Ask at least one question in response to an original peer post that you would like the author to explore further

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Ask at least one question in response to an original peer post that you would like the author to explore further.

Respond to at least two of your classmates’ posts

CARMEN’S POST:

10 Steps to an Operating Budget

This week we learned the 10 steps to developing an organizational-wide operating budget. The 10 steps can be used for unit operation ore individual program. According to Dropkin and LaTouche (2007) the “first five steps prepare your organization for the annual budget process; the second five lead you through the creation of the budget” (p. 55). The first five steps are 1) Selecting a budget strategy, 2) Developing next year’s budget and guidelines, 3) Create the annual budgeting calendar, 4) Create budgeting forms, materials, and instruction, 5) Orient managers to the budgeting goals and process, 6) Prepare draft program and unit budgets, 7) Review and Revise draft program or draft unit budgets, 8) Prepare and submit a proposed budget to the board, 9) Review, revise, and approve the final budget, and 10) Implement, monitor, and modify the budget, fiancé staff, mangers.

Identify the two steps that you think will be most difficult for you and provide support for your choices? Which of these steps do you think will be the easiest for you? Select one and explain your decision-making rationale?

I feel that one step that would be the most difficult is anything that require change or making modification. According to Varlotta et. al. (2010) sometimes organizations can be immune to the services and making changes can be difficult because it has worked in the past. Starting from Zero allows individuals to re-assess the budget and make changes or modification if needed. I believe Zero-based budgeting can help organizations improve and is very effective, but at the same time It can be difficult as it requires time, often very threatening to both managers and staff because it involves evaluating, making comparisons, and deciding on desire changes (Dropkin and LaTouche, 2007, p. 31). Overall the most difficult would be selecting the budget strategy which for me would be an annual budget utilizing zero-based budgeting. I would utilize Zero-based budgeting, but keeping in mind the difficulties. This would be more effective in mental health for me as mention in Calley (2009) mental health has been increasing and clinicians have found an increase on specific clinical issues. As society continues to evolve an seeing how this pandemic for example affected us all, mental health organizations had to make modification such as educating individuals about the pandemic, dealing with anxiety, grief, etc. These are some examples of how mental health organization had to develop effective specialized treatment programs to help individuals. In my organization we always brought a focus on depression and PTSD, however, due to the pandemic the focus has been on anxiety, panic attack and grief. Not saying that depression and PTSD is no longer our interest is that it brought on another focus we need to add to our curriculum and calendar. On the other hand, the easiest would be creating the budget calendar. As through this form individuals involved would have a breakdown of task, and the calendar can be used as a form of communication. As mention by Dropkin and LaTouche (2007) “good budget calendars act as a communication tool, providing all budget team member with an overview of the process, as well as specifying who is responsible for accomplishing key tasks by the target dates (p. 43). Having the overview and detailed information will make it easy for the team to stay on task and complete their responsibilities in a timely manner.

Reference:

Calley, N. (2009). Comprehensive program development in mental health counseling: Design, implementation, and evaluation. Journal of Mental Health Counseling, 31(1), 9-21. 

Dropkin, M., Halpin, J., & LaTouche, B. (2007).  The budget-building book for nonprofits  (2nd ed.). Jossey-Bass. 

Varlotta, L. E., Jones, B. C., & Schuh, J. H. (2010). Developing budget models, communication strategies, and relationships to mitigate the pain of tough economic times. New Directions for Student Services, 2010(129), 81–87. https://doi-org.proxy-library.ashford.edu/10.1002/ss.353

 

LESLEY’S POST:

Identify the two steps that you think will be most difficult for you and provide support for your choices?

In truth, I believe that step 1 may pose a large difficulty in answering the questions as to which budget type will be the best and most appropriate within an organization. Dropkin, Halpin, and LaTouche (2007) describe step 1 as being the decision of the budget style. But what happens if all signs point to this budget as being the most optimal and then down the road, the organization faces hardships and discovers rather an alternative would have been more efficient. Additionally, Armitage, Lane, and Webb (2020) point out how crucial the operating budgets are, including their development. Can you just jump ship and change budgeting styles during operation? I have yet to find the true answer to this question.

I also feel that step 4 of Dropkin et al. (2007) ten-step budgeting building might be problematic due to the anticipation of what all needs to be created within the forms, materials, and instructions. Ideally, all angels are examined, every corner has been lit up, and every rock has been turned over but even the most informed and dedicated individuals do not always and cannot always foresee everything.

Which of these steps do you think will be the easiest for you? Select one and explain your decision making rationale?

For the sake of the experience I have, in step 5, familiarizing managers with the budget’s purposes and intentions (Dropkin et al., 2007) would be the easiest for me. By this point, all the questions should have been answered during the development of the budgets, therefore, handing the information down the line to the managers shall be an easier task as this is providing direction and explanation, with fairly clear-cut guidelines. Armitage et al. (2020) provide examples for positive budget acceptance and control when managers are utilized as factors within a budget, sometimes setting the budgets themselves for their departments. After all, a manager is in charge of their territory and might know better at how to operate optimally than say a board member or even higher up level manager who really doesn’t dabble with the specifics in each department.

