Managing Financial Resources in Health and Social Care (MFR)

Managing Financial Resources in Health
and Social Care (MFR)
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Table of Contents
Task 1..............................................................................................................................................4
Introduction................................................................................................................................4
1.1................................................................................................................................................4
1.2................................................................................................................................................6
1.3................................................................................................................................................7
Conclusion:.................................................................................................................................8
Task 2..............................................................................................................................................9
Introduction:..............................................................................................................................9
2.1................................................................................................................................................9
2.2..............................................................................................................................................10
2.3..............................................................................................................................................12
Task 4............................................................................................................................................14
Introduction..............................................................................................................................14
1.4..............................................................................................................................................14
2.4..............................................................................................................................................16
3.3..............................................................................................................................................17
4.1..............................................................................................................................................18
4.2..............................................................................................................................................19
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4.3..............................................................................................................................................20
4.4..............................................................................................................................................21
Conclusion................................................................................................................................21
References.....................................................................................................................................22
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Task 1
Introduction
This report defines the costing and cost control system techniques. Cost control techniques are
very useful for business organization. This report explains various methods which are used in
cost control process and gives assistance in the decision-making process. Also, the report
explains the need and importance of appropriate information (Markgraf, 2018). In addition, legal
needs for managing the financial resources are also to be discussed in this report.
1.1. Explain the principles of costing and business control systems.
Costing is a group of techniques used to identify the cost. Cost accounting is the method used
for record-keeping, examine, classifying and executing the different plans for controlling the cost
of every business activities. Various principals followed by the Pennine care NHS is as follows:
Cost-benefit analysis: Under this analysis budgeted expenditure and incomes are compared with
each other to determinate the profitability of project (Markgraf, 2018).
Cost center: Every cost analyses and apportioned on the basis its cost center.
Unexpected loss is part of cost: Abnormal losses arise due to unexpected events like fire, theft
or accident. This cost is not related to production process so it will not be included in production
cost but it will charge in cost statement as an expense.
The cost charged after it incurred: Every cost in cost statement will be recorded when it arises.
For example, loss occurs due to fire or theft is only recorded if it happens. Only the basis of
estimation this will not charge to cost statement.
Previous costs are not included in future cost: This principle ensures that every expense is
recorded in the related period. Costs related to previous years will not be included in the future
period. Some expenses which are assumed as deferred revenue expenses will charge accordingly.
Principals followed for business control system:
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This system is used to reduce the chances of fraud. Cost accounting provides information about
the business process. This information can be used for effective forecasting and decision making.
Break-even analysis is also a useful tool in the business control system (Finkel, 2015). It is an
ideal stage where revenue is equal to the cost. Basic monitoring software helps to maintain an
updated record of financial information. Cost accounting techniques provide assistance in cost
control and forecasting of future strategies. Also, it provides a competitive advantage over
arrivals.
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1.2. Identify information needed to manage financial resources
To manage the financial resources of Pennine Care NHS Foundation Trust following information
required:
Information about assets: Information about various types of assets items like buildings,
equipment, funds, consumable inventory can be used to determinate the strengths and
weaknesses of the company (Root 2018). This information will also help to explain the potential
risk included in the business process and the same can be used for managing the financial
resources.
Information about funds and incomes: Various type of administrative information is required
for managing the financial resources. This includes data about availability of funds, incomes, and
others. This information is used for decision-making budgeting and forecasting (Root 2018).
Analysis of income statement gives guidance for strategic decisions like investment in new
projects or amalgamation with other companies.
Information about external changes:
About Market trend: information about market trends gives assistance to manage the financial
resources in a good manner.
About Change in economic policy: economic changes include changes in interest rates;
inflation rate etc. financial situation of Pennine care foundation will be also affected by these
factors. Information about these factors helps to manage the financial resources appropriately
(Gartenstein, 2018).
About Competitors: information about the arrivals is also needed for managing the financial
resources. Management can identify the straights and weakness of competitors and use financial
resources to take competitive advantage.
About Legal rules: information about legal changes is also needed for managing the financial
resources of the company. The company can make strategies as per legal framework and the
same will save the cost for the company (Gartenstein, 2018).
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