Budgeting and Managing Finances Flashcards

A set of vocabulary flashcards covering basic terminology, types of budgets, and methods related to financial management in nursing.

Budgeting Process

A systematic plan providing the best estimate of nursing expenses and revenues, expressed in financial terms and carried out within a specific time frame.

Operating Budget

An overall plan that accounts for expenses and revenues related to the day-to-day operation of a unit for a fiscal year.

Personnel Budget

The largest part of the operating budget, specifically dealing with expenses related to nursing personnel and staffing.

Capital Budget

A budget for equipment, furniture, technology hardware and software, and building renovations that have a multiyear life and meet a minimum cost limit.

Full-time equivalents (FTEs)

The number of personnel needed to staff a unit to maintain safe quality patient care for $24$ hours per day, $7$ days per week, and $52$ weeks per year.

Effectiveness

Providing care based on evidence while avoiding the underuse and overuse of resources.

Efficiency

The process of evaluating system inefficiencies and eliminating outdated processes to improve care delivery.

Average Daily Census (ADC)

The metric used to forecast staffing needs and convert FTEs to dollar values for cost-effective budget decisions.

Budgeting Steps

The sequence of actions used in the budget process: Assessment, Diagnosis, Planning, Implementation, and Evaluation.

Direct Expenses

A category of budget terminology representing costs that are directly related to patient care.

Indirect Expenses

A category of budget terminology representing overhead or costs not directly tied to a specific patient care activity.

Fixed Costs

Expenses that do not change based on the volume of service or patient census.

Variable Costs

Expenses that fluctuate in direct proportion to changes in patient volume or acuity.

Productivity

A measure of workload used to quantify the productive hours needed to deliver nursing care.

Incremental Budgeting

A specific method of budgeting identified as a type of budgeting used by nurse leaders.

Performance Budgeting

A budgeting method focused on the relationship between funding and the results of nursing services.

Zero-Based Budgeting

A budgeting method where every expense must be justified for each new period, starting from a zero base.