Reference

Armitage, H. M., Lane, D., & Webb, A. (2020). Budget Development and Use in Small? and Medium?Sized Enterprises: A Field Investigation. Accounting Perspectives, 19(3), 205–240.  https://doi-org.proxy-library.ashford.edu/10.1111/1911-3838.12231 (Links to an external site.)

Dropkin, M., Halpin, J., & LaTouche, B. (2007). The budget-building book for nonprofits (2nd ed.). San Francisco, CA: Jossey-Bass.

 

INSTRUCTOR’S POST:

Nice job on this posting.  So what stands out to you the most as your reviewed these sources as well as did the writing?  What were your most significant gains?  How might these impact your career aspirations?

 

 

 

· Ask at least one question in response to an original peer post that you would like the author to explore further.

Respond to at least two of your classmates’ posts

JO’S POST:

A part of developing a budget is knowing how much can be made from the funding source by providing that particular service. Budget justification allows for you to determine In that process if your organization can get the type of clientele needed for those services to receive the revenue needed to maintain your business. According to John et al. (2014), An accurate and binding forecast serves fiscal sustainability by providing the hard budget constraint of resources available for allocation across public services. This process forces organizations to gain better control over their income and expenses. Your revenue is determined by your payer source and for many organizations, this can vary from one source to several. For example, if a payer source is offering $20 per client per month for 8,000 covered clients as an organization you have to determine if you can make a profit on that amount. Guglielmo 1996 suggests putting minor variations in your revenue,  like if the payer source reduces the amount that is normally reimbursed for a particular procedure. Payer sources often change their rates and these changes may not be a part of the provider's budget. By considering these possible changes an organization can prepare to not have a huge loss at the end of their fiscal year. 

 By implementing practices where the breakdown of exact costs needed for all programs. Although a tedious task a strict budget can determine and assist with an organization having a profit at the end of the fiscal year. Justification for cost and expenditures helps to determine where money can be reduced or added for the following fiscal years. If a program is in need of a larger budget by justifying the higher cost for particular program supplies or special event costs will need to be justified and shown as a need to assist in bringing in more revenue. 

References

Guglielmo, W. J. (1996). Putting your practice on a budget. Medical Economics, 73(11), 141. Retrieved from  https://www-proquest-com.proxy-library.ashford.edu/trade-journals/putting-your-practice-on-budget/docview/227733987/se-2?accountid=32521 (Links to an external site.)

John L. Mikesell, & Justin M. Ross. (2014). State Revenue Forecasts and Political Acceptance: The Value of Consensus Forecasting in the Budget Process. Public Administration Review, 74(2), 188–203.  https://doi-org.proxy-library.ashford.edu/10.1111/puar.12166 (Links to an external site.)

 

Parsons, L., Howell, T., & James, T. F. (2012). Building new programs in women’s health: a fiscal perspective. International Journal of Childbirth Education, 27(1), 64.

 

TIFFANY’S POST:

Income and Revenue Projections

There are several reason why projected income/revenues is essential when it comes to creating a budget.  Projected income or revenue is when you approximate what kind of financial outcome or results your organization may have within a certain timeframe in the future. This projection can consist of profits and potential losses. One reason that projected income or revenue is important is that when you are considering making changes to your organization or business project income or revenue can help you decide rather or not this is a justified move for your organization at that instant or if it will be better suited for a later time. As stated by Chugunov & Makohan (2020), the development of realistic budgetary projections facilitates justified management decisions aimed at ensuring financial firmness. Projected income is focused on estimating what is to come rather than focusing on what happened in an earlier period. Now if your organization or business is established then you may want to consider past date. Projected income is not only important for making plans for your organization, but it is also important if you are looking to secure any type of funding from an outside source such as a financier or some type of funding from a grant program. Projecting revenue is helpful for a nonprofit when it comes to how they should diversify revenue sources to hedge against uncertainty (Hung & Hager, 2018). Projecting revenue can help you to avoid cash flow issue, such as inadequate/low cash flow. If your projections reveal that you may have cash flow issues, then you can be preemptive at trying to eradicate or diminish the impact. While projected income is about what is anticipated to happen, it still needs to be as precise as possible. Therefore, when projecting future income and revenue you do not want to excessively inflate these figures. You also will need to ensure that the projected income is also based on the type of business or organization that you have.

 

 

Chugunov, I., & Makohon, V. (2020). Budgetary Projection in the System of Financial and Economic Regulation of Social Processes. Baltic Journal of Economic Studies, 6(1), 130-135.  https://doi.org/10.30525/2256-0742/2020-6-1-130-135 (Links to an external site.)

 

 Hung, C., & Hager, M. A. (2019). The Impact of Revenue Diversification on Nonprofit Financial Health: A Meta-analysis. Nonprofit and Voluntary Sector Quarterly, 48(1), 5–27.  https://doi.org/10.1177/0899764018807080

 

INSTRUCTOR’S POST:

You are spot on about the part about having passion and drive but without a plan!  Too many folks are in this position and some can dig themselves into deep holes as a result.  The plan is the heart of the business.  And when you get too emotionally involved with it the results can be devastating.   What does having a plan do to ensure the emotional elements do not take over and block all logic? Any ideas?