Instructor’s #zManual #zfor #zFinancial #zManagement #zfor #zPublic, #zHealth, #zand #zNot-for-Profit
#zOrganizations1, 2E
INTRODUCTION
Chapter 1 #z TO
FINANCIAL
#z
MANAGEMEN
#z
T
Questions for Discussion
#z #z
1-1. Financial management is the subset of management that focuses on generating financial information
that can improve decisions. The decisions are oriented toward achieving the various goals of the
organization while maintaining a satisfactory financial situation. Financial management encompasses
the broad areas of accounting and finance.
1-2. In proprietary, or for-profit, organizations, an underlying goal is to maximize the wealth of the
owners of the organization.
1-3. In public service organizations, decisions are oriented toward achieving the various goals of the
organization while maintaining a satisfactory financial situation.
1-4. Accounting is a system for keeping track of the financial status of an organization and the financial
results of its activities. It has often been referred to as the language of business. The vocabulary
used by accounting is the language of nonbusiness organizations as well.
1-5. Accounting is subdivided into two major areas: managerial accounting and financial accounting.
Managerial accounting relates to generating any financial information that managers can use to
improve the future results of the organization. This includes techniques designed to generate any
financial data that might help managers make more effective decisions. Major aspects of managerial
accounting relate to making financial plans for the organization, implementing those plans, and then
working to ensure that the plans are achieved. Some examples of managerial accounting include
preparing annual operating budgets, generating information for use in making major investment
decisions, and providing the data needed to decide whether to buy or lease a major piece of
equipment. Financial accounting provides retrospective information. As events that have financial
implications occur they are recorded by the financial accounting system. From time to time (usually
monthly, quarterly, or annually), the recorded data are summarized and reported to interested users.
The users include both internal managers and people outside the organization. Those outsiders
include those who have lent or might lend money to the organization (creditors), those who might
sell things to the organization (called suppliers or vendors), and other interested parties. These
interested parties may include those with a particular interest in public service organizations, such as
regulators, legislators, and citizens. Financial reports provide information on the financial status of
the organization at a specific point in time, as well as reporting the past results of the organization‘s
operations (i.e., how well it has done from a financial viewpoint).
,Chapter #z3: #zAdditional #zBudgeting 3-2
#zConcepts
1-6. #zFinance #zfocuses #zon #zthe #zalternative #zsources #zand #zuses #zof #zthe #zorganization‘s #zfinancial
#zresources. #zObtaining #zfunds #zwhen #zneeded #zfrom #zappropriate #zsources #zand #zthe #zdeployment #zof
#zresources #zwithin #zthe #zorganization #zfall #zunder #zthis #zheading. #z In #zaddition, #zfinance #zinvolves #zthe
#zfinancial #zmarkets #z(such #zas #zstock #zand #zbond #zmarkets) #zthat #zprovide #za #zmeans #zto #zgenerating
#zfunds #zfor #zorganizations.
1-7. #z Yes. #zAchieving #zthe #zgoals #zof #zthe #zorganization #zrequires #zfinancial #zplanning. #zFinancial
#zmanagement #zprovides #zinformation #zfor #zmanagers #zto #zuse #zin #zmaking #ztheir #zdecisions. #zIt #zhelps
#zmanagers #zby #zproviding #zinformation #zon #zthe #zlikely #zfinancial #zimpact #zof #zeach #zproposed
#zalternative. #z It #zalso #zprovides #zinformation #zabout #zfinancial #zstability, #zefficiency, #zand
#zeffectiveness.
1-8. #z Clearly, #zwe #zmight #zexpect #zsome #zpublic #zservice #zorganizations #zthat #zare #zproprietary, #zsuch #zas
#zsome #zhospitals, #zto #zearn #zprofits. #zBut #zwhat #zabout #zother #zpublic #zservice #zorganizations #zsuch #zas
#zcharities? #zThey #zshould #zmake #za #zprofit #zas #zwell. #zProfits #zprovide #za #zsafety #zmargin #zagainst
#zunexpected #zcosts, #zprovide #zresources #zto #zreplace #zbuildings #zand #zequipment, #zand #zto #zexpand
#zand #zimprove #zservices.
