Managing Finance in Health and Social Care: Importance, Financial Software, Budgetary Control, and Investment Appraisal Techniques

MANAGING FINANCE IN
THE HEALTH AND
SOCIAL CARE

Table of Contents
TASK-1............................................................................................................................................3
INTRODUCTION...........................................................................................................................3
Importance of accounting and finance management...................................................................3
Financial software and accounting function................................................................................3
Use of financial ratio in Anchor Trust.........................................................................................4
Long and short term finance need...............................................................................................5
Sources of finance........................................................................................................................5
Process of budgetary control and revenue management..............................................................6
Double entry book keeping..........................................................................................................6
CONCLUSION................................................................................................................................7
TASK 2- BUSIESS REPORT.........................................................................................................7
INTRODUCTION...........................................................................................................................7
Interpretation of organisational budgets in Anchor Hanover Group...........................................7
Evaluation of capital expenditures and investment projects using different investment
appraisal techniques.....................................................................................................................8
Recommendation for financial management.............................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

TASK-1
INTRODUCTION
Accounting and finance are one of the major function with respect to an organization that
enable the firm to make recording, analysing and measuring the performance along with
deploying adequate finance within the different departments. Under this task, the importance of
accounting and finance function along with ratio analysis and fund arrangement will be
discussed.
Importance of accounting and finance management
Accounting refers to the systematic recording, analysing along with interpreting the
financial statement and information (Ibrahimova-Guluzada, 2017).With the aspect of accounting
business keep a track of records of its operations.
Finance means the funds and credit that is being employed in the business (Pretorius,
2020).
Accounting and finance is one of the major part with respect to health and social care.
This is because with the aspect of these functions, Anchor Trust can along with performing its
operation can also able to establish a controlling procedure. With the performance of accounting
function, Anchor Trust can make a track of its income and expenditure. Likewise, finance
function enables the organization to make efficient deployment of funds in the right place. Being
an organization that perform its functions at broader scale, it is thus very important for the
Anchor trust that it can keep a record as well as keep a track over its finance activities. And with
the aspect of accounting and finance function this is being executed. As finance is the blood of
every organization and in case of anchor Trust too with the efficient distribution of finance
across various department it can perform its operations efficiently.
Financial software and accounting function
An application of financial software within the context of Anchor Trust plays an important
role in terms of tracking of financial information along with generation of financial statement.
This means with the enabling of accounting software an organization can make preparation of its
financial statements that could assist it in measuring its financial information (Oladele, 2020).
Financial software also makes the accounting of Anchor Trust more efficient and easy so that

tracking over the finance would become very easy. With regard to Anchor Trust, financial
software also plays an important role with respect to assisting the organization towards decision
taking i.e. it make the analysis and comparison of financial statement easy and thereby enable the
organization to take the most appropriate action.
As financial software are the computer programme that assist the Anchor Trust in
recording the transaction along with keeping recording of it. With the installation and
implementation of financial software Anchor Trust can meet its accounting needs along with
keeping a records over its money and fund movement i.e. with the aspect of financial transaction
the movement of funds would be easy to observe and accordingly corrective actions can also be
assisted.
Use of financial ratio in Anchor Trust
Financial ratio are the interpretation of financial performance of the company with respect
to the analysis of financial statement. There are majorly 5 financial ratios in the context of
company that depict its financial performance:
Liquidity ratio:
These ratio shows the liquidity i.e. ability of the company with regard to making short
term repayment of its liability (Rashid, 2018). In case of Anchor Trust its liquidity ratio i.e.
current assets/current liability is 2.37 (295201/124519= 2.07) in 2020 while it was 1.183
(397914/217396= 1.52) in 2021 (Annual Report & Financial Statements, 2021). This shows that
the liquidity ratio of the Anchor Trust is declining. Hence it would be right to state that the
company is not having enough cash or funds in order to make repayment of short term liability.
Debt equity ratio:
This ratio shows the inculcation of debt and equity within the capital structure of the
company. This need to be balance because a rise in any of the aspect is having a direct and major
impact over the company (Nuryani and Sunarsi, 2020). With regard to Anchor Trust the debt
equity ratio (Total liability/shareholder’s equity) is 1.63 (961664/587804) in 2020 which become
1.79 (1013572/565937). This means that the company’s debt equity ratio is showing adverse
results because the amount of debt is rising with compared to equity. A rise in debt structure in
the company would lead to raise in the expenditure in terms of making payment of interest. This
shows that the performance of Anchor trust is not adequate in regards to this ratio.