Budget Cut

In: Business and Management

Submitted By pinkhick05
Words 1485
Pages 6
When making budget cuts or cutting cost in business it can be a very emotional and difficult task because in most cases it means informing employees that their position in the business is being closed. Cutting salaries and associated cost can cut out a major portion of the organization’s operating cost. Here is a case where Dr. Stephanie White, the Chief Administrator of the Uptown Clinic, is working on reducing the company budget for next year. Dr. Stephanie White needs make at least $94,000 in budget cuts but she needs to do this without effecting the operation of the organization. Here are three scenarios for Dr. Stephanie White to consider when making her budget decisions for the organization.
Scenario 1
In scenario one Dr. Stephanie White can reduce the budget by the minimum of $94,000. This is accomplished by the removal of one secretarial position, and two social worker positions; as well as reducing cost in other operating areas, such as cutting the custodial and security vendor contracts by only $1,000 each. Also by reducing the advertisement and promotion area to nearly half for next year, will allow Dr. Stephanie White to reduce her organizations cost by the $94,000 minimum. With scenario one Dr. Stephanie White is able to reduce the budget while maintain the organizations operations.
Program Area
Salaries: Current Cost Budget Plan Variance Administrator $60,000.00 $60,000.00 $0.00 Assistant $35,000.00 $35,000.00 $0.00 Secretary 1 $21,000.00 $0.00 $0.00 Secretary 2 $21,000.00 $0.00 $21,000.00 Supplies $35,000.00 $35,000.00 $0.00 Advertising and Promotion $9,000.00 $6,000.00 $3,000.00 Professional Meetings/ Dues $14,000.00 $9,000.00 $5,000.00
Purchased Services: Accounting and Billing $15,000.00 $15,000.00 $0.00 Custodial $13,000.00 $11,000.00 $2,000.00 Security $12,000.00 $10,000.00 $2,000.00…...

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