1. Budget & cost accounting
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2. The outline: Cost accounting. The objectives of the cost accounting .
Functions of the cost accounting.
Cost analysis.
Budget.
Types of budget.
Cost containment.
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3. Cost accounting
Cost accounting is a mechanism of accounting, means which costs of services or products are ascertained and controlled in hospitals.
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4. The objectives of the cost accounting are:
Ascertainment of the costs. التحقق من التكاليف
Determination of the selling price.
Cost control.
Matching the cost with revenue. الايرادات
Cost study and investigation.
Preparation of the financial statements, loss account, and balance sheet.
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5. Functions of the cost accounting:
It serve as a guide in fixing the price of service or product.
To find out the source of economy in production process.
To help in effective material management.
To do effective financial control on factors of production.
To find out the profitability((ربحية of each product or service.
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6. Cost analysis: There are three methods of cost analysis :
Cost allocation.
Cost benefit analysis.
Cost effectiveness analysis.
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7. Cost allocation:
It means setting up budgeting and accounting systems in a way that allows managers to determine the cost per unit of services.
It is a management tool for evaluation process.
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8. Cost benefit analysis:
This is an economic technique in health planning and evaluation.
This technique help us to decide whether a particular alternative is worth for achieving the results or objectives in a monetary terms. الناحية النقدية
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9. Monitory terms
input
resources
output
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10. Steps of the cost benefit analysis:
Define the scope or perspective of the analysis.
Conduct cost analysis.
Estimate program effects.
Estimate the monitory value of the outcomes.
Account for the effects of time.
Aggregate and apply a decision rule.
Describe distributional consequences.
Conduct sensitivity analysis.
Discuss the qualitative residual.
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11. الأحد، 09 صفر، 1439 Describe the alternatives to be evaluated
Determine perspective will guide the evaluation.
Define the scope or perspective of the analysis
Step 1:
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12. الأحد، 09 صفر، 1439 Conduct cost analysis Step 2:
Identify and estimate the monitory value of all recourses used in the intervention, not only the budgetary costs.
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13. Estimate program effects
Step 3:
It is outcome evaluation method
Test the Cost effectiveness of the program
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14. Step 4: Estimate the monitory value of the outcomes.
This is the most difficult and controversial aspects of conducting a cost-benefit analysis and it may require the help of consultant.
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15. Step 5: Account for the effects of time.
Is discounting of costs and calculating rates of return for alternative uses of money.
It is one of the trickiest aspects of the cost-benefit analysis especially for longitudinal studies. اصعب الجوانب
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16. Aggregate and apply a decision rule
Step 6:
If we are looking at the cost and benefits on several outcomes how will we decide which has priority????
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17. الأحد، 09 صفر، 1439 Describe distributional consequences. Step 7:
It is related to choosing our perspectives of analysis.
It specify how gains.
It specify how loses.
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18. Conduct sensitivity analysis.
Step 8:
Conduct sensitivity analysis.
Identifying the assumption behind our cost estimates and considering how critical they are to our calculations.
If one of our assumptions turns out not to be accurate will that change our whole calculation?
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19. Discuss the qualitative residual.
Step9:
Since there are always some thing that cant be quantified or given monitory values, it is important that the report should include some discussion of these issue.
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20. Cost effective analysis
This technique is useful in evaluating different alternatives and selecting the most effective alternative for achieving the result.
The limitation is the input or the resources can be measured in a monitory terms, but it is not possible to measure the outputs or results in a monetary terms. It is measured only in its effectiveness.
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21. الأحد، 09 صفر، 1439 methodology of cost effective analysis
4. Select the best cost effective alternative for achievement of the objectives of a health program
3. Analyze the relationship between costs and effectiveness of each alternative
2. Analyze the effectiveness of each alternative in achieving the objective of plan
1. Develop costing details of each alternative.
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22. Budget: A budget is a quantitative expression of a plan of action.
budget help in coordinate and implement plans.
We are asked to prepare a budget to show how we would spend money if we got it for a program or project.
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23. Budget:
It is numerical expression of expected income and planned expenditures for an organization for expected period of time.
