Review your financial performance and plan for the new year
As we approach the end of the financial year, I’d like to talk to you about the importance of reviewing your past performance and planning for the new financial year.
The annual audit of a corporate organisation’s finances is a statutory requirement. It’s also an important opportunity for aged care boards to review their past performance. This includes looking at how their financial strategy for the year ahead will help them to improve the safety and quality of their services.
Aged care providers work in a complex environment. The demands and expectations of older people and their families are regularly changing. By reviewing financial results and other key performance indicators, aged care boards can make informed decisions. It also reduces risks and encourages transparency and accountability.
Monitoring financial performance means the board can assess the organisation's financial stability, liquidity and solvency. By identifying possible financial challenges early, the board can act quickly and fix any issues. This allows them to work in a safe and sustainable way.
Regularly evaluating your organisation’s performance helps you to assess your strengths, weaknesses, opportunities and threats.
Benefits of an annual review
An effective annual review process gives you information to help you budget and forecast. By analysing past financial and operational data, you can develop realistic budgets and forecasts for the coming year. This process helps you:
- allocate resources
- set achievable targets
- identify possible areas of overspending or underinvestment.
A well-informed budgeting process:
- improves the chances of being financially stable and of long-term success
- supports your strategic planning. It gives you a clear understanding of the organisation’s performance, operating landscape and market dynamics. Organisations can use this information to reassess their strategic priorities, set new objectives and adjust their operating model
- helps you identify and reduce risks that can affect your financial and operational performance. By doing a thorough review, organisations can identify internal and external issues that may threaten their success. This includes market volatility, regulatory changes, competitive pressures, or operational vulnerabilities
- encourages a culture of continuous improvement in the organisation.
By identifying areas where you can improve and fixing them, you can:
- boost your processes
- increase efficiency
- drive innovation.
Planning for the new year
You can use the findings of an annual review to plan for the new financial year. Planning allows you to tailor your services to the needs of the people you provide care for. This involves understanding the demographic trends, health conditions, and preferences of people who are likely to use your services. Through assessments and analysis, you can identify gaps in your services and develop strategies to fill them. For example, a review will help you identify areas where you need specialised training for staff to meet the needs of people in your care. Planning also allows providers to stay ahead of regulatory requirements and industry standards.
Ultimately, strong and regular review of performance to support planning is essential. This is particularly important in the aged care sector, where governing bodies are responsible for making strategic decisions that can affect the safety and quality of care a person receives.
Until next time….
Peter Edwards
Executive Director, Compliance Management Group
