Nursing Leadership/Management Role in Budgets
Holy Names University
NURS 151 10 FS
December 6, 2010
The following paper discusses the nurse manager’s/leader’s role in healthcare financial management and budgeting. The definition of a budget is a detailed financial plan. The nurse manager/leader is responsible in knowing and understanding the different types and budgets within the healthcare organization: operating, capital expenditure, and cash. The operating budget is the main budget the nurse manager/leader maintains an active role in for the healthcare organization by controlling personnel and supply costs. Collaboration with the nursing staff on the unit as well as other …show more content…
Healthcare organizations usually set aside a fixed amount of money for capital expenditures each year for items such as safety requirements, building renovations, and large equipment purchases such as monitors or x-ray machines. Nurse managers/leaders may not have authorization to purchase capital items within their budget but it is their responsibility to notify upper management within the organization the need for specific capital items and the reasoning behind it. Lastly, the cash budget, is the operating plan for monthly cash receipts and dispursements (Stafford, 2007). Organizational survival depends on paying bills on time to keep good standings amongst vendors. Although the nurse manager/leader may not be fully involved in preparing cash budgets either, it is helpful to know and understand when constraints on spending are necessary.
Leadership/Management Role Nurse managers/leaders are challenged daily to be as cost-effective as possible and to do this, preparation is the key (Foley, 2005). The operating budget is the budget most nurse managers/leaders are responsible for and spend most of their time in managing their personnel and supplies (Stafford, 2007). Gathering information and planning for the average daily census, FTEs, patient acuity, etc… is essential for developing their budgets and understanding the variances, the difference between the projected and the actual