Financial Resource Management in Healthcare (Care South Group)

This report, focusing on Care South Group, a healthcare corporation, delves into the crucial aspects of financial resource management within the health and social care sector. It meticulously examines the principles of costing, including stakeholder engagement and data accuracy, and explores various sources of income, such as patient fees and investments, while also addressing the factors influencing financial resources like reputation and government funding. The report further analyzes budget expenditure, encompassing overhead, resource, and human resource budgets, and details decision-making processes related to expenditure, including cost-benefit analysis and prioritization. Regulatory requirements, including those from the Care Quality Commission and GAAP, are discussed, alongside the financial accounting and cost control systems employed. Finally, the report addresses the management of financial shortfalls, emphasizing the importance of effective financial activity management. The report provides a comprehensive overview of financial management strategies within the health and social care setting.

MANAGING FINANCIAL
RESOURCES IN
HEALTH AND SOCIAL
CARE

Table of Contents
INTRODUCTION...........................................................................................................................1
REFERENCES................................................................................................................................2

INTRODUCTION
Financial resources means proper planing, organizing, directing and controlling all
activities that related with finance. In organization financial management play important role
because through this they make strategy for proper utilization of resources and provide better
services and produce quality product and services with low and cheap cost (MacLeod, 2017).
Care south group is a health care corporation and it was founded in 1995 and headquarter
situated in Augusta, Georgia and USA. That provide home care services to patients. This report
will be cover principle of costing, sources of income, factors that affect resources, budget
expenditure and effects of finance affect service user.
Task 1
1.1 principles of costing.
Costing is a process of record all original cost of assets, liabilities and investment. It is use by
care south for manage all information of finance and it helps in operate organization effectively.
It also helps in reduce cost and control for increase profit. Organization compares actual cost and
expected cost and then follow following principles for control.
Stakeholder engagement :- this principle helps in control cost of health and social care
organization because through this care south group engaged all stakeholders that direct and
indirectly relate with organization so it helps in control cost because it includes all stakeholders
and include cost so that they manage and control for reduce cost and increase profit.
Data accuracy :- this principle also use by care south corporation because through this
they record accurate data and it helps in get fair result so it makes easy to evaluate real cost and
helps in cost control system. For this they use journal entries, ledger, trial balance according to
staying patients and clinical staff and then take decision.
Business control system is very important for care south because through this system
organization focus on achieve objective and goal. It includes evaluation of staff and analyze their
performance and duty that they do work proper or not. After evaluation managers and owners of
health and social care system make rules, regulations and standard (Carvalho, Meier and Wang,
2016). Following principles use for business control :-
Materiality :- this principle helps in control of business and analyze that employees and
staff and cost give proper and expected return or not so after that managers and owners of care
south group make rules and regulation for manage and control work for increase profitability.
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Consistency :- through this principle all department of organization measure their cost so
it makes easy to evaluate and control. Because all department evaluate their own cost and record
originally.
1.2 information need for manage finance.
Many types of information need for health and social care organization for manage
financial resources. Care south group has need financial resources for payment of liabilities like
payment of staff, purchase material, equipment, medicines and bed. So all things are managed
through finance and for meet objective they have to proper plan acre of their resources. It
receives revenues from fee of patients and other revenues so information of finance has to keep
accurately and transparent that helps in manage finance.
It also has to make plan for face risk that possible and may occur in future suddenly. So
this risk includes in health and social care like neglect to patient, failure of operation and death of
patient during treatment that is risk for care south. So information include like preparation of
budgets, auditing, administrative expenditure, financial cost and renovation of buildings and
equipment needs in manage finance. All these records and information helps in manage finance
(Popova, 2016).
1.3 Regulatory requirement for manage finance.
In health and social care many departments and authorities make rules and regulations for
proper management of financial resources that reduce cost and provide better services to patients
and care of safety to them. Following authorities like :-
Care quality commission :- it is a authority that inspect to health and social care
organizations. According to inspection it makes rules and regulation for provide better services
and aware to peoples for get better service about their health. So people also has choice for take
health and social service center.
