Week 3 Lecture 3.html

Strategic Planning

Strategic planning is the basis of all of the organization's future endeavors. Strategic planning is founded on the organization's mission, vision, and values but does not provide managers with the details needed for everyday operations. By managing the budget day by day, the operational details are uncovered. What is obtained from the strategic plan is a vision of the organization over a period of five years or so. This timeline is necessary because many of the capital projects that an organization takes on, such as construction of new buildings, takes place over a period of several years. An Operational Budget will forecast in a detailed method a review of all potential or estimated income which the organization can identify. Traditionally this projection or forecasting of organizational revenue is defined in a relative period of time—for most organizations this time frame is a year—however, it may be a calendar year or the organization’s own year (a fiscal year) defined by its budget protocol and may well be, as an example, June of 2014 to May 2015. The Operational Budget is representative of the entire entity and as such must rely upon the creation of sub-budgets first which are usually departmental in nature. These sub-budgets serve to drive the completed organization’s Operational Budget and as such must be detailed and accurate. One critical element to always remember here is that for all organizations the Operational Budget is short term in nature (1 year) and therefore, as outlined in the GAAP will not generally include Capital Outlay as CO is Long-Term Cost.

In this unit, we looked at different types of accounting methods and methodologies. We talked about gross and net profit, examined revenue from direct and indirect costs, and discussed the social implications of certain types of revenue and expense issues.

Inherent in these discussions were marketing decisions such as the types of services to offer, comparisons with other HCOs, the services needed by a community, and projections for the future on the basis of the expected growth of the community. Please review the following for more information before doing the assignments.