Healthcare Financial Resource Management: A Detailed Report

This report comprehensively examines financial resource management within a healthcare context. It begins by outlining the principles of costing and business control systems, emphasizing the importance of effective financial resource allocation. The report delves into the information necessary for successful business operation, including regulatory requirements and the evaluation of software solutions. It explores diverse income sources, factors affecting finance availability, and budget expenditure in health and social care organizations. The analysis extends to decision-making processes regarding expenditure, fraud detection, and budget monitoring. Furthermore, the report addresses the information needed for service level decisions, the relationship between service levels and expenditure, and the financial impact on individuals. Finally, it suggests financial systems to improve service delivery in new healthcare settings, offering a holistic view of financial management in the healthcare industry.

Managing finance resources
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Table of Contents
Introduction.................................................................................................................................................3
Task 1..........................................................................................................................................................4
1.1A clear outline explanation of the principle of costing and business control system..........................4
1.2Information needed to successfully manage the business operation...................................................7
1.3 The explanation of regulatory requirement for managing financial resources...................................8
1.4An evaluation of computer software as a mean of managing the financial resources.........................9
Task 2........................................................................................................................................................10
2.1discuss the various sources of the income that might be for her new care home...............................10
2.2 factors which may affect the availability of the finance...................................................................11
2.3 Review the various kind of budget expenditure in health and social care organization...................12
2.4 evaluate how the decision about the expenditure are to be made in the resident care home............14
Task 3........................................................................................................................................................16
3.2 What can she do if she suspects frauds in the cash budget?.............................................................19
3.3 Suggest and evaluate methods used to monitor and control budgets?..............................................20
Task 4........................................................................................................................................................22
4.1 The information needed by the manager to make decision about the level of service which will be
provided to the users and the funding organization...............................................................................22
4.2analyze the relationship between the level of service she will offer and the expenditure..................23
4.3 evaluate how financial consideration will have an effect on the individual.....................................23
4.4 Suggest financial system that can improve the service which the new health care is offering.........24
Conclusion.................................................................................................................................................25
References.................................................................................................................................................26
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Introduction
The success of the business largely depends upon how effectively the manager utilize various
resources to run business operation. The management needs to make decision how it uses its
financial resources and monitor its budget to manage business operation. The management needs
to effectively manage its finance to attain the goals and objective of the business. The
management used various type of budget to check that the financial resources of the company are
properly utilized and there is no wastage of resources.
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Task 1
1.1A clear outline explanation of the principle of costing and business control system.
The costing is the process to estimate the cost of the production or running business by making
proper allocation to expenditure to different stages of the production. The costing helps the
management to effectively manage its financial resources to conduct business operation
effectively. The costing is the technique used by the management to compute the total cost per
unit by considering various fixed and variable cost used in producing goods and service. The
main principle of costing is as follows-
To effectively manage the business the management needs to effectively manage all the cost
which is incurred to produce the good. The costing helps in proper allocation of various cost on
the different unit or function of the business. The key principle of costing are as follows-
Cost and cause relationship- The management needs to check that the cost which is incurred
while conducting the operations are properly allocated to the unit or product to make effective
decision in relation to the business. The management needs to collect the various cost as per the
nature and allocate and apportion those cost on the basis of cost relationship. The cost needs to
be charged only to those unit for which such cost has been incurred.
Cost is charged after it is incurred- The management needs to check that the cost is charged
only after they are incurred. The cost should include only those expenditure which has been
actually incurred and doesn’t include cost which are likely to arise in future.
Future cost doesn’t include the cost which is incurred in past-The costing ensures that the
cost which is incurred in the particular period should be meet by the profit of that particular
period only. The cost of the past year are included in the current period than it will provide
inappropriate result to the management because it creates inappropriate burden on the particular
year (Martinez, Kromann, & Astrup, 2015).
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Maintain cost record as per double entry system- The organization generally keeps the
accounts for the cost as per double entry system to effectively manage business operation. The
costing uses the various cost sheet and the cost statement for the purpose of ascertaining cost and
provides cost control guidelines to the management.
Treatment of abnormal cost-The management also needs to check that the abnormal cost are
not charged to the production unit as the cost has no relation with the production part. It will
mislead the management in making various pricing or other decision of the business. The
costing helps in ensuring that the abnormal cost are charged to cost center and not to any of the
production unit. Also the other expenses which doesn’t have any relationship to the operation are
not charge to the costing (Reineking, Chamberlain, Rudolph & Smith, 2013).
The various business control system use by the manager in the process are procurement process
and business control system.
Procurement process – the procurement process requires the series of steps such as finding,
acquiring and purchasing the resources which are required to manufacture goods and service.
The procurement process is too dynamic that it requires constant analyze and monitoring all the
activity within the organization. The home care can follow the series of the steps to effectively
acquire the resources while conducting their activity. To effectively manage the procurement
process the manger needs to follow the series of steps which start from need recognition and
involves sources, price, expenditure, and invoice and maintain the records. The new care home
will follow the following steps for procurement process.
 The manager of the new home care will plan the procurement based on the identified
need.
