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Key Points
- New clinics need the services
of a bookkeeper or accountant who can prepare financial statements
and be available to help clinic administrators and board members
learn how use them.
- Clinics should have
two separate budgets: (1) an operating budget and (2) a capital
budget. Projecting cash flow is another important component of the
budget-development process.
- The
operating budget estimates all the expenses involved in achieving
goals for the coming year, leaving some margin for the unexpected.
The capital budget looks at a time period of more than 1 year and
plans for the purchase of major capital assets such as equipment or
buildings.
- Cash
flow projections (projections of revenue and expenses) make it
possible to anticipate funding shortages.
- Financial
statements describe an organization’s
financial resources and what it has done with those resources.
- Three
statements should be prepared at the end of each financial year.
The first two also should be prepared periodically during the year
to monitor the budget. These statements are (1) a statement of activities,
(2) a statement of financial position, and (3) a statement of cash
flow.
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