1-9. # z Federal #zgovernment #z(see #ztext #zFigure #z1-1)
Individual #zincome #ztaxes
Social #zinsurance #ztaxes
Corporate #zincome #ztax
State #zand #zlocal #zgovernment #z(see #ztext #zFigure #z1-4)
Sales #zand #zgross #zreceipts #ztax
Federal #zgovernment
Property #ztaxes
Individual #zincome #ztaxes
Health #zsector #z(see #ztext #zFigure #z1-6)
Private #zinsurance
Medicare
Medicaid
Other #zgovernment #zprograms
Not-for-profit #zsector #z(see #ztext)
Private #zpayments #zfor #zgoods #zand #zservices
Government #zpayments #zfor #zgoods #zand #zservices
Donations
1-10. #zFederal #zgovernment #zspending #zexceeded #z$6 #ztrillion #zin #z2020 #zand #zstate #zand #zlocal #zgovernment
#zspending #zwas #zmore #zthan #z$3 #ztrillion #zin #z2018. # z In #zcontrast, #zthe #zGDP #zwas #z$21 #ztrillion #zin
#z2020. # z For #zmore #zup #zto #zdate #zinformation, #zexamine #zthe #zstatistical #ztables #zof #zthe #zmost #zrecent
#zEconomic #zReport #zof #zthe #zPresident, #zwhich #zis #zavailable #zonline.
1-11. #zThe #zreported #zsurplus #zincludes #zboth #zon #zand #zoff #zbudget #zitems. # z Social #zsecurity #ztaxes
#zrepresent #zan #zoff #zbudget # z item # z that # z until # z recently # z raised # z more # z revenue # z than # z was
# z spent # z on # z social # z security # z payments.
, Finkler, #zFinancial #zManagement #zfor #zPublic, #zHealth, #zand #zNot-for-Profit
#zOrganizations #z7e
© #zCQ #zPress, #z2023
The #zsurplus #zin #zthis #zarea #zoffset #zother #zgovernment #zlosses, #zand #zeven #zresulted #zin #zan #zoverall
#zsurplus #zfor #zthe #zfederal #zgovernment. # z This #zis #zno #zlonger #zthe #zcase, #zand, #zover #ztime, #ztrust #zfund
#zresources #zwill #zbe #zused #zup #zto #zprovide #zbenefits. #zAs #zthe #zfederal #zgovernment #zwill #znot #zhave
#zaccess #zto #zthe #zexcess #zresources #zfrom #zsocial #zsecurity, #zit #zwill #zhave #zto #zborrow #zand #zincrease #zthe
#ztotal #zlevel #zof #zfederal #zdebt, #zunless #zrevenues #zor #zspending #zare #zchanged.
1-12. #zSometimes #zgifts #zcome #zwith #zstrings #zattached. # z If #zthe #zconditions #zof #zthe #zgift #zcreate #za #zburden
#zthat #zthe #zorganization #zdoes #znot #zwant #zto #zaccept, #zor #zsomehow #zrequires #zthe #zorganization #zto
#zwork #zin #zopposition #zto #zits #zmission, #zit #zmight #zturn #zdown #zthe #zgift.
1-13. #zThe #zWorld #zBank #zhas #zdefined #zNGOs #zas #z"private #zorganizations #zthat #zpursue #zactivities #zto
#zrelieve #zsuffering, #zpromote #zthe #zinterests #zof #zthe #zpoor, #zprotect #zthe #zenvironment, #zprovide #zbasic
#zsocial #zservices, #zor #zundertake #zcommunity #zdevelopment" #z(World #zBank #zOperational #zDirective
#z14.70). # z NGOs #zare #zquite #zsimilar #zto #zthe #znot-for-profit #zorganizations. # z They #zare #zprimarily
#zmission-focused #zrather #zthan #zprofit- #zfocused. # z NGOs #zfall #zinto #zthree #zmain #zcategories:
#zcommunity-based, #znational, #zand #zinternational.
