Analysis of Financial Resource Management at CareTech Holdings Plc

This report delves into the financial resource management practices of CareTech Holdings Plc, a health and social care provider. It begins by explaining costing principles and various business control systems, such as cost-benefit analysis, cost centers, break-even analysis, and forecasting. The report identifies essential information needed for managing financial resources, including direct and indirect expenses, variable and fixed costs, competitive factors, and legal requirements. It then explores regulatory requirements like tax deadlines, pricing policies, financial record-keeping, and auditing. Furthermore, the report evaluates different systems for managing financial resources, including income sources, budgeting, and enterprise resource planning (ERP). The analysis covers CareTech's income sources (public, private, voluntary, sales, investment, and capital gains), factors impacting financial resource availability (private finance, government policies, and project prioritization), and various types of budget expenses (cost center, project management, and outsourcing). Overall, the report provides a comprehensive overview of financial resource management within the context of CareTech Holdings Plc, offering valuable insights into financial planning, control, and decision-making in the health and social care sector.

MANAGING FINANCIAL
RESOURCES IN
HEALTH AND SOCIAL
CARE

INTRODUCTION
Resources are very key part as well as highly significant for each and every business
enterprise when it going to establish and operate in the market. Without proper and adequate
resources it is not possible to exists and produce various types of products and services. In
context to this, financial resources are highly important and necessary for the firm to generate
sales and revenue. Apart from this, it is highly compulsory to manage financial resources for that
various aspects and elements available. In the current case, CareTech Holdings Public limited
company is chosen which operates in the health and social care sector. The report describes
about various systems and approaches as well as informations which are highly helpful to the
company in order to manage financial resources in adequate manner. Furthermore, it helps to the
reader to understand role of planning and organising in the health care firm to make plan and
manage available financial resources. In context to this, it focuses on ways and methods by
which financial constraints and shortfalls as well as suspected fraud can be reduce at the
workplace of CareTech Holdings Plc. At the last, it looks upon different systems and processes
by which financial resource can be manage in effectual way.
TASK 1
1.1 Explanation of costing's principles and various systems for business control which may be
adopted by CareTech Holdings Plc
In order to control over the business process and costs there are various types of
approaches and principles adopted by the selected business entity. With the help of respective
method's management of health and social care company able to control over the expenses
occurs at the workplace. Further, such approaches are analysed as below:
 Cost benefit analysis: It is one of the best method because here the firm focuses on the
only cost and expenses aspects. By this, different costs which comes into consideration
for producing healthcare services are to be analysed (Bahn, 2015). Through this
management able to identify that at which stage or process cost incurs high. On the basis
of respective information level of costs can be control in easy manner.
 Cost centre: The criteria or department in which all the costs are recorded which occurs
in various functions of CareTech Plc is identified as cost centre. With the current
department the company is highly able to assess expenses and on the basis of this level of
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selling price of the healthcare services is to be determined. On the basis of cost centre
profitability ratios are calculated and further decisions are taken.
 Break even: As per the respective system the company is able to know situation of no
loss and no profit. The point at which total cost of production as well as revenue both are
same and intersect is known as break even point (Durst and Wilhelm, 2012). On the basis
of this CareTech Plc know about the cost and make plan to manage the services as well
as financial resources.
 Forecasting: The system of controlling in which different financial informations like as
sales, cost and profit is to be assumed on the basis of past data is known as forecasting. It
is the best method to control over the costs and make the firm more beneficial in the
health and social care industry.
1.2 Identification of different information which are needed for managing various financial
resources
When the manager going to manage different financial resource available in the firm then
use various types of informations needed which are analysed as below:
 Direct and indirect expenses: First and foremost information require for the CareTech Plc
to know about the availability of resources as well as managing is related to the costs and
expenses. The costs which are directly as well as indirect way comes into consideration
are known as direct and indirect expenditures respectively (Edwards and et.al., 2013). For
example: direct material, labour, equipments purchase, loss of productivity, rent on
property, depreciation on assets etc.
 Variable and fixed expenses: Those types of expenses which are varied as per the level of
output and remain constant even production units changes are called as variable and fixed
respectively. On the basis of such costs CareTech Plc able to know that how much
financial resources are required and on the basis of this further decision taken and
manage. Such costs are like as suppliers of therapeutic, wages to snipers, administration
cost, utility, maintenance, insurance etc.
 Competitive factors: On the basis of competitive firms pricing decisions are taken by the
company (Kopitin, 2013). Due to the respective system, financial resources fluctuates and
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for that it is necessary to take informations about the prices charges by the another firm of
health and social care.
