finance/management assignment


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Pro Forma Explanation Material There are two types of costs to consider planning the HIT program pro forma. These two types of costs are capital costs and operating costs. While the accounting definition of these costs varies depending upon the organization, the general definition of these costs are capital costs (being one-time expenses) and operational costs (being ongoing or reoccurring cost of the program). The HIT Program Pro Forma Template provides the opportunity to estimate both capital and operating costs for an HIT program. The following information is a description of each line item on the HIT Program Pro Forma Template. Keep in mind that as you are working through these costs on a year-by-year basis that you are working diligently with teams of stakeholders to best estimates these costs. Therefore, your cost estimates will be generally more accurate for the first fiscal year and second fiscal year of the program and be more vague as the fiscal years of the project go out into subsequent years. For this reason, the HIT program pro forma is updated often, based on new information and changes in the program environment. Capital costs generally consist of the following categories: consultative services, implementation salaries, database software, hardware costs, network costs, and other licensed software costs. The following is a description of the meaning of each of these line item categories on the HIT Program Pro Forma Template. Keep in mind that if your organization organizes capital costs in a different way or asks you to capitalize costs under your program that fall outside of these categories you can add additional rows to your program pro forma file. Consulting services vendor or third-party: Often the help of external consultants from either the HIT vendor or another third-party are used in order to implement systems. Often, these costs are significant at the …