PLANNING
Chapter 2 #z
FOR
SUCCESS:
#z
BUDGETIN
#z
G
Questions for Discussion
#z #z
2-1. #z Planning #zhelps #zthe #zorganization #zby #zcausing #zits #zemployees #zto #zthink #zahead #zand #zanticipate
#zchange. #zThis #zis #zdone #zby #zestablishing #zspecific #zgoals #zand #zobjectives, #zcommunicating #zthose
#zobjectives #zto #zthe #zindividuals #zwho #zmust #zachieve #zthem, #zforecasting #zfuture #zevents,
#zdeveloping #zalternatives, #zselecting #zfrom #zamong #zalternatives, #zand #zcoordinating #zactivities. #zThe
#zactivities #zare #zsummarized #zin #za #zdocument #zcalled #za #zbudget. #zThe #zbudget #zdescribes #zwhat #zwe
#zhope #zto #zachieve #zand #zthe #zresources #zthat #zwill #zbe #zused #zto #zcarry #zout #zthe #zorganization‘s
#zactivities.
2-2. #z The #zorganization‘s #zmission #zrepresents #zits #zreason #zfor #zexistence. #zFor #zpublic, #zhealth, #zand
#znot-for- #zprofit #zorganizations, #zfinances #zoften #zbecome #za #zmeans #zto #zan #zend, #zrather #zthan #zthe
#zend #zitself. #zThis #zmission #zcannot #zsolely #zbe #zmaking #zprofits. #zFinancial #zmanagement #zmust
#zhelp #zbalance #zthe #zfocus #zon #zprofit #zwith #zthe #zpublic #zservice #zelements #zof #zthe #zorganization‘s
#zmission.
2-3. # zStrategic #zplans #ztranslate #zthe #zmission #zof #zthe #zorganization #zinto #zan #zapproach #zor #zset #zof
approaches #zthat #zwill #zbe #zused #zto #zaccomplish #zthe #zmission, #zand #za #zbroad #zset #zof #zgoals #zthat
#z
#zneed #zto #zbe #zattained #zto #zachieve #z the #z mission. #z Strategic #z plans #zset #z the #zorganization‘s #zlong-
, Chapter #z3: #zAdditional #zBudgeting 3-4
#zConcepts
term #zdirection. #zThey #zoften #zdo #z not
have #zspecific #zfinancial #ztargets. #zHowever, #zthey #zset #zthe #zstage #zfor #zthe #zspecific, #zdetailed
#zbudgets #zthat #zwill #zbe #zestablished #zto #zachieve #zthe #zorganization‘s #zgoals.
2-4. #z Whereas #zthe #zstrategic #zplan #zestablishes #zgoals, #zthe #zlong-range #zplan #zconsiders #zhow #zto
#zachieve #zthose #zgoals. #zLong-range #zplans #zestablish #zthe #zmajor #zactivities #zthat #zwill #zhave #zto #zbe
#zcarried #zout #zin #zthe #zcoming #zthree #zto #zfive #z years. #zThis #zprocess #zlinks #zthe #zstrategic #zplan #zto
#zthe #zday-to-day #zactivities #zof #zthe #zorganization. #zOrganizations #zthat #zdo #znot #zprepare #za #zlong-
range #zplan #zare #zoften #zcondemned #zto #zonly #zsustain #zcurrent #zactivities, #zat #zbest.
2-5. #z Budgets #zestablish #zthe #zamount #zof #zresources #zthat #zare #zavailable #zfor #zspecific #zactivities.
#zHowever, #zbudgets #zdo #znot #zmerely #zlimit #zthe #zresources #zthat #zcan #zbe #zspent. #zThey #zrepresent
#zthe #zdetailed #zplan #zthat #zsupports #zthe #zorganization‘s #zefforts #zto #zachieve #zits #zmission, #zand #zhelp
#zthe #zorganization #zdetermine #zand #zachieve #zits #zgoals #zand #zobjectives. #zThe #zbudgeting #zprocess #zis
#zone #zof #zexploring #zpossibilities. #zOrganizations #zdetermine #zwhat #zthings #zthey #zcan #zand #zcannot
#zdo. #zThey #zexamine #zalternatives #zand #zchoose #zthose #zthat #zare #zlikely #zto #zyield #zthe #zbest #zresults.