 Legal requirements: There are various legal rules and regulations are prepared and
formulated by the authority body. In reference to this, it is necessary for the CareTech Plc
that how much amount of profit needs to keep with firm as a reserve on the basis of legal
rules. It is the best system which highly helpful for managing all the financial resources.
1.3 Explanation of several regulatory requirements to manage resources like as financial
In order to manage and increase financial resources various types of rules and regulations
are framed. By using such kinds of legal requirements CareTech Plc is able to manage such
resources which are explained as below:
 Meet with deadlines of tax: When the firm pay amount of taxation in the regulatory body
then burden will reduce. It is the key requirement of every business entity to meet
taxation amount on the profit which is earned by CareTech Plc on or before the deadline
give (Taplin, 2016). With the help of respective system proper net profit identified and
financial resources are managed.
 Effective pricing policy adoption: Profit level and financial resources are depends on the
selling price and costs. Further, by taking appropriate and fair decision to charging prices
of healthcare services financial resources will be manage in the firm.
 Proper record of financial transactions: In context to this, when the management of
finance and accounts record all the financial transactions in proper manner then it able to
identify profit and loss situation. Hence, it is very necessary and highly effective method
for assessing level of financial resources and manage it as well.
 Audit system: Apart from above analysed regulatory requirement other is auditing which
is mandatory for each and every business firm which operates in the healthcare segment
in legal manner. There are mainly two types of audits requires like as internal and
external but external is compulsory for CareTech Plc (Martins, 2014). In the external
audit system CA and authority body check financial records and statements by which
financial resources are managed in effectual way.
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1.4 Evaluating various systems in order to manage financial resources
For managing the resources such as financial there are several kinds of systems are
available with the firm. On the basis of different systems the CareTech Plc able to manage the
resources in effectual way which are evaluated as below:
 Sources of income: On the basis of different avenues to generate money the management
of company able to increase and manage the financial resources. Different source to earn
money are such as private, public, voluntary, capital gains, investment, sales etc. On the
basis of respective sources firm become profitable in terms of enhancing financial
resources. However, due to this, firm has to follow all the rules and regulations by which
sometimes CareTech Plc affects in the negative manner as well (McConaghy, 2013).
 Budget: Further, it is one of the best system in which level of financial resources is
identified for current and future FY. On the basis of predictions resources in the
healthcare sector are managed in highly appropriate way. It can be said the budget system
is effectual way to manage the resources and enhance it. On the other side, for prepare
budget, employee of high qualification requires which lead to affect net profit and
financial resources both in adverse way.
 Enterprise resource planning: Apart from above mentioned systems there is a software
which helps to the CareTech Plc in order to record various financial transactions by
which accounts are to be prepared. It is the best system for assessing and managing the
financial resources. In contrary, to operate the ERP software there is highly technical
employees requires to whom CareTech Plc has to give more wages. In this, it can be said
that without the technical employee management not able to record properly and manage
such resources (Swayne, Duncan and Ginter, 2012).
TASK 2
2.1 Discussing regarding source of income for CareTech Holdings Plc
Income is key part of the every firm and because of this entrepreneur exists in the health
and social care segment. There are various types of sources which helps to the CareTech Plc in
order to generate incomes which are such as follows:
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 Public: In this the income and sales generated with the help of different public source
which are available for health and social care. The sources which includes in public are
like as government, financial institutions, banks such as commercial etc.
 Private: Further, private sources to generate and earn incomes in CareTech Plc are such
as large level of health and social companies, private financial institutes and banks,
venture capitalists etc.
 Voluntary: The sources which neither involves in private nor in the public sector are
known as voluntary (Salisbury, 2014). Such types of incomes sources are such as angel
investors, merchant banking, charitable firms and trusts etc.
 Sales: By selling and offering healthcare services CareTech Plc takes prices which helps
to earn income in the firm. Hence, it is one of the best and widely used source of incomes
for the health and social care where services are sole to the patients.
 Investment: In this some of money which is invested by the selected firm in different
investment avenues which provide return to it. Further, the return generated on the
investment is one types of incomes for CareTech Plc.
 Capital gains: Amount of fund which is used by the company in order to produce various
healthcare services and it gives return. Hence, the return or gains which is earned through
capital is income of the respective healthcare company (Kumar and Rao, 2016).
