The Budgeting Process

The Budgeting Process
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Institution
The Budgeting Process
The process of creating an operational budget is a continuous process with an annual cycle. This process entails six key steps that should be followed to the letter for the business to be operational. The six steps of the budgeting process are outlined below.
Setting objectives: during this stage, the budget committee reviews the various budget estimates from each segment and makes recommendations based on what they consider to be important or non-important.
Analyzing available resources: this is an important stage that entails the business committee going reviewing the available finances in order to determine what they need to include or exclude from the business process.
Negotiating to estimate business components: for the business process to be successful there is a need for cooperation between all the different levels within the healthcare organization. This step of the budgeting process entails all the different departments coming together to engage in negotiations on what is crucial for inclusion in the budget.
Coordinating and reviewing components: this step of the budgeting process involves the budget being passed down through successive levels in the company to enable managers at each level to make their contribution and offer greater detail for their juniors. This is an important step of the process as it ensures that the budget is comprehensive.
Obtaining final approval: this step entails looking at the possible challenges that might arise. This process is crucial as it enables the management to arrange for important aspects such as short loan financing instead of waiting for a financial crisis to occur.
Distributing the approved budget: this is the last stage of the budgeting process and it is the point at which the budget is released to the accounts department for the releas...