Excel spreadsheet of six-month budget for the clinic with revenue and expense projections
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You have been asked by the hospital’s chief administrator to create a new six-month operations budget for the clinic. Using an Excel spreadsheet, create a new six-month budget for the clinic that includes the following revenue and expense projections:
The clinic’s revenue is projected to grow by approximately 3% as a result of a new managed care contract.
The cost of expenses is expected to increase to 1.5%.
The clinic will also be adding a new roof to the facility at a projected cost of $50,000.
Then prepare a memo for the chief administrator. The memo should include a review of the previous year’s budget, an analysis of the upcoming changes (figures above), and a discussion about the impacts that these changes will have on the budget for the upcoming year.
Please see rubric below:
A – 4 – Mastery
Memo includes a complete and thorough review of the year’s budget with multiple examples or supporting details.
A – 4 – Mastery
Memo includes a comprehensive analysis of the proposed changes, incorporating the following figures: clinic revenue growth of approximately 3%, a result of the new managed care contract, expense cost increase of 1.5%, new roof for facility at $50,000
A – 4 – Mastery
Memo includes a clear and thorough discussion on the impacts that the changes will have on the budget for the upcoming year. Includes multiple examples or supporting details.
A – 4 – Mastery
Excel spreadsheet of six-month budget for the clinic with revenue and expense projections has no significant errors.
Sample Solution
In this memo, I will review the previous year’s budget and analyze upcoming changes to create a six-month operations budget for the clinic.
For the previous year’s budget, we saw an increase in revenue over our initial projections. This was due in part to new managed care contracts that allowed us to provide more services and increase capacity for existing services. However, overall expenses were also up due to increased personnel costs and other operational expenses. Total outlays for last fiscal year totaled $1 million with a surplus of $75,000.
Looking ahead to the next six months, we are expecting our total revenues from managed care contracts to increase by 3%. Meanwhile, our cost of expenses is expected to go up as well by 1.5%, primarily driven by higher personnel costs associated with hiring additional staff members (i.e., nurses). Lastly, we have allocated $50k towards replacing the roof of our facility which has not been updated since 2005.
Overall, these changes should have a positive impact on our operations budget going forward as they will allow us to generate more reliable income streams while keeping operating costs relatively low. Furthermore, investing in updating parts of our facility will help reduce future maintenance costs and improve patient safety/comfort levels when visiting us for various services.
As such, it is my recommendation that we move ahead with creating a new six-month operations budget utilizing these figures as starting points until further notice from management or other stakeholders involved in driving decisions related with setting financial goals/targets for the upcoming fiscal year.
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