Chapter One
BUDGETING FOR PHYSICIAN PRACTICES
Marci S. Thomas
Objectives
This chapter will help the reader to
Understand the purposes and advantages of budgeting.
Describe the process of budgeting.
Prepare a budget for a physician practice.
Each year physician practices go through the all-important exercise of planning
for the coming year's activity. As more fully discussed in Chapter Sixteen, this
should be a joint activity between practice management and the physician-owners.
The budget is the tool that group practice managers use to translate the practice's
goals and objectives for the year into dollars. The budget also serves as a vehicle
to communicate financial targets to physician-owners and other stakeholders in
the practice.
To the wise practice manager the budget is not just a financial plan. It is also a
mechanism for monitoring and managing the activity of the practice on a periodic
basis. Some practices compare actual results to the budget on a monthly basis. Others
do it ...
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