#zThey #zbecome #zattuned #zto #zpossible #zproblems #zand #zcan #zwork #zto #zfind #zsolutions. #zBudgeting
#zforces #zmanagers #zto #zthink #zahead, #zto #zhave #zclear #zexpectations #zagainst #zwhich #zto #zmeasure
#zperformance, #zand #zto #zcoordinate #zthe #zactivities #zof #zthe #zorganization #zso #zthat #zeveryone #zis
#zworking #ztoward #za #zcommon #zpurpose.
Budgets #zare #zalso #zused #zto #zcontrol #zresults. #zThat #zis, #zbudgets #znot #zonly #zcreate #zplans, #zbut
#zthey #zare #zalso #zused #zto #zhelp #zaccomplish #zthose #zplans. #zThis #zis #zdone #zby #zcomparing #zactual
#zresults #zto #zthe #zbudget. #zLooking #zat #zresults, #zwe #zcan #zassess #zwhat #zneeds #zto #zbe #zcorrected.
#zHow #zgood #za #zjob #zdid #zthe #zorganization‘s #zmanagement #zdo? #zHow #zwell #zdid #zthe #zorganization
#zitself #zdo? #zIn #zorder #zto #zevaluate #zperformance, #zone #zmust #zhave #za #zstandard #zor #zbenchmark #zto
#zcompare #zwith #zactual #zresults. #zThe #zbudget #zestablishes #zthe #zorganization‘s #zexpectations.
2-6. # z An #zorganization #zmay #zconsider #zundertaking #zan #zactivity #zthat #zwas #znot #zplanned #zfor #zwhen #zthe
#zannual #zbudget #zwas #zprepared. #zAt #zany #ztime #zan #zorganization #zcan #zprepare #za #zspecial #zbudget
#zfor #za #zspecific #zpurpose. #zAppropriate #zapproval #zshould #zbe #zobtained #zbefore #zimplementing #zthe
#zbudget.
2-7. # zAn #zorganization‘s #zbudgets #zare #zoften #zorganized #zinto #za #zstrategic #zplan, #zlong-range #zplan,
#zmaster #zbudget, #zand #zspecial #zpurpose #zbudgets.
2-8. # z Budgets #zpresent #zspecific, #zmeasurable #zgoals. #zAn #zindividual #zis #zmuch#zmore #zlikely#zto #zwork
#z efficiently #zif #zthere #zis #za #ztarget #zto #zshoot #zfor, #zassuming #zthat #zthe #ztarget #zis #znot #zunrealistic.
2-9. # z Most #zemployees #zwould #zprefer #zsalaries #zthat #zare #zsubstantially #zlarger #zthan #zthe #zamounts
#zthey #zare #zcurrently #zreceiving. #zOrganizations #zlack #zthe #zrevenues #zto #zpay #zfor #zthose #zraises. #zMost
#zmanagers #zwould #zlike #zmore #zoffice #zspace #zwith #znew #zfurniture #zand #zremodeled #zfacilities. #zThey
#zwould #zcertainly #zlike #zmore #zstaff #zto #zcarry #zout #zexisting #zfunctions. #zOrganizations #zmust #zmake
#zchoices #zconcerning #zhow #zto #zspend #ztheir #zlimited #zresources.
