Examine the most recent Income Statement, which may also be called Statement of Revenues and Expenses. This is numbered page 15 of the SCRMC report. Answer the following questions:
13. What are revenues? Give examples.
14. What were the total operating revenues for the year? Did it increase, decrease or stay about the same since the prior year?
15. What are expenses? Give examples.
16. What were the total operating expenses for the year? Did it increase, decrease or stay about the same since the prior year?
17. Did the current year result in an excess of revenue over expenses (may also called operating income or income from operations)? Did the operating income increase, decrease or stay about the same?
18. How much were salaries, wages and employee benefits for the year (in dollars)?
19. Calculate the percentage of total operating expenses accounted for by salaries, wages and employee benefits. (Salaries, wages and benefits / total operating expenses) Convert the decimal to a percentage, example 0.42 = 42%. What does this percentage tell you?
20. Did this healthcare organization make or lose money in the last fiscal year? Explain your answer.
Financial reports are important accounting tools to read and understand. If you’re having a difficult time with the concepts, try creating financial reports for your own household to learn the terminology. There is free software online to set up your accounts and track your finances. One that I recommend is https://www.mint.com/. Quicken software is wonderful if you have a complicated financial life, own a small business, stocks, bonds or rental property. You might also consider taking an accounting course. Sometimes classes in accounting for small businesses are offered for free at local community colleges and other resource centers.
Financial reports are typically created quarterly and annually, sometimes more frequently. Dashboards are a tool for more immediate progress information.
Questions to reflect upon:
1. Does your organization currently use dashboard metrics?
2. Who has access to it and what type of data is available?
3. At the bare minimum, most managers have access to daily staffing numbers and patient census information. What other information would be useful to help you and other managers act in financially responsible ways?
