In the budgeting framework, which step involves evaluating financial performance?

In the budgeting framework, monitoring costs is crucial for evaluating financial performance. This step involves regularly tracking and analyzing the actual financial data against the budgeted figures. By closely examining expenses and revenues, an organization can assess whether it is operating effectively and within financial limits. Monitoring costs helps identify variances – differences between what was expected and what actually occurred. These variances can indicate areas where financial performance is lacking and require attention.

Effective monitoring allows healthcare management to make informed decisions, making necessary adjustments to budgets or operations to improve financial outcomes. This ongoing evaluation is integral to effective financial management, as it ensures the practice remains aligned with its financial goals and can respond proactively to any issues that arise.