2-10. Depending #zon #zthe #zspecific #zorganization, #zthe #zvolume #zof #zservices #zprovided #zmay #zhave
#zplunged #zor #zsoared. # z This #zwould #zhave #zresulted #zin #zsubstantially #zmore #zor #zless #zrevenues
#zthan #zexpected. # z If #zrevenues #zplunged, #zthen #zwe #zwould #zhave #zhad #zmore #zstaff #zthan #zneeded,
#zwithout #zthe #zresources #zto #zpay
#zOrganizations1, 2E
INTRODUCTION
Chapter 1 #z TO
FINANCIAL
#z
MANAGEMEN
#z
T
Questions for Discussion
#z #z
1-1. Financial management is the subset of management that focuses on generating financial information
that can improve decisions. The decisions are oriented toward achieving the various goals of the
organization while maintaining a satisfactory financial situation. Financial management encompasses
the broad areas of accounting and finance.
1-2. In proprietary, or for-profit, organizations, an underlying goal is to maximize the wealth of the
owners of the organization.
1-3. In public service organizations, decisions are oriented toward achieving the various goals of the
organization while maintaining a satisfactory financial situation.
1-4. Accounting is a system for keeping track of the financial status of an organization and the financial
results of its activities. It has often been referred to as the language of business. The vocabulary
used by accounting is the language of nonbusiness organizations as well.
1-5. Accounting is subdivided into two major areas: managerial accounting and financial accounting.
Managerial accounting relates to generating any financial information that managers can use to
improve the future results of the organization. This includes techniques designed to generate any
financial data that might help managers make more effective decisions. Major aspects of managerial
accounting relate to making financial plans for the organization, implementing those plans, and then
working to ensure that the plans are achieved. Some examples of managerial accounting include
preparing annual operating budgets, generating information for use in making major investment
decisions, and providing the data needed to decide whether to buy or lease a major piece of
equipment. Financial accounting provides retrospective information. As events that have financial
implications occur they are recorded by the financial accounting system. From time to time (usually
monthly, quarterly, or annually), the recorded data are summarized and reported to interested users.
The users include both internal managers and people outside the organization. Those outsiders
include those who have lent or might lend money to the organization (creditors), those who might
sell things to the organization (called suppliers or vendors), and other interested parties. These
interested parties may include those with a particular interest in public service organizations, such as
regulators, legislators, and citizens. Financial reports provide information on the financial status of
the organization at a specific point in time, as well as reporting the past results of the organization‘s
operations (i.e., how well it has done from a financial viewpoint).
,Chapter #z3: #zAdditional #zBudgeting 3-2
#zConcepts
1-6. #zFinance #zfocuses #zon #zthe #zalternative #zsources #zand #zuses #zof #zthe #zorganization‘s #zfinancial
#zresources. #zObtaining #zfunds #zwhen #zneeded #zfrom #zappropriate #zsources #zand #zthe #zdeployment #zof
#zresources #zwithin #zthe #zorganization #zfall #zunder #zthis #zheading. #z In #zaddition, #zfinance #zinvolves #zthe
#zfinancial #zmarkets #z(such #zas #zstock #zand #zbond #zmarkets) #zthat #zprovide #za #zmeans #zto #zgenerating
#zfunds #zfor #zorganizations.
1-7. #z Yes. #zAchieving #zthe #zgoals #zof #zthe #zorganization #zrequires #zfinancial #zplanning. #zFinancial
#zmanagement #zprovides #zinformation #zfor #zmanagers #zto #zuse #zin #zmaking #ztheir #zdecisions. #zIt #zhelps
#zmanagers #zby #zproviding #zinformation #zon #zthe #zlikely #zfinancial #zimpact #zof #zeach #zproposed
#zalternative. #z It #zalso #zprovides #zinformation #zabout #zfinancial #zstability, #zefficiency, #zand
#zeffectiveness.
1-8. #z Clearly, #zwe #zmight #zexpect #zsome #zpublic #zservice #zorganizations #zthat #zare #zproprietary, #zsuch #zas
#zsome #zhospitals, #zto #zearn #zprofits. #zBut #zwhat #zabout #zother #zpublic #zservice #zorganizations #zsuch #zas
#zcharities? #zThey #zshould #zmake #za #zprofit #zas #zwell. #zProfits #zprovide #za #zsafety #zmargin #zagainst
#zunexpected #zcosts, #zprovide #zresources #zto #zreplace #zbuildings #zand #zequipment, #zand #zto #zexpand
#zand #zimprove #zservices.
