Home Health & Hospice

The Budget Process

Homecare Insider, September 13, 2012

To put it simply, the budget is your projection of what your agency is going to spend and what it’s going to earn. If your fiscal year runs January through December, as many do, you should begin this process in August. By October, your budget for the next fiscal year should be ready for governing body approval.

Here’s what you need to begin working on your agency budget:
  • Your budget for the current year
  • Staff input (equipment needed, education planned, etc.)
  • Estimates/quotes for any planned equipment purchases
  • Documentation to support requests for additional staff
  • Current staff list and pay rates
  • Financial statements for the year to date (January through July or August)
  • Budget worksheets

Budget worksheets are a simple way for you to write out your plan before you place your budget in the required format. You should have a worksheet for each account in your chart of accounts. Your worksheets will include justifications for any expenditures that are projected to increase. If your agency is facility-based, you will still prepare your budget and present it to key hospital personnel, usually the CFO and CEO. During that meeting, you will be expected to explain increases and decreases in expenditures and staff. So, arm yourself with any documentation that supports your budget. After their approval, it will then be presented to the governing body along with all other hospital department budgets.

Remember, it is important to involve your staff in the budget process. Dedicate a portion of a staff meeting to budget discussion, and ask for their input regarding equipment and education needs. Let them know ahead of time that budget discussion will be on the agenda so that they can come prepared. Don’t forget to include membership and subscription fees, as these are often key sources of education. You might revise the worksheet several times before your final budget presentation.