2.2 Analysis of elements which impact on the availability of financial resources
In the business, financial resources are available which helps to take various decisions as
well as produce services for offer the patients. There are various factors by which available
financial resources affects in different manners which are expressed as below:
 Private finance: When the company such as CareTech Plc going to raise fund from the
private financing sources then level of financial resources affects in the positive way. On
the other side, the private sources takes cost of finance which is paid from the profit
generated by it. In short, positive impact of private finance is more compare to negative
on financial resources which are available.
 Government policies: In the government fiscal policies are highly affected to the
financials resources in terms of negative. For instance: if there are taxation rate enhance
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then CareTech Plc has to pay more amount of tax which lead to reduce financial
resources which are currently available.
 Priority of the project: Apart from this, in the firm when there are two or more
simultaneously projects and one is the most important. Further, to the important project
company has to give priority and invest money in that (Richards, 2015). Due to this
availability of the financial resources affects and allocation in organisational functions as
well.
2.3 Reviewing various kinds of budget expenses
At the workplace there are different kinds of budgets are prepared which show
availability of the financial resources in current and future. Different kinds of budget costs are
like as cost centre, project management and outsourcing which are analysed as below:
Cost centre: It is a responsibility centre of the company which take care and analyse all the costs
which are comes into consideration. There are different expenses are identified through cost
centre such as variable, fixed, direct, indirect etc. on the basis of cost centre CareTech Plc able to
derive selling prices of the healthcare services.
Advantages and disadvantages:
The cost centre is helpful for the healthcare company to know the overall and total
expenses of the production which incur to produce different healthcare services. Apart from this,
by using such responsibility centre it able take corrective pricing decisions of the services
provide by it to the patients (Malik, Field and Gorwood, 2016).
However, due to using the respective centre paperwork increase by which burden on the
CareTech Plc and administration employees enhance. When these things enhance then efficiency
and productivity affects in high manner.
Project management: The process of planning, controlling, directing, organising and executing
a particular plan in efficient way is called as project management. With the help of respective
management the healthcare business can make and prepare future plan to meet with the
objections and goals.
Merits and demerits:
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The company is highly able to make the proper plan and implement at the workplace with
the help of project management (Berger, 2015). Further, with this total time and duration of the
whole project will reduce by which services provided as soon as possible. When the management
of CareTech Plc offer service on time then their satisfaction level increase.
In order to use the project management technical and highly qualified person require to
the healthcare company. In addition to this, level of expenses also increase because here project
management software is used.
Outsourcing contract: Another type tool is outsourcing in which the CareTech Plc take help of
another companies which operate in same industry. Further, by taking help of another healthcare
firms it able to give high satisfaction to the patients.
Benefits and limitations:
When the healthcare firm such as CareTech Plc use the respective source then able to use
help of the highly experienced as well as expertise candidates which lead to provide high quality
of services at the lower cost.
In contrary, cost such as hidden comes in the production process by which profit affects
in negative way. Further, control on the company and management process diluted with that firm
from where helps to taken by CareTech Plc (Charnes, 2012).
2.4 Evaluating decisions about expenditures within CareTech Plc
 Environmental analysis: On the basis of external and internal environment of the
company decisions are taken by the healthcare segment to make the expenses. In the
external environment if rate of interest increase then flow of money reduce by which
costs and expenses are comes into control.
 Accountabilities: On the basis of the responsibilities of the CareTech Plc as well as
employees level of expenses are to be assessed. On the other side on the basis of
customer's wants and requirements also the management make effectual decision to make
expenses.
 Short and long term planning: At the workplace there are different types of planning and
prepared by the firm to meet with its purpose and objectives. Management identifies that
in the short as well as long term plan how much amount is required and on the basis of it
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further expenditure decisions are made by them (Yalcin, Bayrakdaroglu and Kahraman,
2012).
 Financial risk: Apart from this, by considering different types of risks and uncertainties
the company able to know about the future and current expenses. Hence, it can be said
that CareTech Plc make expenses decisions with the help of financial risks.
TASK 3
3.1 Ways to manage and reduce financial shortfalls
It is not compulsory that every time business generates profit only. Sometime financial
constraints and shortfalls can occur in the firm by which financial health of entity become week.
In order to reduce various financial problems the management of CareTech Plc needs to reserve
some amount from the profit generated by it. When there are critical situations arises then it can
use such kinds of funds and fulfil the requirements. In context to this, the policy makers must use
make effective strategies to attract more number of patients which helps to increase sales and
cash position at the year ending (Greene, Brush and Brown, 2015). Moreover, by using tactics to
control on the cost and achieve economies of scale management CareTech Plc highly able to
increase financial performance in the whole healthcare and social care segment.
