Capital equipment budgeting: changing an art to a science.

Abstract

In today's integrated healthcare environment, one component of financial management remains antiquated in many facilities--the budgeting process for capital equipment. Many institutions budget for capital equipment based upon individual departmental wish lists and hopeful dreams. These highly inefficient practices are being replaced with automated systems that create departmental data exchanges, utilization analyses, life-cycle cost justifications and enterprise-wide budget roll-ups. This article shows how automated capital budgeting systems help reduce capital spending by identifying utilization trends, providing for demand matching, and maintaining cost control data which enable the financial manager or asset steward to analyze and justify appropriate acquisitions.