In order to apply a goal or plan, the organization must develop a budget. It takes strategic planning within an organization such as Cape Fear Valley Health System (CFVHS) to help recognize their goals, activities, and resources necessary to fulfill their overall vision. Fritze states that a budget is the gathering of data for the preparation of anticipated cost and revenue for a future period (2001). Budgeting for CFVHC is crucial for overall supplies and services along with the many different departments that must plan individual budgets because it will raise awareness to reduce economic risks, therefore ensuring survival of an organization (Fritze, 2001). In order to become profitable, it is important to monitor incoming money, but limiting the amount of money being spent will help maintain the stability of the organization.
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Third party payees such as Medicare, Medicaid, Commercial and self-pay provide the amount of services recognized within a statistics budget (Zelman, 2014). Revenue and expenses are the accrual basis of accounting where expenses are matched with revenue and help develop the operating budget. Revenue consists of income or earnings and is utilized by every functioning business. Once revenue is earned over a period of time it will be recognized within the income statement. They will be shown as revenue accrued either by the fiscal year or monthly. An example of accrual basis accounting would be recording a sale as soon as an invoice is issued, while a cash basis would wait to record the sale once it is paid. Also, an accrual basis company will document an expense as received, while a cash basis company would only record once the supplier has been paid. Time frame is the major difference in cash basis versus accrual basis accounting. Cash is recorded as it happens and accrual is over a period of
Third party payees such as Medicare, Medicaid, Commercial and self-pay provide the amount of services recognized within a statistics budget (Zelman, 2014). Revenue and expenses are the accrual basis of accounting where expenses are matched with revenue and help develop the operating budget. Revenue consists of income or earnings and is utilized by every functioning business. Once revenue is earned over a period of time it will be recognized within the income statement. They will be shown as revenue accrued either by the fiscal year or monthly. An example of accrual basis accounting would be recording a sale as soon as an invoice is issued, while a cash basis would wait to record the sale once it is paid. Also, an accrual basis company will document an expense as received, while a cash basis company would only record once the supplier has been paid. Time frame is the major difference in cash basis versus accrual basis accounting. Cash is recorded as it happens and accrual is over a period of