Managing Financial Resources in Business Assignment
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Added on 2019-12-17
Managing Financial Resources in Business Assignment
Added on 2019-12-17
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MANAGING FINANCIALRESOURCES
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Explanation of the principles and business control systems in a residential care............11.2 Identification of information for successfully manage financial resources......................31.3 Explanation of regulatory requirement for managing financial resources.......................31.4 Evaluation of computer software for manage financial resources...................................4TASK 2............................................................................................................................................72.1 Discussing different sources of income for new care home.............................................72.2 Factors affects to availability of financial resources........................................................72.3 Different types of budget which are applicable to residential care..................................82.4 Evaluation of decisions regarding expenditure for residential home.............................11TASK 3..........................................................................................................................................113.1 Cash budget for next three months and financial shortfalls...........................................113.2 Explanation in case of suspected fraud..........................................................................133.3 Suggestion and evaluation of methods for monitor and control budget.........................14TASK 4..........................................................................................................................................144.1 Identifying information for purpose of decision making in order to offer level of services..............................................................................................................................................144.2 Analysis of relationship among services, costs and expenditures..................................154.3 Evaluation of impact on individuals of financial considerations...................................164.4 Recommendations which are helpful to improve services.............................................17CONCLUSION..............................................................................................................................18REFERENCES..............................................................................................................................19
INTRODUCTIONResources are an integral part of an enterprise without this a business cannot run in amarket. It is necessary to manage financial and accounting informations in order to derivefinancial performance of the business. The present case is related to health and social care sectorwhere various principles and systems are described to effectively manage its financial resources.The report focuses on the role of planning, various sources of income as well as various factorsinfluence the financial resources in a positive and negative manner. It describes about budgetingand expenditures in terms of its importance in the health and social care business. The presentreport indicates several types of financial systems as well as various processes which help themanagement to manage the financial resources.TASK 11.1 Explanation of the principles and business control systems in a residential careFor each and every element, various principles and control systems are there to managethe business effectively. In order to this, costing also has several principles to manage financialresources which are given as below:Cause effect relationship: In a business every cost is related with particular reason andincurred to produce goods and services. (Swayne, Duncan and Ginter, 2012). Accordingto the principle cost must be passes from a function of organisation, if not then it will notconsider as a total cost of services. Cost is charged after its incurrence: A cost which is not incurred in production process,will not be charged from the customers. For example: in company wastage are born bythe production process which is normal loss for the firm but it is not considered in totalcost of production.Double entry principle: Every financial transaction had a double entry system whichhelps the management in reducing error at the time of preparing cost sheet. The system isimportant for preparing proper and correct cost sheet where all the costs are controlled bymanagers.Past cost should not include in future cost: As per the principle, past costs of thecompany are not to be included in the future cost (Conway, 2013). If firm will includepast cost in the future then it will lead to increase cost and price of products and services.1
Business control system to manage financial resources is such as follows:Procurement process: It is a system to obtain and purchase various equipments forbusiness to produce goods and services. Example of the process in health care business ispurchase of medical equipment which is a raw material for the firm. Management control system: It is a system for controlling and managing financialresources where management control costs as well as expenses. In present sector, Cost of one resident per monthAmount (in £)Average variable cost per month£1200Fixed cost per year£900000 per yearFixed cost per month£75000 per monthTotal cost per month£76200Number of beds65Cost of one resident per month£1172.31Procurement process: This is the process in which the company buys goods andservices as a raw material in order to produce finished products and services is identified as aprocurement process. In this, there are mainly three steps such as requirements of goods,tendering process and then selection with help of negotiation.Management control system (MCS): It is a process which is used by the health andsocial care companies to evaluate performance of the firm. With help of MCS, the company ishighly able to know performance of various kinds of organisational functions and resources.Different organisational resources are such as physical, human, production, operation, financialetc. and by this it able to know that all the resources are whether meet goals and objectives of thefirm or not.2
1.2 Identification of information for successfully manage financial resourcesThe management need various information to control and manage financial resourceswhich lead to increase profitability of the firm (Farmer and et.al., 2012). In healthcare business,various needed information are such as below:Direct costs: Costs which are directly incurred in the production process are known as adirect cost. In the healthcare business, examples of direct costs are purchase ofequipments, labour costs, laboratory testing etc.Indirect costs: A cost which not directly incurred in production process or to producegoods and services known as a indirect cost. . For example: rent of building, loss ofproductivity, administrative costs, depreciation on equipments etc.Variable costs: Variable costs are those which fluctuate with production volume in thebusiness. For example: therapeutic suppliers, wages to kitchen staff etc.Fixed costs: The costs are not varied with the output level are known as the fixed costs.Example of fixed cost in health and social care firm are such as salaries, maintenanceexpenses, utilities etc (Lee and Lam, 2012).Short term goals are those which are framed to achieve within short period while longterm goals are achieved in long time or once in a business. Long term goals of the firm areachieved with help of short term goal in a health care business. . Hence, with help of short termgoal, company is able to attain long term goal of business.1.3 Explanation of regulatory requirement for managing financial resourcesTo manage financial resources, there are various regulatory requirements for managers.The regulatory requirements are given as below:Meet tax deadlines: When management fulfils its tax obligation and before deadline thenit is able to manage finance very properly and effectively. Keep up-to-date accounting records: Recording all accounting and financial transactionson daily basis by which financial resources can be management effectively (Ledgerwood,Earne and Nelson, 2013). In health and social care business, daily transactions are such asmedicines, patients admitted, drugs etc. are examples of day to day accounting records.3
Day-to-day costs: Cost is sensitive factor of a business and company need to analyze dayto day costs which help to manage resources efficiently. It is key requirement of themanagement to analyze and evaluate total costs by which financial resources aremanaged.Develop a system of risk management: To manage financial resources, the firm have todevelop proper and effective system to manage risks.Adopt fair pricing policy: Fair prices of products and services are help to increase morenumber of consumers by which financial resources will enhance. (Lodha, 2016). Thecompany's financial performance will increase which will enhance the financialresources. Hence, company have to adopt fair policies of pricing by which financialresources can be managed in an effective manner.Internal Auditing: Internal auditing is done at the company level where day-to-day transactionsare evaluated. All the rules and regulations of internal audit are set out by the organisations andfor that company are required to pay cost. Main purpose to conduct the audit is to analyse,evaluate and improve risk management of the company which can enhance performance level.External Auditing: External auditing is conducted by the external party that is government and itis done on an annual basis. The auditing system is conducted for the purpose of statutory. . Asper the auditing, all the rules and regulation of government required to be followed by theorganisation (Caplan, 2014).1.4 Evaluation of computer software for manage financial resourcesComputer software plays a significant role to run the company smoothly and manage thebusiness effectively. To manage financial resources, there are various software such asmanagement control system, enterprise resources planning etc. The management is able toenhance financial performance by managing resources in an effective manner with help of thesoftware. Various advantages and drawbacks of computer software as given as below:Advantages:Computer software are helpful to record daily financial transactions in a simple way.It is helpful to prepare proper plan to run business smoothly. 4
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