How Are the Strategic Goals “Rolled Out” to Operational Goals? What’s the Role of Cost Analysis and Forecasting?

The long-range financial plan  underpins many of these activities. It is a sophisticated, partially automated process that forecasts the HCO’s financial future. Sound financial management, “backstage” except to senior managers and the governing board, makes the LRFP come true.

Accounting activities provide cost reports, cost analysis, and cost models to evaluate alternative future scenarios. Accounting’s budget office manages the data for the goal-setting negotiations, coordinating a lengthy and complex process.

Audit activities protect all information—not simply financial information—from distortion and HCO assets against misuse and loss.

All of these activities are routinely measured and improved. The measures for “onstage” activities are a recent addition for most HCOs.

Is This Your HCO?

Cost reports come out on time. You reached agreement on the budget. The management letter from the auditor was clean. There’s money in the bank. The LRFP suggests that the HCO can keep its A+ rating and meet its capital needs.

So, should your CFO get a raise? Not just for that. Challenge her with these issues:

Get better performance. See:

How Are the Strategic Goals “Rolled Out” to Operational Goals?

What’s the Role of Cost Analysis and Forecasting?

Benchmark all the “overhead” costs, and get there. See:

How Can an HCO Control “Overhead” Costs?

Make sure capital expenditures deliver the planned return. See:

How Are Equipment and Program Opportunities Evaluated?