Financial Resource Management: A Comprehensive Report on CareTech Plc

This report provides a comprehensive analysis of financial resource management within CareTech Holdings Plc, a healthcare sector organization. It begins by explaining the principles of costing and business control systems, differentiating between fixed and variable costs, and emphasizing stakeholder engagement, consistency, and data accuracy. The report outlines the information required for managing financial resources, including income, expenses, and compliance with regulatory bodies like CQC and HMRC. It evaluates different systems for managing financial resources, such as financial accounting and payment systems, and identifies various income sources available to CareTech Plc, including sales and share capital. Furthermore, the report analyzes factors influencing the availability of financial resources, such as the type of service delivered and geographic location, while also reviewing different types of budget expenditure. It explores how decisions about expenditure are made, how financial shortfalls can be managed, and actions to be taken in case of suspected fraud, along with an evaluation of budget monitoring arrangements. The report also discusses the information required for making financial decisions, the relationship between health and social care services, costs, and expenditure, and the impact of financial considerations on individuals. Finally, it suggests ways to improve health and social care services, concluding with an overview of the importance of finance in the healthcare sector and its impact on CareTech Plc's operations.

MANAGING FINANCIAL
RESOURCES

EXECUTIVE SUMMARY
Managing financial resources play most crucial role in organization as it is associated
with the growth and development of the business in the market. The present report being carried
out is based on CareTech holding plc which operates in health care sector. Further, Costing is
regarded as a system of assigning costs to an element of organization. Further, assignment can be
done in the form of fixed or variable cost. Its different principles are stakeholder engagement,
data accuracy, consistency etc. Moreover, Employees working in CareTech holding plc requires
different type of information for managing financial resources. CareTech holding requires
information regarding income and expenses of the firm.
Apart from this, Different laws have been introduced by government in healthcare sector
which CareTech holding plc has to comply with. CQC is one of the main body which has
introduced guidelines and as per the regulations it is required for CareTech holding to ensure that
financial resources within the firm are present in appropriate manner. Different sources of
income are present which CareTech plc can consider for satisfying its financial need and it
allows business to operate efficiently such as sales, share capital etc. Further, factors which can
affect availability of financial resources within CareTech Plc are type of service delivered,
geographic location etc. Caretech holding has two type of expenditure which involves revenue
and capital. Revenue expenditure is the one which is associated with food, utility, staff etc and
capital one is linked with investment. The entire study carried out has supported in understanding
the need of finance in healthcare and this can bring favorable results for business. CareTech
holding carries out overall operations on wider basis due to which financial needs of company is
large.

