Presented by:-

P.Haripriya
Ⅳ PharmD
14AB1T0018
CONTENTS:-

Definition
Objectives of budget
Advantages
Types of budget
Income or revenue accounts
Expenditure accounts
Preparation of budgets
Implementation of budget
Factors effecting budget
DEFINITION:-
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 form expressed in financial terms.
OBJECTIVES:
ADVANTAGES OF PLANNING THE BUDGET:
Development of standards
Develop better financial planning.
Comparision of actual results with standards
Gives a better focus on decision making to the
Identification of deviation or fluctuation
management.
Analysis of deviation
Effectively manage the financial aspects of the
The responsible person will use the budget details to
hospital.
determine whether the proposal is economically feasible and
Exposes the reasons of over expenditure.
realistic.
Helps to focus on hospital priorities
To monitor the hospital financial activities.
Enhance efficiency of staffs and others
Estimate the cost of completing objectives identified in the
proposal.
TYPES OF BUDGET PREPARATION:
Based on the duration of budget,it can be divided in to:
Short term budget (2 years)
Long term budget (5 - 10 years)
DIVISION OF BUDGETS:
1. Income accounts or revenue accounts
2. Expenditure accounts
3. Asking for capital investments
INCOME ACCOUNTS OR REVENUE ACCOUNTS:
•Total income must be calculated for the implementation of the budget.
•Pharmacy department or accounts department maintains daily, weekly, monthly & annual cost of
the pharmaceuticals issued to the patient services.
The other statistics includes:
No of prescriptions
No of prescriptions dispensed by each pharmacist
Hours of work put in
Prescription volume per hour of service
Medication cost per patient day
Average drug cost per clinic visit
Average salary cost per prescription
Average supply cost per requisition
PREPARATION OF BUDGET :-

Hospital administrator prepares The Finance Officer developes the
assumptions, in statistical terms, department’s revenue budget,
about the kinds of services summarise departmental expense
(outputs) the hospital expects to budget, and forward the
provide (produce) department’s budget hearing
summary to the concerned
department head.
The Finance Officer prepares a
preliminary operating revenue
budget for the whole hospital, by
summarising and collating the
individual department’s budgets.

The hospital administrator The Finance Officer to summarise

prepare the economic forecasts in the total budget (including capital
respect of new developments, or budget and cash budget) into a
other factors A budget hearing is organised by proper budget format including
the Finance Officer at the statistical summaries.
departmental level where the
department head presents his or
her draft budget

The hospital administration to

outline the budget goals and Each department head to analyses
policies as per the directives financial and statistical data
generated by his department as
well as provided to him by the
finance department
The budget is presented by the
Finance Officer to the governing
board or board of trustees or to
the finance committee for their
approval.

The financial manager prepare a

budget package and forward it to
all the departments
IMPLEMENTATION OF BUDGET:

It includes the following parameters

1. Requirement of different departments

2. Actual fund position

3. Utility of particular item

4. Cost of products

5. Quantity of product
FACTORS AFFECTING BUDGET:

•Local conditions and compulsion

•Management policy

•Confidence of higher authorities

•Ability of higher authorities

REFERENCES:-
•Programming, Budgeting, and Control in Health Care Organizations: The State of the Art BY
Robert A. Vraciu
•S.balaSubramanian,N.Narayanan,A Text Book of Clinical and Hospital Pharmacy,2ndedition,pg
no:54-62
•DR.Ramesh .K.Goyal,DR.R.K.Parikh, A Text Book of Hospital Pharmacy,12th edition,
pg no:87-93
•www.parklandhospital.com
•www.slideshare.net
•www.shareyouressays.com