3.2 Actions which can be taken in order to suspect financial fraud
At the business environment of every company there are different kinds of frauds are
comes into existence which lead to hamper overall smooth functioning. There are various kinds
of frauds suspected in the firm like as cheque, accounting, insurance, personal, financial, scam
etc. In the CareTech Plc when financial fraud suspects then at the very first and initial level the
management has to use the auditing and reposting system. In the auditing the regulatory body
and chartered accountant check all the financial statements and accounts that is there any fraud
done or not. In addition to this the company needs to check its financial accounts in proper way
using appropriate regulations and standards. The firm should use and implement different fraud
assessment within the account departments. Furthermore, management of CareTech Plc needs to
take information about the employees like as their background, habit etc. which highly helps to
reduce financial frauds (Smith, 2014). By using passwords, making effective procurement
process, using policies for credit purchase etc. CareTech Plc can reduce and overcome the
financial frauds.
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3.3 Evaluation of budget monitoring arrangements within CareTech Holdings Plc
 Performance review: In this the company know that business is going in positive and
profitable direction or not. If firm founds that there is any problem occurs then it able to
make the strategies to overcome such constraints. In this context it can be said that
CareTech Plc highly able to know performance in the healthcare industry.
 Variance analysis: It is the best and effective method for monitor and assessing various
budgets and analyse overall business performance. According to this, the CareTech Plc
compare two data like as budgeted and actual results and then take decisions for further
plan.
 Estimation: When the management going to monitor and check budget then it determines
and estimate future financial data (Bahn, 2015). By this, it can know that how much
financial resources will be require in the future fiscal years.
TASK 4
4.1 Identification of those informations which are needed to make financial decisions in
CareTech Plc
Financial decision is that in which the firm raise fund and capital from the different
sources. In references to this, when business entity such as CareTech Plc going to take finance
then very first it needs to take information related to the cost which is imposes by financing
sources on it. Further, it requires information in terms of rules and regulations, conditions to pay
amount which is raised etc. Further, it is very necessary to assess that in which form costs are
imposes by particular source such as dividend, stake, tax, interest etc (Durst and Wilhelm, 2012).
On the basis of such informations it able to know that particular source to raise fund will be
appropriate for it or not.
4.2 Analysis of relations among care service as well as costs
 Pricing policies: When the CareTech Plc sale its healthcare services then price determine
of that and then offer to the patients. In this context, for assessing pricing decisions cost is
a base and plays key role in it. On the basis of overall cost of production business entity
determine pricing of the healthcare services. When level of cost is high and low then
prices of services also high and low respectively.
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 Accountability: The respective approach helps to the firm in order to provide facts and
figures related to the cost and expenses. Here different number of costs are to be recorded
and then level of prices derived (Edwards and et.al., 2013).
 Transparency with the stakeholders: Different stakeholders of CareTech Plc seeks
towards the firm that it will provide higher quality of services, salary, return, charge
lower prices etc. For that it requires to assess total variable and fixed costs and on the
basis of total expenses services offered in the market. When there are cost is low then it
will charge low prices of services. Hence, it can be said that services offered by CareTech
Plc are related to the expenses and costs.
4.3 Evaluating that how financial considerations affect to the service user
 Quality of service: In the every company quality matters up to greater extent because
customers always seek towards the respective concept. When quality of healthcare
services provided by the CareTech Plc are higher, then patients and customers increase
which lead to effect the users positively. In context to this, when the company provide
low and poor quality of such services to the consumers then they will not attract towards
it. Due to this reasons level of the sales and profit both affects in the adverse manner.
Hence, it is necessary to manage and increase quality of the healthcare services offered
by CareTech Plc.
 Access to service: Another aspect is the access of healthcare services which is necessary
to provide in effectual manner (Kopitin, 2013). According to this, the CareTech Plc enter
in the emerging and developing market using current as well as new services. When it
tries to go in new market then able to enhance level of customers. Furthermore, for
entering in new market it need financial resources which are taken from different sources
and within the firm, as well. On the other side customers will increase by which sales,
profit and income affects positively within the healthcare business entity.
4.4 Recommend different ways to enhance care services which are offered by CareTech
Holdings Plc
In the business world, every firm wants to become more profitable with the help of its
services and products offered in its respective industry. In the current scenario, the CareTech Plc
wants to enhance healthcare care services in its current industry by which it able to maximise
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