 The manager than needs to decide the scope of procurement process. She needs to decide
that the goods and service which are required by the business are subject to coordinated
procurement that must be used.
 The manager of the new home care than needs to decide the method which is to be used
for the procurement of the resources.
 After that manager need to approach the market and identify the sources from which the
fund are to be acquired.
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 The manager than needs to evaluate the submission and conclude the tender process.
 The final step is to manage the process to check that the process is conducted in the
planed way.
Management control system – The management control system gathers the information to
evaluate the performance of the various unit of the business. It is the tool to measure how
effectively the business is conducting its operation to attain the objective and goals of the
business. The management control system involves the set of the activity or decision which are
taken by the manager to establish purpose, allocate resources and achieve organization purpose.
The management control system unites the different parts of the organization so that each unit
perform their work effectively which help in fulfilling overall purpose of the organization. The
manager of new home care needs to follow the following steps to manage the business.
Programing- The manager of the new home care needs to choose the specific program for the
organization activity which describes the activity to be conducted within the framework of
implementation strategy of the organization.
Budget- The manager needs to prepare the budget in which he will determine the resources
which is to be charged to each activity of the business. The manager will prepare the budget for
the area of his operation to effectively conduct the business process.
Management of the process- The manager need to check that the operation of the business is
conducted in the planned way and within the allocated budget.
Reporting and analyze- The reporting and analyzing is used by the manager of the new home
care as a means of controlling the set plan and comparing the actual result from those which was
set in the plan.
The cost which the care home incurs per month on one resident is as follows –
No of resident = 65
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Fixed cost per month = 75000/65= 1153.84
Average variable cost per month = 1200
Cost per month on one resident is as follows = 1200 + 1153.84 = 2353.84
1.2Information needed to successfully manage the business operation.
To effectively conduct the operation of the business the manager needs to effectively manage all
the cost which hare to be incurred to run the operation of the business. The cost is the amount
which the company paid to acquire and use certain resources of the business. The management
for making various decision needs to ascertain cost per unit incurred by the company to
manufacture its product and service. The cost center is the unit of the business which is not
involved in the production activity and adds to the cost of running of the company. The cost
which is incurred on the cost center is allocated to the production unit of the business. The cost
which the resident home has to bear are as follows-
Direct cost- This is the cost which can be directly attributed to the particular product and service
of the company. For example the cost incurred on acquiring resources which is used by the
resident home t0 produce food for their member.
Indirect cost – These are the cost which cannot be attributed to the particular unit has to be
apportioned between the various unit of the business. For example the house rent paid by the
resident home cannot be allocated to the particular unit and has to be apportioned between the
various function of the business.
Variable cost- It is the cost which varies with the outcome which the company is producing. For
example the wages paid to the kitchen staff varies with the food which they are producing.
Fixed cost-These are the cost which doesn’t varies with the level of the outcome and are charged
to the outcome of the business. For example the salaries paid to the manager is fixed cost and the
company has to incur it irrespective of their activity.
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To improve the profitability of the business and grow its operation the management needs to set
both short term as well as long term goals for the business. These goals provides the direction to
the company to improve its position in the market. The management needs to set up the goals to
control the business and focus on key area of the business. The goal setting helps in effective
utilization of their resource and create the positive environment within the organization.
Short term objectives is for short period of time on the other hand long term objectives is for
long period of time. Long term objectives are for achieve high revenue in an organisation.
1.3 The explanation of regulatory requirement for managing financial resources.
To effectively manage the resources the management has to follow certain regulation which is
set by the regulatory body to check that the organization are making effective use of the financed
resources. They provide the guideline to the manager which describes the standard below which
there outcome shouldn’t fall. The GAAP also provides certain guidelines which the resident
home need to follow while maintaining its accounting records. It ensures the minimum level of
the consistency in the financial statement of the company which makes it easier for various
stakeholder to understand and useful information about the company. It also provides the clarity
of the communication of the financial information and helps in making comparison with the
other companies.
The care quality commission provides the standard and makes effort that the outcome may not
fall below standard. The health and social care needs to ensure that the customer are treated with
dignity and respect at all time while receiving care and treatment. The organization need to
ensure that the appropriate consent should be provided before the treatment and the provide
safety during the treatment to customer. The commission also ensures that the customer are not
abused or receive improper treatment while receiving care. It also check that the organization
effectively handle the complaints of the customer.
Now we can discuss about the general medical council, GMC is for the general public which
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help to protect, promote and maintain the health and safety of the public. There is one more
financial regulator which is care quality commission that help to provide high quality care
services such as care home, dental and other care services for the general public.
The health and social care act states that the code must be taken into consideration by the care
quality commission when they make decision in relation to registration and the organization need
to follow the code when deciding how they will meet the regulation. However these codes are
not mandatory the organization needs to demonstrate that they meet the regulation in the
different way from that which is described in the document. These codes help in preventing the
customer from getting affected through infection and provides the guideline to the industry who
are engaged in health and social care needs to follow. The NHS commission has to check that the
health and service are provided in the way that promotes NHS constitution among patient staff
and the member of the public. The NHS ensures that the people are aware of the right available
to them and they contribute as far as possible to the advancement of the principle, rights
responsibility and value. The NHS provides the guidelines which helps in improving the quality
of service provided by the health and social care sector.
