Healthcare leaders responsible and accountable for the financial performance of a business enterprise are in an environment of increasing pressure on operating margins. Developing the operating budget is a critical decision-making process that provides the plan for managing the financial and operating performance of the business enterprise. When there is a variance between the prescribed goals of the healthcare provider organization and the actual financial and operating performance, leaders are responsible for assessing and diagnosing the root cause or causes in order to take the appropriate, deliberate, and decisive corrective action. This chapter helps the reader recognize the different types of financial and operating variances and their causes; apply the financial pathway step-by-step process to identify and prioritize financial and operating variances; and use the corrective action plan and monthly operations review approaches to promote accountability, improve financial acumen, and support leaders’ achieving their financial performance goals.