Essay on Budgeting: Crucial for Business Success & Avoid Bankruptcy

Introduction

The budgeting of any company and its finances is very crucial for its success. The income and the expenses are all measured so that they can both fit for any company. Funds that are not quite well budget can lead to bankruptcy or significant failures in the running of the business. When this happens, so many people get hurt. This especially will hit hard for those who work in the organization. Since their salaries will be put on hold or they might lose their jobs all in all. This paper will look into how better the metrics for financial management can be achieved.

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Paul recently got promoted to the chief financial officer of the Columbus City Health System. This job comes with so many issues as he is responsible for making the system to run better financially. As he took the job, he found that there were so many hurdles that would ruin the working of the company financial. The first issue was the changes that were made with the passing of the Affordable Care Act. This meant that the services offered hard to be high while the patient pays something small. This means that the income they get will be very little compared to what they got before. If the income reduces and the expenses remain the same, then the extra amount of money put aside for rainy days will not be there. Paul knows that explaining this to the board and the administrators will be hard. They will not be able to understand that the laws have changed the working of things in CCHS. The issue of the Affordable Care Act comes with third-party payments and also the incentives and penalties concerning the organizations' performances. If the organization does well, it is given some incentives, and if they do not, then they will be heavily penalized financially.

The Affordable Care Act was not the only issue that Paul noticed with CCHS financial system. The other concern involved the cost of tracking and acquiring quality data. The health system looks into always gathering data on their patients and workers too. This is very costly hence the concern that Paul had in mind. The cost that he had calculated was of the resources that were used in the organization. An example of a resource is the cost of additional labour such as cleaners, cooks and others. These resources are an important requirement to get to the standards to meet the Centers for Medicare and Medicaid Services. He saw that his funds were minimal and that population health is essential as well as meeting the standards put out. Paul knew that to keep up the standards set, then he would have to strain the income of the organization. This was going to be very detrimental to the working of the organization, CCHS. This was another big issue that he was facing and knew that he had to solve it fast so that he could plan an elaborate budget for the organization.

Conclusion

In conclusion, they will always be very many financial issues in any organization. Precise planning and establishing of an elaborate budget is the best way to solve the problems. Paul looks at talking to the board and administrators to try and get them on board on increasing topics such as investors. Understanding the policies that go hand in hand with the type of work you do is essential to know what you will owe the government at a certain time. Without finances, then no organization can run smoothly. This also applies to organizations that have mismanaged funds. What is needed and what is wanted are put aside to make the expenses less than what they are initially supposed to be. To ensure that you work out the business financial metrics, the important thing is by noting the problems that exist then plan what steps you will take to make things better.