Is a plan that expressed in quantitative term, usually monetary term covering a specific period of time, usually one year.
Nursing Budget
Is a systematic plan that is an informed best estimate by nurse administrators of revenues & nursing expenses.
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24. Types of budget:
Revenue budget: is a forecast because it is based on projecting ((ابراز future sale.
Expense budget: it list the primary activities undertaken by a unit to achieve its goals and allocate an amount to each.
Cash budget: cash budget are forecasts of how much cash the organization will have on hand and how much it need to meet expenses.
Capital expenditure budget :investment in buildings and major equipment
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25. Budgeting approaches:
Master budget.
Zero-base budget.
Performance budget.
Incremental budget.
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26. Incremental budget: الميزانية الاضافية
Characteristics:
Funds are allocated to a department then the manager of that department allocate funds to activities
It develops out of the previous budget.
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27. Performance budget.
It allocate funds to groups of activities that are needed to achieve specific objective.
Funds allocated to activities not to departments.
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28. الأحد، 09 صفر، 1439 objectives of Performance budget
Measurement of the performance in relation to long term objectives.
Making the performance more effective.
Improving the budget formulation.
Coordinating the physical and financial aspects of organization performance.
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29. Zero-base budget.
Require managers to justify their budget requests in details from scratch, regardless to the previous appropriation. من نقطة الصفر
The major disadvantages of ZBB is that it increase paperwork and require time to prepare.
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30. Is a method of budgeting used to control costs.
Zero budgeting
Is a method of budgeting used to control costs.
It builds the budget from scratch each year.
It starts from zero, and everything must be justified by each new budget cycle.
Each function must stand on its own merits, and the merits of each function are reviewed annually.
It is a way of looking at existing programs.
Assumes that no existing program is entitled to automatic approval.
Includes using of decision packages and prioritization.
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31. Objectives of ZBB
To evaluate claims on scarce( (نادرresources in the light of hospital objectives .
To make tradeoffs amongst current operations developmental needs and availabilities of resources.
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32. Steps in preparation of ZBB
Formulation of decision package: it identifies a specific activity in such a manner that administration can evaluate it and rank it against other activities competing for the same resources and decide whether to approve it or not.
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33. The decision packages are the :following type
Mutually exclusive decision package:
identify the alternative ways of performing the same functions, evaluate it and select the best alternative.
Incremental decision package:
It would identify the minimum level of activity or cost levels of efforts as separate decision package.
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34. Cost Containment:
Cost containment refers to effective and efficient delivery of services while generating needed revenues (الإيرادات) for continued organizational productivity.
The goal is to deliver the services with high quality at the lowest possible cost.
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35. In a budget, expenses are classified as:
fixed expenses : do not vary with volume.
include a building’s mortgage payment
the payroll of salary employees
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36. In a budget, expenses are classified as:
2.Variable expenses: will increase or decrease based on volume.
include supply costs
the payroll of hourly employees.
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37. In a budget, expenses are classified as:
3.Controllable expenses: are those that can be managed or controlled.
include the number of employees working each shift.
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38. “In a budget, expenses are classified as:
4. Uncontrollable expenses : cannot be managed or controlled such as :
equipment depreciation (الاستهلاك).
supplies that are necessary to deliver care.
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39. In today’s health-care market, the increasing costs of health-care delivery have resulted in a strained health-care system. توتر
It is essential for healthcare organizations to operate at the highest level of efficiency and to be acutely aware of cost containment.
Nurse managers need to become increasingly aware of the need for cost containment.
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40. It does not have to mean a deficiency of care think of it as doing things differently while delivering the same high quality of care, to save money.
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41. @ Office and medical supplies.
Expenses
Are the costs of providing services frequently called overhead. They include :
@ Wages and salaries
@ Fringe benefits
@ Supplies
@ Food service
@ Utilities
@ Office and medical supplies.
Full cost includes both direct and indirect expenses.
As part of the budget , they are a collection or summary of forecasts for each cost center's account .
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42. Ensures that best methods are used to achieve financial objectives.
Budgetary Planning
Ensures that best methods are used to achieve financial objectives.
It should be based on valid objectives to provide a service that the community needs & for which it will pay .
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