Health sector regulate monitor :- this department also has authority to monitor and
regulate health and social care and issue license to organization that provide both services like
health and social. This authority mainly focus on patients safety, determine price and support to
patient and also reduce and prevent their problem that they face due to lack of finance.
GAAP :- this authority is includes in accounting standard and regulation of this authority
use by health and social care organization like care south for record accurate data and report of
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financial information of organization so it helps in keep fair and accurate data and easy to
evaluate for make strategy and plan that helps in manage finance.
1.4 systems of manage financial resources.
Many methods are use by care south for manage finance and control to all finance that include
expenditure and revenue. So care south use following system for manage finance resources
effectively:-
Financial accounting system :- through this system managers and owner of care south
health and social care organization evaluate all financial books and records. Management of
finance is very important for improve business and it is only possible through sound financial
accounting. Because it keeps all records and transaction related to revenue and expenses.
Costs control system :- this system very helpful for care south because through this
system cost control possible. It evaluates all costs and through this organization evaluate and
compare expected cost and incurred cost. Organization easily trace their cost and inspect all
things and change according to need for reduce cost and manage (Fong and Tong, 2015).
Payment system :- this system important for health and social care because through this
it evaluates liabilities of organization and evaluate pending payments and available funds. After
that they make decision for reduce cost and liability.
Task 2
2.1 diverse source of income.
Many types of source of income are use by health and social care organizations. All
sources are use by care south for increase income and sufficient funds collect for expenses. So
for increase revenue it provides different offers to their clients for attract. Source of income like
fees that they collect from patients. So they earn revenues from different types of patients like
mental disable, physical disable and young people home care services.
Care south group also has extra income that they earn from investment for increase their
funding. So it invests capital in different sectors and get earn more income from interest. It helps
in improve and develop health and social care services to patients. Organization use for pay to
their liability.
One more source of income is sale shares and equity to peoples and in market it also
increases capital of organization and it also provides home care services post hospitalization. All
things use by care south in improve their services and provide better treatment with safety.
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Young people residential service provide by care south that main purpose is reach to
children on right path and care to them it mainly generates income. Adult learning disabilities is
source of income because it cares to adult that they suffering from disability.
2.2 factors that influence of financial resources.
Many factors are present in nearby of care south that direct affect to organization's financial
resources. So income and profit reduce from these all factors and organization can't provide
proper services to patients. Following factors like :-
Reputation :- reputation of organization is play main role in fiance because if image of
organization not establish well in market so customer's attraction is reduced and customers are
resources of finance. Positive image of organization helps in increase revenues and investor
invest their capital in organization bases on reputation (Ahn, 2017).
Creditworthiness :- it is a factor that affect to care south group. It means that present
and future ability of organization to pay loans and credits. So it also includes all history of
organization that they make payment timely or not. If creditworthiness is good so lenders attract
from it and give loan and finance.
Size of organization :- it is a main factor that influence financial resources of health and
social care because if organization size is large that its balance sheet also large and these things
helps in borrow money and it increases their capacity. If size of business is small so institutions
of finance do not lend money that effect on resources.
Government funding policies :- in health and social care system government give funds
to organizations for improve and develop their services. It provides funds according to policy of
government. So it also a factor that affect to care south financial resources. So all these factors
influence to financial resources and it creates barriers in organization that decrease revenue.
2.3 budget expenditure in health and social care.
Budget is very important for health and social care organization and care south group.
Many types of budget make by them for operate their business. It is make for specific time
period and for expense of specific amount. Budget is a financial plan and it is make very
effectively and efficiently. Through rights organization use limited capital and expenditure and
earn revenue (Gagarina, 2017). Following budgets are use by organization :-
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Overhead budget :- this budget is important in manage income and make balance
between income and expenses. That means care south make estimate to pay all expenditure
through income and income is sufficient or not for payment of liability.
Resources budget :- it is very important and common budget for organization and care
south use this budget for adopt resources that helps in increase revenue of organization. It also
helps in make estimate that spend income and increase resources that includes machinery and
equipment and other.
Human resource budget :- this budget is use for hire and manage manpower because it
is very important asset that increase revenue in care south group. So for these things and hire of
skilled and efficient employees they have to make budget for training, selection and recruitment
for increase and improve revenue (Berg, 2016).
