Why a budget is important for aged care facilities
June 19, 2014 | Aged Care Finance
Budgeting is essential in any industry, especially in the growing aged care sector. A good budget can allow accurate predictions to be made, keep the facility profitable and build a strong foundation for any future facility expansion or purchases.
Budgeting is simply good business, and as a result it's important to understand why a strong budget is needed.
Setting clear targets
For any business, clear targets are the best way to ensure that both short and long term goals are being met. Well-designed budgets allow a business estimate revenue, plan for upcoming expenditures and map out a spending strategy.
Budget allocations for facilities and equipment
Large expenses can take an aged care facility by surprise, especially new equipment purchases or facility expansions. A budget can serve as a roadmap here, where capital can be saved on a regular basis in a dedicate account.
This ensures that the necessary funding is on hand for expanding operations.
Ensuring flexibility and redundancy
It's a certainty that the business budget will need to change and some point after creation, and this why some flexibility should be built in. Whether it's additional capital saved for a change of plans, or maybe a more restrained secondary budget to fall back on, flexibility and redundancy are highly important.
Generating funding security
Funding is constantly a difficult area for aged care facilities to ensure, but there are avenues for generating funding security. ACFI optimisation is one of the best ways, and involves a comprehensive education process for aged care staff.
ACFI education and optimisation should be considered, especially as resident numbers continue to swell over the next few years.
What do you think are the biggest opportunities for success in the aged care industry today? Please contact us and let us know!