1-9. # z Federal #zgovernment #z(see #ztext #zFigure #z1-1)
Individual #zincome #ztaxes
Social #zinsurance #ztaxes
Corporate #zincome #ztax
State #zand #zlocal #zgovernment #z(see #ztext #zFigure #z1-4)
Sales #zand #zgross #zreceipts #ztax
Federal #zgovernment
Property #ztaxes
Individual #zincome #ztaxes
Health #zsector #z(see #ztext #zFigure #z1-6)
Private #zinsurance
Medicare
Medicaid
Other #zgovernment #zprograms
Not-for-profit #zsector #z(see #ztext)
Private #zpayments #zfor #zgoods #zand #zservices
Government #zpayments #zfor #zgoods #zand #zservices
Donations
1-10. #zFederal #zgovernment #zspending #zexceeded #z$6 #ztrillion #zin #z2020 #zand #zstate #zand #zlocal #zgovernment
#zspending #zwas #zmore #zthan #z$3 #ztrillion #zin #z2018. # z In #zcontrast, #zthe #zGDP #zwas #z$21 #ztrillion #zin
#z2020. # z For #zmore #zup #zto #zdate #zinformation, #zexamine #zthe #zstatistical #ztables #zof #zthe #zmost #zrecent
#zEconomic #zReport #zof #zthe #zPresident, #zwhich #zis #zavailable #zonline.
1-11. #zThe #zreported #zsurplus #zincludes #zboth #zon #zand #zoff #zbudget #zitems. # z Social #zsecurity #ztaxes
#zrepresent #zan #zoff #zbudget # z item # z that # z until # z recently # z raised # z more # z revenue # z than # z was
# z spent # z on # z social # z security # z payments.
, Finkler, #zFinancial #zManagement #zfor #zPublic, #zHealth, #zand #zNot-for-Profit
#zOrganizations #z7e
© #zCQ #zPress, #z2023
The #zsurplus #zin #zthis #zarea #zoffset #zother #zgovernment #zlosses, #zand #zeven #zresulted #zin #zan #zoverall
#zsurplus #zfor #zthe #zfederal #zgovernment. # z This #zis #zno #zlonger #zthe #zcase, #zand, #zover #ztime, #ztrust #zfund
#zresources #zwill #zbe #zused #zup #zto #zprovide #zbenefits. #zAs #zthe #zfederal #zgovernment #zwill #znot #zhave
#zaccess #zto #zthe #zexcess #zresources #zfrom #zsocial #zsecurity, #zit #zwill #zhave #zto #zborrow #zand #zincrease #zthe
#ztotal #zlevel #zof #zfederal #zdebt, #zunless #zrevenues #zor #zspending #zare #zchanged.
1-12. #zSometimes #zgifts #zcome #zwith #zstrings #zattached. # z If #zthe #zconditions #zof #zthe #zgift #zcreate #za #zburden
#zthat #zthe #zorganization #zdoes #znot #zwant #zto #zaccept, #zor #zsomehow #zrequires #zthe #zorganization #zto
#zwork #zin #zopposition #zto #zits #zmission, #zit #zmight #zturn #zdown #zthe #zgift.
1-13. #zThe #zWorld #zBank #zhas #zdefined #zNGOs #zas #z"private #zorganizations #zthat #zpursue #zactivities #zto
#zrelieve #zsuffering, #zpromote #zthe #zinterests #zof #zthe #zpoor, #zprotect #zthe #zenvironment, #zprovide #zbasic
#zsocial #zservices, #zor #zundertake #zcommunity #zdevelopment" #z(World #zBank #zOperational #zDirective
#z14.70). # z NGOs #zare #zquite #zsimilar #zto #zthe #znot-for-profit #zorganizations. # z They #zare #zprimarily
#zmission-focused #zrather #zthan #zprofit- #zfocused. # z NGOs #zfall #zinto #zthree #zmain #zcategories:
#zcommunity-based, #znational, #zand #zinternational.