2.4 decision about expenditure are made within health and social care.
Organization has to take decision about expenses and for achieve result according to
strategy. Cost benefit analysis helps in identify and evaluate that organization earn benefits
according to expenditure or not because return is very important against of expenditure. So it
helpful for compare revenue and expenditure. Organization spent money in any project after
evaluation that it give return or not.
It also evaluates and analyze environment that direct affect to organization performance
and revenue so it uses tool like SWOT and PESTLE analysis for evaluate condition. It evaluates
these things before invest money and invest those place where revenue is more than cost.
Decision taken in health and social care related to expenditure so organization analyze
and choose priority in all activities that means it decides important work and expense on it and
make budget because it spent money on any work so it makes budget according to department
and work than they start business. It focuses and purpose behind decision of expenditure about
increase profit and attraction of patients (Spencer, 2018).
TASK 3
3.1 Explaining management of financial shortfall
Financial shortfall is a major problem that can be faced by any business organisation.
Excessive fall of finance may result in failing an organisation to meet its financial requirement
that can affect its smooth running of business. Management of financial shortfall requires a
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proper analysis of the overall financial system of the company, evaluating requirement of
financial resources by the firm and maintaining the resources accordingly.
Caresouth Group should develop effective management of the financial activities as it
would help the company in maintaining sufficient amount of liquidity as to pay its debts.
Insufficient financial management can also result in enhancing the overall cost of company in
form of increase in interest and penalties amount due to late payment (Arnaboldi and et.al.,
2015). In this regard, financial management should be put into the priority list by the company.
Further, Caresouth Group can manage or maintain sufficient cash by issuing shares to
shareholders or by issue dividend. Further, managers can manage it by developing appropriate
policies for sales and purchase of goods in cash or on credit. It could be consider as the best way
of managing the financial shortfall in the firm.
With the help of adopting the best financial shortfall management strategies, managers of
Caresouth Group can prevent it from insufficiency of finance. Further, it can also enhance the
ability of business in meeting its all the obligations.
3.2 Explaining action to be taken at the time of suspected fraud
In order to prevent a company from fraud and other suspected activities, each country
develops various laws and regulations. Further, each company should also develop its strategies
and strict policies so that no employee or member of the company could perform any activity for
making fraud and gain inappropriate money from the business as well.
Fraud can be made in various ways in the Caresouth Group. For example, developing
false payroll of salaries, abusing the position held by any of member of company.
Misrepresentation of any of the transaction in the books of firm, manipulating any financial
activity and gain personal income from it rather than including it in company's books of
accounts, etc.
Caresouth Group should develop various management policies and strict rules for all
these suspected activities of the business. As enhancement of these activities in the business can
lead in suffering a huge loss by the company (Horton and Farnham, 2015). In case of happening
any of the fraudulent act, Caresouth Group should make an indepth inquiry of overall
transaction, should detect the suspected members of firm. Further, it should take strict action
towards them like suspension, higher amount of penalties, deduction from salary, etc.
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it would help the group in preventing its whole business from the fraud and other
suspected activities.
3.3 Evaluating arrangement of budget monitoring in health and social care organisation
Schedule for expected cash collection
particular amount
collection from debtors of august 24000
collection from debtors of September 8000
cash sales 7400
total collection 39400
Schedule for expected cash dispersion for inventory
particular amount
purchase of inventory 5000
Payment to creditors for inventory of august 16000
Total dispersion of cash 21000
Cash budget of Caresouth Group for the month of September
Particular Amount (September)
Opening cash 11000
Cash sales 7400
Collection from debtors 38000
Less: Purchase 5000
Payment to creditors 16000
Selling and distribution expenses 13000
Purchase of equipment 18000
Utility expenses paid 3000
Add: Closing cash balance 5000
Net cash and cash equivalent 6400
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Interpretation
From the analysis of above cash budget in can be interpret that company would have
sound financial position. Company would gain appropriate amount of cash as to repay its current
debts.
