Managing Financial Resources Essay

Managing Financial
Resources

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Principles of costing and business control systems...............................................................3
1.2 Information needed to manage financial resources...............................................................4
1.3 Regulatory requirements which helps in management of financial resources......................5
TASK 2............................................................................................................................................6
2.1 Diverse sources of income encountered in health and social care........................................6
2.2 Factors which impacts the availability of financial resources in health and social care.......6
2.3 Different types of budget expenditure in health and social care organisations.....................7
TASK 3............................................................................................................................................8
Covered in PPT...........................................................................................................................8
TASK 4............................................................................................................................................8
1.4 Analysis of the systems which helps in managing financial resources.................................8
2.4 Analysis about the decisions which are taken in health-care organisation regarding
expenditure..................................................................................................................................9
3.3 Budget monitoring arrangements in health and social care organisation.............................9
4.1 Identification of the information which helps to make financial decisions........................10
4.2 Relationship between a health and social care service delivered, costs and expenditures..11
4.3 Impact of financial considerations upon individual using health and social care..............11
4.4 Ways to improve health and social care service through change in financial systems.......12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Finance is an important component which helps in effective performance of different
functions of organisation working in any sector. It is the duty of the manager to understand about
the principles and techniques of accounting which helps in effective management of financial
resources. Financial resources means the money which is available to them in form of cash and
liquid securities which help in performance of day to day operations. Securing such resources
helps in effective and efficient operations to attain success. Management of financial resources
also hold an important position in health care sector. In this regard, manager of organisation
needs to monitor different budgets and documents like profit and loss account, balance sheet, etc.
Airedale Airedale NHS provides clinical services in the UK (Ahnquist, Wamala and Lindstrom,
2012).
In the present report, principles of costing and business control systems as well as
information which helps in management of financial resources, regulatory requirements,
different kind of sources of income and factors which have influence upon availability of
financial resources and different types of budget expenditures will be discussed. Also,
management of financial shortfalls, budget monitoring arrangements and information which
helps to make effective decision-making, impact of financial considerations upon individual
using health and care services and ways to improve health and social care service will be studied
here.
TASK 1
1.1 Principles of costing and business control systems
Costs: It is the value of money which is paid for acquiring something new which helps in
effective performance of operations. Different items which are needed to consider includes
efforts, risk associated, time consumed and material required as well as different resources. Cost
which is related to prior period is not considered. For example: Airedale Airedale NHSacquires
equipment then cost includes production and delivering charges of such equipment.
Income: It is considered as the money received by Airedale Airedale NHSin respect of
services which are provided to their patients. It is further used to operate day to day activities
effectively.

Cost benefit analysis: It helps in evaluation of the decisions taken by management. The
benefits which are received from business activities are added and all costs which are incurred in
this regard are subtracted.
Expenditure: In context of Airedale NHS, expenditure means money spent on acquiring
medical equipment. Money is spent in the form of cash or cash equivalents. It can be of two
types i.e. revenue and capital expenditure. Revenue expenditure is incurred by care home
regarding operations of day to day functions. On the other hand, capital expenditure is incurred
on purchase of fixed assets and machineries.
Cost centre: It is considered as a business control system. It is a separate department in
Airedale Airedale NHS which is responsible for the costs incurred. They do not take care about
the activities regarding generation of profit through use of their assets. It helps to control costs
below the budget and contributes indirectly to improve their profits.
Break-even: This analysis helps to determine the activities which are needed to perform
well to attain their break-even point. It is the point where cited care home reaches to the situation
of no profit and loss. So, it plays an effective control regarding controlling of different costs like
fixed and variable (Almalki, FitzGerald and Clark, 2011).
1.2 Information needed to manage financial resources
Management of financial resources is important for Airedale NHSto attain success in
their business operations. In this regard, large number of various information are required
regarding different aspects. It helps the manager of Airedale NHSto draw important conclusion
and improve their decision making. Different business information needed are mentioned as
below:
 Employees: The workforce which is working in Airedale NHShas main aim is to
effectively provide their medical services in UK. Determination of number of employees
helps in effective disbursement of amount of salaries.
 Finance: It includes determination of the amount of funds which is required for the
performance of their diversified services regarding basic medical facilities, optical care,
etc. It provides an opportunity to raise funds as per the requirements.
 External factors: There are many factors which affect the financial resources. Such
factors include change in policies, competitive factors and legal requirements. Non
fulfilment of legal requirements affect the government support towards NHS. So, it is