive, provide new insight, and incorporate scholarly literature.
Provide substantive comments to your peers according to the Faculty Expectations Message discussion response guidelines, comparing their perspectives to yours. Ask questions to better understand their perspectives and expand the discussion.
Discussion Participation Scoring Guide.
APA Style and Format.
Toggle DrawerUpdates and Handouts
Sample Operating Budget
|Blank cell||2018 Actual||2019 Budget||2020 Projected|
|SALARIES ; BENEFITS:|
|Salaries||$ 762,348||$ 838,583|
|Overtime||$ 48,245||$ 53,070|
|Shift Differential||$ 92,456||$ 101,702|
|FICA||$ 68,125||$ 74,938|
|Health Insurance||$ 58,463||$ 64,309|
|Pension||$ 43,572||$ 47,929|
|SUB-TOTAL||$ 1,073,209||$ 1,180,530||$ – 0|
|Office Supplies||$ 10,214||$ 11,235|
|Patient Care Supplies||$ 45,215||$ 49,737|
|Travel ; Training||$ 8,456||$ 9,302|
|Memberships||$ 1,512||$ 1,663|
|Equipment Repair||$ 10,215||$ 11,237|
|Rentals ; Leases||$ 2,572||$ 2,829|
|Miscellaneous||$ 450||$ 495|
|SUB-TOTAL||$ 78,634||$ 86,497||$ – 0|
|TOTAL COSTS||$ 1,151,843||$ 1,267,027||$ – 0|
|End of Worksheet|