Hospital Variance Analysis

Typically after every New Year is finished and another begins, hospital administrators or CEO’s call for a financial analysis to be completed. Managers of variable departments in a hospital than must gather the financial data needed and provide the CEO or administration with a written report. Throughout the year accountants within the hospital have been keeping receipts and documented records to account for every expense, budget fluctuation, cost, and accumulated revenue. This is a perfect example demonstrating the importance of teamwork within a medical environment. As a manager of a variable department within the hospital, it is their job to collect all the records and documents from the accountants and organize them into a variance report …show more content…
A budget is easier to think of as a planned financial outcome so this is an important part of a variance analysis. Another important component is called the Actual outcome. The actual outcome is the amount actually used by the department, therefore it is the “financial outcome”. The actual and budget outcomes are listed in columns running parallel to one another for the purpose of easy assessment and comparison for the viewers. In order to find the variance which is the difference between the two outcomes, a manager needs to simply subtract the budget outcome from the actual …show more content…
Along with many responsibilities and time sensitive tasks the manager is held accountable for protecting revenue increases and balancing budgets. The financial superior is accountable for securing economical offsets caused by overspending and generating profits. They are vigorous in the budgeting process and control of funding. As a manager in charge of developing a variance report for a Vice President or CFO of an organization, every detail needs to be provided and nothing should be left out because this could throw off the variance, adding much confusion and uncertainty when developing a solution. The budget department manager communicates with other managers, and accounting departments concerning budget issues, financing, and concerns in the organizations departments. Sometimes situations arise when deviations provide that payroll salaries are higher than the planned financial outcome and supplies found to be lower than planned and budgeted outcomes. This is where a report comes in handy because it displays the payroll salaries in comparison to prior months of