PLANNING
Chapter 2 #z
FOR
SUCCESS:
#z
BUDGETIN
#z
G
Questions for Discussion
#z #z
2-1. #z Planning #zhelps #zthe #zorganization #zby #zcausing #zits #zemployees #zto #zthink #zahead #zand #zanticipate
#zchange. #zThis #zis #zdone #zby #zestablishing #zspecific #zgoals #zand #zobjectives, #zcommunicating #zthose
#zobjectives #zto #zthe #zindividuals #zwho #zmust #zachieve #zthem, #zforecasting #zfuture #zevents,
#zdeveloping #zalternatives, #zselecting #zfrom #zamong #zalternatives, #zand #zcoordinating #zactivities. #zThe
#zactivities #zare #zsummarized #zin #za #zdocument #zcalled #za #zbudget. #zThe #zbudget #zdescribes #zwhat #zwe
#zhope #zto #zachieve #zand #zthe #zresources #zthat #zwill #zbe #zused #zto #zcarry #zout #zthe #zorganization‘s
#zactivities.
2-2. #z The #zorganization‘s #zmission #zrepresents #zits #zreason #zfor #zexistence. #zFor #zpublic, #zhealth, #zand
#znot-for- #zprofit #zorganizations, #zfinances #zoften #zbecome #za #zmeans #zto #zan #zend, #zrather #zthan #zthe
#zend #zitself. #zThis #zmission #zcannot #zsolely #zbe #zmaking #zprofits. #zFinancial #zmanagement #zmust
#zhelp #zbalance #zthe #zfocus #zon #zprofit #zwith #zthe #zpublic #zservice #zelements #zof #zthe #zorganization‘s
#zmission.
2-3. # zStrategic #zplans #ztranslate #zthe #zmission #zof #zthe #zorganization #zinto #zan #zapproach #zor #zset #zof
approaches #zthat #zwill #zbe #zused #zto #zaccomplish #zthe #zmission, #zand #za #zbroad #zset #zof #zgoals #zthat
#z
#zneed #zto #zbe #zattained #zto #zachieve #z the #z mission. #z Strategic #z plans #zset #z the #zorganization‘s #zlong-
, Chapter #z3: #zAdditional #zBudgeting 3-4
#zConcepts
term #zdirection. #zThey #zoften #zdo #z not
have #zspecific #zfinancial #ztargets. #zHowever, #zthey #zset #zthe #zstage #zfor #zthe #zspecific, #zdetailed
#zbudgets #zthat #zwill #zbe #zestablished #zto #zachieve #zthe #zorganization‘s #zgoals.
2-4. #z Whereas #zthe #zstrategic #zplan #zestablishes #zgoals, #zthe #zlong-range #zplan #zconsiders #zhow #zto
#zachieve #zthose #zgoals. #zLong-range #zplans #zestablish #zthe #zmajor #zactivities #zthat #zwill #zhave #zto #zbe
#zcarried #zout #zin #zthe #zcoming #zthree #zto #zfive #z years. #zThis #zprocess #zlinks #zthe #zstrategic #zplan #zto
#zthe #zday-to-day #zactivities #zof #zthe #zorganization. #zOrganizations #zthat #zdo #znot #zprepare #za #zlong-
range #zplan #zare #zoften #zcondemned #zto #zonly #zsustain #zcurrent #zactivities, #zat #zbest.
2-5. #z Budgets #zestablish #zthe #zamount #zof #zresources #zthat #zare #zavailable #zfor #zspecific #zactivities.
#zHowever, #zbudgets #zdo #znot #zmerely #zlimit #zthe #zresources #zthat #zcan #zbe #zspent. #zThey #zrepresent
#zthe #zdetailed #zplan #zthat #zsupports #zthe #zorganization‘s #zefforts #zto #zachieve #zits #zmission, #zand #zhelp
#zthe #zorganization #zdetermine #zand #zachieve #zits #zgoals #zand #zobjectives. #zThe #zbudgeting #zprocess #zis
#zone #zof #zexploring #zpossibilities. #zOrganizations #zdetermine #zwhat #zthings #zthey #zcan #zand #zcannot
#zdo. #zThey #zexamine #zalternatives #zand #zchoose #zthose #zthat #zare #zlikely #zto #zyield #zthe #zbest #zresults.
