Tip of the Week: Capital Budgeting Can Help Reconcile Conflicting Goals

Pharmacy Times
Shane Desselle, RPh, PhD, FAPhA
April 6, 2022

Budgeting is among the management topics you will not often find in the pharmacy, because many budgeting processes are proprietary in nature and assumed to be undertaken only by corporate executives. However, budgeting is critically important.


All of us perform some level of budgeting daily regarding our own cash flows and expected expenditures. After all, a budget is essentially a detailed plan expressed in quantitative terms (dollars) that specifies how resources will be acquired and used during a specified period. This is especially salient for pharmacy owners, but understanding the principles of planning and budgeting are useful for any pharmacist, particularly one who is in or aspires to be in a managerial role.

The process of budgeting involves facilitating communication and coordination, allocating resources, controlling profit and operations, evaluating performance, and providing incentives to perform. There are different types of budgets, including revolving budgets, sales revenue budgets, cash budgets, operational budgets, and capital budgets.

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