1.4An evaluation of computer software as a mean of managing the financial resources.
The management of the company uses the various software to manage its income, expenses, and
the assets with the objective of maximizing profit and ensuring that all the business operation are
conducted in the effective way. It improves both short term as well as long term performance of
the business by providing the various information to the management. These software helps in
collecting huge information in relation to the operation of the business and helps the
management in decision making in relation to the various area of the business. It also helps the
management to check that the operation of the business is conducted in the planned way. It also
helps in building coordination between various areas of the business and minimize the
paperwork. These software provide ease in maintain huge data and effective analyze of the data
which helps in making informed decision. The new home care has used the certain computer
software to effectively manage the financial resources of the company which are as follows.
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Open accounts- open accounts is the fully integrated software which helps in the medium size
and not for profit organization to effectively record and maintain all there business transaction.
The software can be used by the manager of new health care to make various financial decision
in relation to the business. The software provides accurate management information across tour
entire organization in real time which helps in reducing cost and improves financial visibility.
The major advantage of the software is that it can be easily customized as per the requirement of
the business and provides wide range of facility to the management such as document
management, budgeting and forecasting tools. The major disadvantage of the open account
software is that it usually takes more time in recording the data and the benefit arise from the
software may be less in comparison to efforts made in recording the data.
Cool care- The manager of the new home care can use the cool care software which enables the
home operator to analyze and improve the management of their care facility. The advantage of
the software is that it offers wide range of user friendly elements across every area of home care
management. It is also used by the management as a tool for assessing, planning, implementing
and evaluating the operation of the home care. The software also can be used over the multiple
device which make it more convenient to manage the home care. The major disadvantage of the
software is that the cost of using and maintaining the software is too high which creates the
difficulty for the small scale business to maintain the software. The software helps in effective
managing of the business in the planned way.
Caresys – Caresys is the management system solution which helps in providing the more
efficient way of accessing and sharing information in one easy to use, fully integrated solution.
The software support the new home care with the day- to- day care they deliver to their resident.
The advantage of the software is that it helps in running home care more efficiently and by
integrating all modules into one easy to use solution which gives you more time to care for your
resident. The software maintain centralized data which reduces the need to import and export
data which reduces the duplication of the effort. The major disadvantage of the software is that it
is hard for certain organization to use the software as it doesn’t customize with the existing
structure of the company.
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Company used finance recording system for the data storage. The software is oracle finance. In
this, Software Company provide to supply chain management, customer relationship
management, call center services, product life cycle services. This software is an application
software, and it established for the managed the management services.
Task 2
2.1discuss the various sources of the income that might be for her new care home.
The manger to effectively manage its financial resources need to identify the sources from where
it can raise fund for the operation. The management for the purpose of running the residential
may generate the income which are as follows-
Gift and donation – This is the major source through which the new home care can raise fund
for running its operation. There are many individual, companies or charitable trust foundation
which may provide the fund for the new home care business. The benefit of this sources is also
that the government doesn’t impose tax on it. Organization can conduct some scheme which help
in providing fund for the organization whereas company provide some funding workshop,
donation campaigning which help in raising funds from the others. Donation campaigns are
helpful for the organizations as it help in raising funds in the firm
Grants- The new home care may also receive the fund from the grants which are received from
the government and charitable and are not to be repaid by the management.
Trading- The organization can also earn by selling the product and service to member, general
public or the other organization. These sources can also collect the fund by conducting various
event which attract huge fund for the business.
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Local council- The new care home can also raise fund for its operation from the local council.
These council provides the fund for those organization which are operating for the benefit of the
public to improve the standard of the people in the society. The local council provides the fund to
these council from the fund which is collected through tax from the public.
Private resident-These organization can also raise the fund from those who are residing in their
home care. These organization generally charges a nominal amount from those who are using
their service (Alinezhad, Vahid & Ebrati, 2012).
2.2 factors which may affect the availability of the finance.
There are many factors which affect the availability of the finance, the management needs to
examine the sources from which it can raise fund on the basis of the cost and availability. The
factor which will affect the financing of the new home care are as follows-
Government funding- The fiscal policy of the government has a huge effect on the availability
of the fund for the new home care. If the government will provide the exemption to those which
are providing the fund for the benefit of the employees that they will attract the huge fund for the
business. The government to promote the health and social care provides a huge fund.
Social deprivation index- Social deprivation is the prevention and reduction of culturally
normal interaction between the individual and the rest of the society. The deprivation index
measure the deprivation in the particular area. If the particular area is not economically
developed than it will attract the huge fund from the government to develop the standards of the
public of that region. It will provide ease to the new home care in the availability of the fund for
running its operation (Zarei, Rad, Ghapanchi & Ghapanchi, 2015).
Private funding- There many of the health and social Care business which are funded by the
other institute and individual rather than depending upon the government. Many of the private
institute to improve their CSR donate the fund for the welfare of the health and social care sector
of the company.
2.3 Review the various kind of budget expenditure in health and social care organization.
Cost center –The cost center is the unit of the business which doesn’t produce direct profit but
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