Variance Report - Essay Example

Variance Report Variance Report The key factors to consider when writing the variance report would be the determination of the trends in expenditure within the firm. I would provide a detailed report of the sequence of expenditure items in the financial periods leading up to the point in time when salaries were high and the supplies low. This report would include specific details about the extraneous expenditure items and the miscellaneous items that would have influenced the wage bill within the organization.

The determination of the impact of these items would provide a logical explanation of the causative factors within the expenditure bracket. Usually, structural factors or technical flaws could cause variations in the organization’s finances (Weygandt, Kieso, & Kimmel, 2010). This would be an important step because it would clarify on some of the changes that have taken place within the organization beyond the natural factors of change as understood within the expenditure framework of the hospital.

The second consideration would be to find the specific details of the supplies that took place within the financial period under question. I would then compare these details with a set of other details of the preceding financial periods with the intention of establishing the points of variations that determined the differences between the two periods. On this score, it would be more appropriate to consider the fact that some of the issues that affected the changes in the details of expenditure have some level of connection with internal changes within the organization.

On this score, it would be important to consider the impact of these changes as they relate within the two periods. Such information would help to clarify on the specific aspects of change that take place within the organization and which help in the clarification of the differences within salaries and supply details. Another important aspect to be considered within the determination of the changes in salaries figure is overspending. I would provide details of situations of overspending including the necessary factors for justifying such overspending.

For instance, I would provide details of certain organizational changes that would have had some significant impact on the companies salaries structure. For instance, promotion and salaries increments would be factored within the variance report with the objective of supplying some specific information about the causes of the irregularities within the salaries department. Such information would include percentages and graphic details of the impact of the changes on the salary structure. Usually, changes in the management structure within an organization will tend to carry significant impacts on the salaries and remuneration of an organization (Finkler, Ward, & Baker, 2007).

Promotions, rewards, and new enrollments will tend to bear some significant impact on the salaries of organization. In this regard, it will be appropriate to determine the causes of the variation in terms of the direct impact of the internal changes within the salary structures of the organization. Environmental factors and changes in the financial markets have significant impacts on the financial reports of most companies (Finkler, Kovner, & Jones, 2007). Details about changes in the salary scales within the hospital will be provided for the purposes of illustrating the overall effect of some specific changes such as enrollments on the salary structures of the organization.

Generally, the determination of the levels of salaries within an organization must require a comprehensive assessment of all related processes in order to establish the points of variation and the impact on other related figures in the accounting practices of the organization. In some cases, changes in the accounting practices could impact significantly on salaries and supplies within an organization. The variance report will also provide details on under spending. Sometimes, organizations will show significant variations due to under spending within certain departments.

For instance, cost-cutting measures within an organization will tend to result in instances of under spending. For instance, an organization may choose to recycle some items instead of purchasing new ones. The hospital may have chosen to lease certain services instead of purchasing some supplies from the market. When this happens, the levels of spending usually reduce leading to a similar reflection in the company’s financial records. As such, it would be important to collect sufficient information that provides light on the specific instances of under spending on supplies and the reasons behind the same.

Changes in the goals and strategies of an organization will also tend to affect the level of spending within the organization. Some of the issues that connect within the determination of variance are related to the structural changes that affect the manner in which organizations spend their finances. In the particular case of this hospital, it would be most appropriate to determine the aspect of change from the manner in which the organization coordinates certain activities that align with its long-term and short-term strategies.

As such, sections of the report will consist of the impact of strategy on the changes that were witnessed within the salaries and supplies department. Ultimately, the report will also contain any information on errors in accountancies or other mishaps that could have influenced the results in the financial report. References Finkler, S. A., Kovner, C. T., & Jones, C. B. (2007). Financial management for nurse managers and executives. Philadelphia, Pa: Saunders Elsevier. Finkler, S. A., Ward, D. M., & Baker, J. J. (2007).

Essentials of cost accounting for health care organizations. Sudbury, Mass: Jones and Bartlett Publishers. Weygandt, J. J., Kieso, D. E., & Kimmel, P. D. (2010). Managerial accounting: Tools for business decision making. Hoboken, NJ: Wiley.