Are you budgeting for 2021? Not the most exhilarating activity when it comes to running your facility, but it is an essential part of maintaining profitability. Whether you run a healthcare clinic, large IDN, manufacturing facility, energy company/installation, or you run a utility company, it’s a necessary task that sets you up well for the following year.
I think we can all agree that 2020 got away from us in regard to the budget and keeping on track. Were there some projects or plans that got pushed to the wayside? Maybe some necessary technology improvements that you consequentially postponed?
Let’s explore some of the different styles of budget planning*:
Traditional Extended Budget
6 months or more of the year is spent investing in budget development. The figures used are loosely based on a full picture of the previous year, but because the process can take months, the results are often immediately out-of-date.
This approach was developed to address the inaccuracies of an annual budget that leans on volume estimates and forecasts that are not based on historical data. Calculating the variable budget based on actual volumes of the relevant components.
This approach takes actual volumes experienced by the organization and flexes the variable budget revenues and expenses accordingly. This style of budgeting is based on what has actually happened versus was has been speculated.
Continuous or Rolling Budget
Each month, the budget is extended as the year progresses therefore always having a “12 month” budget in place beginning each month. This approach reduces the effort required for the budget process and therefore allows it to be more flexible.
Where does your organization fit in? If you are like the majority of organizations, you are probably viewing your budgets for next year with a tighter lens and stronger grip on your wallets.
Let’s take healthcare for example. Healthcare budgeting innovation has historically been lagging in responsiveness to the times**. The lag is caused by many different factors; use of traditional budget strategy and several different departments that typically have their own budgets and their own agendas. Many of the departments carry differing weights to their perceived importance, but they absolutely carry different needs, varying expense levels, and differing profit margins to consider. These battling departments either wind up getting favorable treatment or losing out on some necessary restocking or upgrade plans.
If these stories are resonating with you. You are not alone. There is, however, a strategy that can help many organizations in the circumstance where there are battling departments or divisions. Many utilize a centralized innovation budget**. This budget is specifically created for the purchasing and upgrading of technology and software amid different departments. It is dedicated to the upgrading of technology versus simply the essential consumables that the departments need. Each department can draw from that budget for the special needs and the authority is held by a central party.
It is likely that you skipped on some upgrading or “refreshing” of the essential support products that make your facility hum. While you have likely “made it” this year without the upgrades, it has likely had an effect on your efficiency in comparison to the upgraded materials. If you are looking to make those upgrades and request those budgetary funds, SK&T Integration can assist you with that. If you are needing to upgrade things like your scanners, label printers, RFID equipment, or reorder your quarterly supply of any label sizes you require we can help you get the necessary upgrades and refresh your stocks.
At SK&T Integration, we specialize in putting together holistic plans that incorporate all your needs. We listen, formulate a plan and presentation that fit your needs specifically, and then deliver a proposal at superior pricing that will save you time, effort, and more importantly budget. On top of saving money on the overall upgrade, consider the amount of time you are saving over a year by making your facility run smoother.
What does an upgrade through SK&T Integration mean to your business?
- Healthcare: Imagine how much more time you get to spend with patients
- Manufacturing: producing your customer’s biggest orders in shorter timeframes
- Warehousing: increasing staging and load efficiency by even the smallest percentage could equate to more business, less misses, and fewer accidents
- Retail: customer interaction is a better experience and you can create a contactless option for your consumers.
* “The Next Generation of Budgeting for Healthcare” https://www.hfma.org/topics/article/62571.html
** “Hospital Budget Systems Are Holding Back Innovation https://hbr.org/2018/03/hospital-budget-systems-are-holding-back-innovation