Financial Management

Even in laboratories, there is a need for managing its financial aspects. The key objectives of Financial Management are:

1. Create wealth
2. Generate cash
3. Provide adequate return on investment bearing in mind the risks the business is taking and return of investment.

Lets first differentiate what are the TYPES OF BUDGETS:

Fund- sum of money its expenditures

Budget- forecast of expenditures necessary to perform anticipated workload over a designated period of time

3 separate budgets are developed during budget process

1. Operating budget- ongoing business concern
2. Capital Budget- new or replacement property, physical plant and equipment needs
3. Cash Budget- when operating and Capital is prepared, predicts cash flow in & out of organization.

• INCOME- consumption opportunity gained by an entity within a specified timeframe, monetary terms
• Expense- outflow of money to another person or group
• Personnel Cost- invariably constitutes the largest expenditures of hospital laboratory
• Overhand cash- arbitrary share of cost which rises because section does not exist in isolation