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Managing Financial Resources in Health and Care: Assignment

   

Added on  2021-01-02

19 Pages5717 Words393 Views
Managing FinancialResources in Health and Care

Table of ContentsINTRODUCTION...........................................................................................................................2LO 1.................................................................................................................................................21.1................................................................................................................................................21.2 ...............................................................................................................................................31.3................................................................................................................................................41.4................................................................................................................................................5LO2..................................................................................................................................................62.1................................................................................................................................................62.2 ...............................................................................................................................................72.3................................................................................................................................................72.4................................................................................................................................................8LO3 .................................................................................................................................................93.1................................................................................................................................................93.2..............................................................................................................................................103.3..............................................................................................................................................10LO4................................................................................................................................................114.1..............................................................................................................................................114.2..............................................................................................................................................114.3 .............................................................................................................................................124.4..............................................................................................................................................13CONCLUSIONS............................................................................................................................13REFERENCES..............................................................................................................................151

INTRODUCTIONFor an organisation, managing finance is a task of key importance. The financialmanagement means to know the resources of revenue and areas as well as activities where therevenue generated is expended. This management includes proper allocation of resources andmonitoring the movements to enhance the revenue. By applying planning tools to control thecost and to reduce them to generate or increase profits of the organisation. In the present report, adiscussion about managing the financial resources of Care Tech Holding Plc is done, a publiccompany in health and social care industry. This task is done by using costing and businesscontrol systems. Also, a planning tool is applied for income sources and expenditure, monitoringof budget expenditure is carried out and efficient systems and processes for managing financialresources are recommended.LO 11.1The cost to Care Tech Holding Plc can be bifurcated as administration, financial, taxationand depreciation expenses incurred in a financial year. Income to the company is in form ofcharges for services of adult learning disabilities, mental health, adult residential services, fostercare, learning and children services.Cost benefit analysis for company is a process of quantifying costs and benefits ofprojects or program (Alles, Brennan and Vasarhelyi, 2018). The one which are undertaken andthose of other alternatives in order to have a single level comparison for unbiased evaluation.There are six best costing principles approved by NHS which can be implemented inCare Tech Holding Plc. The principles are as follows:Consistency: This principle is about following consistent approach in the organisation. Itstates that a consistency shall be adopted in all the departments and for unit measurement of cost.Stakeholder engagement: Under this principle, the organisation can estimate its cost byinclusion of non- financial departmental cost (Management of financial resources, 2018). Thenon-department cost includes cost of clinical and non- clinical staff. 2

Materiality: This principle states that the organisation shall accurately record costsrelated to material procurements and other activities so that a correct calculation of cost can bedone.Transparency: Costing done of by organisation shall be unambiguous or black andwhite and transparent. It shall be easily identified in documents when an audit is conducted.Data accuracy: a right cost can be reached when a proper record of different data is kept.A proper recording system of information shall be followed.Causality and Objectivity: this principle entails that coasting must be based on anunderstanding of causality for minimizing its subjectivity. An analysis of causality shall be donebefore measuring the cost, this will lead to reduction of causality.The methods for controlling the cost areCost centred approach: This principle provides an approach to manager which statesthat, they must keep cost within the limits of budgets. So that the profits do not be washed out ifcost crosses the budgeted limit.Pre patient cost consumption: Fee per patient can be set after valuation of cost perpatient. This is calculated by dividing total of variable and fixed cost for a period by number ofpatients in that period. IT Control system: An appropriate system of information technology will keepcomplete information properly recorded and processed.1.2 For a health care unit the financial performance is depicted with preparation of balancesheet and income statement for the organisation. To prepare a proper and accurate informationrelated statement, data related to revenue actually generated, actual cost and expenditure incurredare required.For preparing the profit and loss account, information related to revenue, cost andexpenses is required. The revenue in a health care unit is generated in form of fees charged fromthe patients. The revenue of Care Tech is from fees charged for various health care servicesprovided which are children and learning, mental as well as adult residential services. The totalrevenue generated by company in year 2016 was Euro 149 million. The cost and expenditure oforganization was 94.7 which gives a gross profit of 54.3 million Euros (.Coles and et.al., 2015). 3

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