Budgeting

Perform Complete Cost Analysis for Your Organization

Affinity ERP Budgeting is an outstanding tool for budget preparation. You can perform a complete cost analysis on all departments and procedures before final approval.

Save Hours of Tedious Calculations

Global modification features greatly simplify the task of preparing a budget. The system was designed to allow administrators and department directors to concentrate on the development of valid budget assumptions. You define the assumptions, such as Actual, Budget, Budget Revision 1, etc. When the budget is finished, the software provides a complete cost analysis using the new budget assumptions. All assumptions can be copied from one set to another and can be copied, modified or deleted globally or by selected department(s).

This single feature will save hours of tedious calculations!

You can also make percentage changes to each data set. Of course, any item (e.g., account standards, procedure volumes or charges, allocations, revenue realizations) may be changed individually. For example, you can change the rate of pay for a group of employees such as department directors or nurses. Procedure volumes and/or charges can be changed with varying percentages by department, financial class or patient type.

Flexible Budgeting

The Flexible Budgeting module is integrated with the Cost Accounting application. Account standards are set during the cost accounting phase of implementation. Using the current budget, Flexible Budgeting features will 'flex' the budget based on actual charge item volumes, allowing administrators and department directors to monitor actual performance.

The Process

Actual charge volumes and revenue are downloaded each month and imported using interface utility programs provided with the system. The system calculates the actual service units (patient days, acuity values, lab procedures, CAPs, etc.) and provides a comparison to the budgeted volumes for each service unit. For example, actual volumes of laboratory tests will be shown along with the actual number of laboratory hours.

Affinity ERP Budgeting will increase or decrease the budget amount for each account based on the variability of the accounts in relation to the actual service unit volumes. The resulting analyses provide valuable information about budget variances. Variances for each labor group account include:

  • Total Variance. Were budget objectives achieved for the actual level of activity? Then analyze the total variance by providing the following information:
    • Efficiency Variance. Did the department utilize more or less staff than was expected for this level of activity?
    • Rate Variance. Was the actual rate of pay for each labor account higher or lower than anticipated?

Variances for non-labor accounts do not include the efficiency and rate variances.