MD Buyline shares ways you can prepare for your hospital capital budget. Learn four mistakes departments make when creating their medical equipment budget.
Preparing for Your Hospital Capital Budget Season l MD Buyline
Preparing for Your Hospital Capital Budget Season
How Can Your Prepare for Your New Budget Year?
As the budgeting season begins and hospitals prepare for the new fiscal year starting on July 1, it’s time to start thinking about a different way to budget for medical equipment.
On the following slides, learn four mistakes usually made during the budgeting process.
Mistake #1: The Wish List
End users will create a wish list of items they want and/or need and attach an inflated number for approval.
This normally happens because budgeting can be very time consuming and departments find it easier to rely on vendors for pricing.
Mistake #2: Outdated Data
When departments find themselves short on time and resources, it’s sometimes easier to use historical data or a ballpark number based on experience.
However, this robs you of valuable budgetary dollars.
Mistake #3: Relying on Vendors
When departments rely on vendors to provide a budgetary quote, they give vendors the upper hand.
Having vendors provide budgetary quotes is detrimental because it is likely, that in the future, you will want to try and negotiate a lower price, but now the sales representative now knows the number previously quoted and what should be in your hospital capital budget.
Mistake #4: Inflated Numbers
Some department heads believe that having an inflated number will benefit them if they get to use the dollars under budget for other items that are not on the wish list.
While this may be true sometimes, extra dollars often are reallocated to other departments and hospital needs or simply go unused.
Your finance team would also appreciate a more realistic number because part of their job is to properly and accurately prepare a cash flow forecast for future months and years.
So What Should You Do?
Your budgetary number should always be a number that you confidently believe will be near the purchase order amount.
•Be sure to include not only the cost of the equipment, but also accessories, software and add-ons needed for the equipment.
•Factor in a slight buffer for contingency purposes.
•Check market reports or talk with MD Buyline’sanalysts to determine if the equipment you are budgeting for is not being sunset or replaced by newer, more expensive models.
•Review any current leases that are coming up for expiration and budget a capital cash outlay if you are no longer going to lease that piece of equipment.
So What Should You Do? (continued)
•Use a buy vs. lease calculator to determine which option has more favorable terms for your department.
•Check MD Buyline’sDeals Database to research actual street prices for equipment including necessary components so that you can prepare a more realistic and accurate budget rather than relying on vendor’s budgetary quotes.
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