The budget cycle for the next fiscal year begins some months before the start of the next fiscal year. Timing and deadlines will be set by the organisation for which you work. The typical budget process entails: defining the budget objectives, reviewing data, developing a base budget, and preparing the next year’s budget. The budget process does not stop there. Once the new fiscal year begins, the budget is monitored on a regular basis (usually monthly or quarterly); variances and the reasons for those variances are analysed. If variances of concern are detected, plans may be implemented to remediate the variance. The impact or progress of this remediation is monitored and other amendments are made as needed (Figure 2. The Budget Cycle).
Activity #1
Watch the following short introduction to budgeting and budgeting processes.
Video: Introduction to Budgeting (Managerial Accounting) (7:05)
Activity #2
Read the following excerpt from The Nurse Manager’s Guide to Budgeting & Finance, 2nd ed. (Rundio, 2016).
Activity #3
- Budgeting timetables/cycles
- Organisational and unit objectives in relation to the budget
- Organisational assumptions that drive budget development.