Budget monitoring arrangement
it is a process that needs to be performed continuously by a company. Development of
budget monitoring arrangement in the Caresouth group would help the company in determining
the need of cash and cash equivalent with the business within a specific period. Further, it will
also help in detecting various areas from which it could generate cash and other financial
resources for the company (Kelly, 2015). Through which managers would be able to develop
their strategies in more effective manner.
In this regard, it can be evaluated that development of appropriate arrangement of budget
monitoring will help the Caresouth Group in strengthening its financial plans.
TASK 4
4.1 Identifying information required for making financial decisions relating to health and social
care services
Taking appropriate financial decision is required by each business organisation.
Sustainability of a company majorly depends upon the management of financial activities and
maintenance of financial resources of the company.
For the purpose of taking the most appropriate decisions for the business, Caresouth
group needs to gain all the relevant information about the company. Financial resources includes
cash, assets, bank, liabilities, etc. while taking financial decisions, its managers needs to develop
strategies and plans for each of these elements.
In this order, Caresouth group should provide appropriate budgetary reports, information
relating to flow of each assets, requirement of inventories within a specific period etc. all these
information will help the company in detecting the need of finance within a specific time period.
Further, it should also provide information about usage of cash and cash equivalent along with
various sources through which it can gain finance for running of business.
Moreover, by gaining information, Caresouth group's managers would be able analyse
and determine various financial situations of the company (Lægreid and et.al., 2016). It would
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result in enhancement efficiency of managers in developing effective strategies for the business
and taking appropriate decisions relating to financial activity of the business as well.
4.2 Analysing relationship between health and social care services delivered, cost and
expenditure
Quality of health and social care services to be delivered by Caresouth Group depends
upon the amount of funds held by it. In case the company wants to deliver high quality services
to a large number of population, the company would need to incur a huge amount of expenditure
which would enhance the cost of its business.
Further, delivering health and social care services to small quantity of population would
result in reducing the cost of business (Torchia and et.al., 2015). In this regard, it can be analysed
that Both health and social care service deliveries and their cost and expenditure are directly
related to each other.
4.3 Evaluating impact of financial consideration upon an individual using health and social care
services
Financial consideration refers to the sum that would be paid by consumers in the
exchange of services or goods provided to them. They are the sources of funds from which the
company can gain finance for the business operations. Caresouth Group can gain financial
consideration by providing quality services to the consumers and attract them towards the
company.
Being a health and social care service provider company, as its aim is not gaining profit,
therefore, it would not require charging extra funds for the business, but Caresouth group would
need to set price of services in such a way so that it could regain the cost incurred by it in
providing services.
Further, it can appoint professionals as to provide health care services to consumers. With
the help of it, company's requirement of staff would also be reduces through which it can become
more cost effective. Through which the company would become able to set lower price for the
individual customers for providing health and social care services.
In this regard, appropriate financial consideration would be influenced for individual
using health and social care services of customers.
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4.4 Suggesting way of improving health and social care service through changing to financial
system and process
Analysis, evaluation and adoption of the most effective financial system and process is
the essential activity of the financial managers of Caresouth Group. It directly effects the
financial sustainability of business.
For this purpose, the company can adopt effective cost control system, as it would reduce
the cost to be incurred by business. Moreover, adoption of inventory management system in the
business would result in preventing the business from inventory wastage. Caresouth group can
also adopt key performance management technique in the company (Arnaboldi and et.al., 2015).
It will lead in enabling the company to analyse and monitor each activity of its business.
In addition, enhancing efficiency of predicting future cost, fruture incomes form service
provided by the company, etc. would also help the business in enhancing the financial decision
making power of the company.
In this regard, by adopting the above financial management techniques, the Caresouth
Group would be able to improve the financial system and process of the health and social care
services.
Conclusion
From above study it has been summarized that finance is a important for organization and
it controls is very important so records of finance keep fairly and accurate that helps in take right
decision. Many authorities include in health and social care financial resources like GAAP, care
quality commission. Financial resources manage by manger and owner through financial
management system and cost control system. Many types of source of income available in
organization that helps in increase revenue. It uses budgets like human resource budget and
overhead budget and financial shortfall and it management also covered in this report. So
management of financial resources and budget is important for compare expenditure and revenue
and increase and improve revenue.
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