#zThey #zbecome #zattuned #zto #zpossible #zproblems #zand #zcan #zwork #zto #zfind #zsolutions. #zBudgeting
#zforces #zmanagers #zto #zthink #zahead, #zto #zhave #zclear #zexpectations #zagainst #zwhich #zto #zmeasure
#zperformance, #zand #zto #zcoordinate #zthe #zactivities #zof #zthe #zorganization #zso #zthat #zeveryone #zis
#zworking #ztoward #za #zcommon #zpurpose.
Budgets #zare #zalso #zused #zto #zcontrol #zresults. #zThat #zis, #zbudgets #znot #zonly #zcreate #zplans, #zbut
#zthey #zare #zalso #zused #zto #zhelp #zaccomplish #zthose #zplans. #zThis #zis #zdone #zby #zcomparing #zactual
#zresults #zto #zthe #zbudget. #zLooking #zat #zresults, #zwe #zcan #zassess #zwhat #zneeds #zto #zbe #zcorrected.
#zHow #zgood #za #zjob #zdid #zthe #zorganization‘s #zmanagement #zdo? #zHow #zwell #zdid #zthe #zorganization
#zitself #zdo? #zIn #zorder #zto #zevaluate #zperformance, #zone #zmust #zhave #za #zstandard #zor #zbenchmark #zto
#zcompare #zwith #zactual #zresults. #zThe #zbudget #zestablishes #zthe #zorganization‘s #zexpectations.
2-6. # z An #zorganization #zmay #zconsider #zundertaking #zan #zactivity #zthat #zwas #znot #zplanned #zfor #zwhen #zthe
#zannual #zbudget #zwas #zprepared. #zAt #zany #ztime #zan #zorganization #zcan #zprepare #za #zspecial #zbudget
#zfor #za #zspecific #zpurpose. #zAppropriate #zapproval #zshould #zbe #zobtained #zbefore #zimplementing #zthe
#zbudget.
2-7. # zAn #zorganization‘s #zbudgets #zare #zoften #zorganized #zinto #za #zstrategic #zplan, #zlong-range #zplan,
#zmaster #zbudget, #zand #zspecial #zpurpose #zbudgets.
2-8. # z Budgets #zpresent #zspecific, #zmeasurable #zgoals. #zAn #zindividual #zis #zmuch#zmore #zlikely#zto #zwork
#z efficiently #zif #zthere #zis #za #ztarget #zto #zshoot #zfor, #zassuming #zthat #zthe #ztarget #zis #znot #zunrealistic.
2-9. # z Most #zemployees #zwould #zprefer #zsalaries #zthat #zare #zsubstantially #zlarger #zthan #zthe #zamounts
#zthey #zare #zcurrently #zreceiving. #zOrganizations #zlack #zthe #zrevenues #zto #zpay #zfor #zthose #zraises. #zMost
#zmanagers #zwould #zlike #zmore #zoffice #zspace #zwith #znew #zfurniture #zand #zremodeled #zfacilities. #zThey
#zwould #zcertainly #zlike #zmore #zstaff #zto #zcarry #zout #zexisting #zfunctions. #zOrganizations #zmust #zmake
#zchoices #zconcerning #zhow #zto #zspend #ztheir #zlimited #zresources.
2-10. Depending #zon #zthe #zspecific #zorganization, #zthe #zvolume #zof #zservices #zprovided #zmay #zhave
#zplunged #zor #zsoared. # z This #zwould #zhave #zresulted #zin #zsubstantially #zmore #zor #zless #zrevenues
#zthan #zexpected. # z If #zrevenues #zplunged, #zthen #zwe #zwould #zhave #zhad #zmore #zstaff #zthan #zneeded,
#zwithout #zthe #zresources #zto #zpay
