Report on Principles and Regulations in Health and Social Care Finance

This report delves into the critical aspects of financial management within the health and social care sector. It begins by explaining the core principles of costing, emphasizing the importance of accurate expense recording, the handling of abnormal costs, and the relationship between costs and their causes. The report then explores essential business control systems, including cost-benefit analysis, the role of cost centers, and the use of outsourcing to manage expenses effectively. Furthermore, it identifies the key information needed to manage financial resources, such as staffing levels, equipment needs, and the importance of budgeting. Finally, the report evaluates the regulatory requirements that impact financial management, specifically focusing on the roles of the Care Quality Commission (CQC) and the NHS Commission, highlighting how these bodies influence financial decisions and resource allocation within health and social care organizations. The conclusion summarizes the main points and reinforces the importance of adhering to costing principles and managing financial resources effectively to ensure the financial stability and operational efficiency of health and social care providers. The report is well-referenced with relevant sources.

Health and Social Care

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Explain the principles of costing and business systems...................................................1
1.2 Identify information needed to manage the financial resources.......................................2
1.3 Evaluate the regulatory requirements for managing financial resources.........................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................5

INTRODUCTION
Financial management is very much significant part of the organisation as well as for the
finance department. This is because it helps the venture to find that what are their income and
expenditure and how they can allot their financial resources to the different activities in order to
meet up with the budget. It is important for the venture to follow the different principles of
accounting so that they can manage their cost. The report is going to include the different
principles of costing and what are the resources and information needed in order to mange the
finance.
TASK 1
1.1 Explain the principles of costing and business systems
There are several principles that need to be follow by the organisation in order to conduct
effective costing, the principles are as follows: Cost is charged when it is incurred: As per this principle, heath and social care
organisation can record their all the expenses in their books of accounts when it is being
actually incurred. Such as when the organisation is purchasing bed of the hospital, in that
case they need to record the transaction for the same amount at which they have
purchased. Abnormal cost is charged as cost: It is being known that there are several incidents can
be taken place which is unconditionally such as fire, theft in the warehouse. These losses
are also being called as the expenditure. These expenditures are the abnormal cost of the
organisation (Cooper, 2017). The normal cost that related to the production process are
used in costing and are considered for comparing firm performance regarding cost. On
the other hand the abnormal cost which is being incurred are not considered as the
production cost and are not being charged as the cost centre. Health and care organisation
have to consider those expenditures only which is being incurred in serving the different
services to the clients. These cost are being considered as the cost of service in the
organisation's books of accounts Cost is related to cause: As per this principle, the different cost which is being related to
the different cause, this is because they are originated. The key reason under this
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principle is that the cost are always influenced by the cause (Basavachari, 2017). Thus,
the firm need to keep control over their cost so that they can stop different cause.
 Past cost cannot organization forward for next year: According to this standard, cost
that is identified with past year must not be conveyed forward for the following money
related year. This is on the grounds that if past year cost is exchanged to the present year,
at that point the weight of cost increments and exact execution of the firm can't be
estimated.
Business control systems Cost benefit analysis: Cost advantage examination is a stand out amongst the most
imperative control techniques. This is on account of by utilizing this technique it is
recognized that what measure of offers firm needs to make to take care of its expense
(Goodwin and Piasentin, 2017). Henceforth, the likewise firm decided its business focus
for general business so cost can to and the appropriate measure of benefit can be earned
in the firm. Cost centre: Cost focus alludes to the division on which cost is charged by the business
firm. In each cost focus, somebody is made in charge of the solid or feeble execution of
the business firm with respect to height in cost. Henceforth, one might say that cost focus
is the one of a fundamental piece of the business control arrangement of the firm.
 Outsourcing: Outsourcing is progressively utilized by the business firm to control rise in
its cost. At times it ends up extreme for the representatives of the business firm to
perform business activity because of its mind boggling nature. In such a case firm make
utilization of outsourcing administration to control its cost. Thus, it effectively lessens its
cost.
1.2 Identify information needed to manage the financial resources People: Firm needs to assess the quantity of individuals that it will be relied upon to
serve in the up and coming period. As needs be, it can gauge working capital that will tie
in the business. By estimation, assets will be overseen. Equipment: : Some particular gear's and consumables are required in the care home to
deal with patients (Angelopoulos and Pollalis, 2017). By estimation, the firm should allot
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the different sum for gear and consumables and will mastermind back to guarantee that
firm won't confront the issue of shortage of financing.
 Budget: Budget is the one of the essential money related proclamation since it enables
firm in controlling its business to cost. By utilizing this instrument, Care home can
effectively control and decrease its market cost. One might say that financial plan has
awesome significance for the business execution.
1.3 Evaluate the regulatory requirements for managing financial resources Care quality commission: It is being decide that Care quality commission need to do
checking, examination and direction of well-being and social care administrations of
pertinent establishments. The outcomes that are acquired by CQC in regard to minding
homes is transferred on its site. Private care focuses keeping in mind the end goal to
make their constructive picture make speculation on different hardware and redesigning
offices that are given to the old individuals (Chouhan and Chandra, 2017). This
influences the firm monetary condition. Subsequently, Care home needs to deal with its
monetary assets to request to guarantee that it won't confront the issue of shortage of
store in its business.
 NHS commission: According to the rules of NHS need to screen human services firms,
and in such manner, it readies its own particular dispatching bunches that screen the level
of administrations that are given by the medicinal services associations to the general
population (Viswanath, 2017). Significant firms redesign their administration and
because of this reason trade outpouring happens out their business. Henceforth, one
might say that controls influence the budgetary asset's administration of the business firm
(Viswanath, 2017).
CONCLUSION
It can be concluded from the project report that every organisation whether they are heath
and care, need to follow the different principles of costing such as cost will be recorded when it
is being occurred, past cost can not betaken forward for the next year. Other than that there are
several factors which need to be consider when the organisation is managing their financial
resources such as people, equipment etc.
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REFERENCES
Books and Journal
Angelopoulos, M. and Pollalis, Y., 2017. Activity Based Costing (ABC) as a tool for Lean
Transformation: The Case of the Greek Power Public Corporation (PPC).
Basavachari, V., 2017. Cost and Costing Techniques in Managerial Economics. DHARANA-
Bhavan's International Journal of Business. 7(1). pp.19-27.
Chouhan, V and Chandra, B., 2017. Activity based costing model for inventory valuation.
Management Science Letters. 7(3). pp.135-144.
Cooper, R., 2017. Target costing and value engineering. Routledge.
Goodwin, M. J. and Piasentin, F., 2017. Using the ALARP principle to significantly reduce
offshore decommissioning costs. The APPEA Journal. 57(2). pp.455-458.
Jorge, M. J., 2017. Guiding principle of innovation in a multipurpose public health organization.
Viswanath, N. S., 2017. A Text Book of Cost Management: GV Keshava Rao, D. Gopinath, MG
Krishnamurthy and Anitha S. Yadav. DHARANA-Bhavan's International Journal of
Business. 8(2). pp.97-97.
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