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Explain principles of costing and business control systems (180)........................................1
1.2 Information needed to manage financial resources...............................................................2
1.3 Regulatory requirement while managing financial resources...............................................2
1.4 Evaluation of systems for managing financial resources......................................................3
2.1 Sources of income available to CareTech Plc.......................................................................3
2.2 Analyze factors that may influence availability of financial resources.................................4
2.3 Review different type of budget expenditure........................................................................5
2.4 Evaluate how decisions about expenditure can be made.......................................................5
3.1 How financial shortfalls can be managed..............................................................................6
3.2 Actions to be taken in event of suspected fraud....................................................................6
3.3 Evaluation of budget monitoring arrangements....................................................................7
4.1 Information required for making financial decisions............................................................7
4.2 Relationship between health and social care service delivered, cost and expenditure..........8
4.3 Evaluate how financial considerations impact upon individual............................................8
4.4 Ways to improve health and social care service....................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Managing financial resources play most crucial role in organization as it is associated
with the growth and development of the business in the market. Further, it is well known fact
that finance is one of the most crucial resource of organization without which it is not possible
for company to accomplish desired goals (Diefenbach, 2006). Moreover, to satisfy financial
needs various sources are present with company through which it becomes easy for firm to carry
out overall operations in the market and acts as development tool. Apart from this, different
types of costs are present which are associated with the firm such as fixed, variable etc.
Moreover, budgets are prepared for determining present performance of business in the market.
For conducting the present study organization chosen is Care Tech Holdings Plc which operates
in health care sector. Further, business delivers large number of services to its target market as
per their expectations. Various tasks have been covered in the study which is principles of
costing, regulatory requirement while managing financial resources, different type of budgets
etc.
TASK 1
1.1 Explain principles of costing and business control systems (180)
Costing is regarded as a system of assigning costs to an element of organization. Further,
assignment can be done in the form of fixed or variable cost. Main reason behind costing is for
internal as well as external reporting (Drake and Fabozzi, 2012). Top authorities of company use
costing to gain information regarding cost of operations and in external reporting costs are
allocated as per the inventory recorded by business. Further, different principles of costing are
present which CareTech holding plc has to follow and they are as follows:
 Stakeholder engagement: it is regarded as one of the main principle which states that
costing requires input from different type of stakeholders which takes into consideration
frontline staff along with departments who are indulged into practices of delivering
healthcare services to the patients.
 Consistency: This approach to costing is being required within and across the business.
With the motive of pricing along with benchmarking it is necessary for CareTech holding
to undertake consistent approach (Hung and Subramanyam, 2007).
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 Data accuracy: As per this principle costs can be accurately determined if proper data is
present. It considers different type of costs such as patient level, reference cost etc which
requires information from different sources.
So, these are some of the principles of costing which CareTech holding has to undertake
with the motive to understand its significance. Further, each and every principle is associated
with one another such as data accuracy, stakeholder engagement etc. Further, different type of
costs are present which CareTech holding has to be bear and it involves fixed, variable etc. Fixed
cost does not changes with the alteration in level of output and involves building insurance,
depreciation on building, electricity etc (Jakhotiya, 2002). On the other hand variable cost
changes with the alteration in level of output and involves employer payroll taxes, overtime pay
etc. Moreover, business control systems are present which involves budgetary control system
through which CareTech holding can determine actual results with budgeted figures for
determining variance. Apart from this cost control systems are also present with the help of
which healthcare enterprise can save major costs and can support in enhancing profitability level.
1.2 Information needed to manage financial resources
Employees working in CareTech holding plc requires different type of information for
managing financial resources. CareTech holding requires information regarding income and
expenses of the firm. Further, it is well known fact that for delivering healthcare services
business has to bear large number of expense and data regarding same is obtained with the help
of different type of statements such as balance sheet, profit and loss account etc (Jin, Yu and Mi,
2011). Management of financial resources is must for business as sometime it may be possible
that overall costs of company may rise due to which overcoming this type of condition is
necessary. Further, data regarding revenue is also required as CareTech holding can gain such
type of information with the help of its financial statements. Main income sources of company
are donation, sponsorship etc and information is required where all the sources of income are
utilized in appropriate manner or not.
1.3 Regulatory requirement while managing financial resources
Different laws have been introduced by government in healthcare sector which CareTech
holding plc has to comply with. CQC is one of the main body which has introduced guidelines
and as per the regulations it is required for CareTech holding to ensure that financial resources
within the firm are present in appropriate manner so that acceptable quality services can be
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offered to patients. Therefore, this is effective enough in satisfying need of service users in
healthcare. Moreover, it is well known fact that to raise quality level of service adequate funds
must be present with healthcare enterprise. Further, HMRC is also another body who has
introduced guidelines in relation with the payment of taxes (Epstein and Buhovac, 2014).
CareTech holding has to ensure that proper taxes are paid by company on time and this supports
in know the real income left after payment of taxes and duties. Apart from this companies house
is also another body whose main motive is to declare true and fair statements so that parties
associated with the organization can gain appropriate information regarding the overall
performance of business in the market. So, these are some of the regulatory requirement of
government which CareTech holding has to comply with.
1.4 Evaluation of systems for managing financial resources
Different systems are present which CareTech holding can undertake for managing
financial resources and they are as follows:
 Financial accounting system: This system can support company in monitoring and
recording the daily transactions such as inflow and outflow of cash. Further, it is possible
for organization to track all the financial transactions and overall performance of
CareTech holding can be known easily. One of the main advantages of this type of
system is that it helps in taking appropriate decisions for future. On the other hand, main
disadvantage of this system involves competent staff is required who can keep proper
books of accounts (Herman, 2011).
 Payment system: It is another type of system which business can undertake for managing
financial resources. Through this system it becomes easy to settle financial transactions
by transferring monetary value. Further, CareTech holding carries out all the transactions
electronically through debit, credit card etc. By undertaking this system it is possible to
manage financial resources. Main advantage of undertaking this type of system is that it
saves time and control major expenses of the business. Further, its main disadvantages
involve risk of being hacked and necessity to have internet access.
2.1 Sources of income available to CareTech Plc
Different sources of income are present which CareTech plc can consider for satisfying
its financial need and it allows business to operate efficiently in the market. Generally both
internal along with external sources are present. Such sources are as follows:
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 Sales: CareTech holding earns income by delivering different type of healthcare services
to patients. It is one of the main internal sources of income where services are delivered
to users as per their expectations. Further, it allows business to accomplish its long term
aims along with objectives (Loucks and et.al., 2005).
 Share capital: It is possible for enterprise to issue shares in the market and financial
needs can be satisfied through investors. This source of income is internal where
healthcare enterprise can issue shares at an nominal price (What to include as income.,
2012).
 Central government: It is an external source of income which CareTech holding can
undertake for its betterment. Generally, government of UK provides financial help to
healthcare business and it is beneficial for CareTech holdings also.
So, these are some of the main sources of income which can assist company in satisfying
financial needs.
2.2 Analyze factors that may influence availability of financial resources
Large numbers of factors are present which can affect availability of financial resources
within CareTech Plc. Such factors are as follows:
 Type of service rendered: It is regarded as one of the major factor which influences
financial availability of financial resources within business. Different types of services
are delivered by business such as visual therapy, residential support, transition program
etc. In case if the service rendered is wide then large finance is required for the same.
Apart from this, delivering visual therapy requires advanced equipments and tools which
also increases financial needs of the business (Natcher, Davis and Hickey, 2005). Main
advantage of undertaking this factor is that financial needs are determined keeping in
view type of service. On the other hand main disadvantage is that it does not supports in
knowing the exact funds required.
 Geography location of particular health organization: Company like CareTech holding
Plc is located in the middle of the city. Further, larger numbers of users arrive on daily
basis to purchase healthcare services and due to this reason financial requirement of
business changes as services have to be offered accordingly by business. One of the main
benefits of considering this factor is that it supports in avoiding the situation such as
inadequacy of finance but on the other hand it becomes difficult to determine financial
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requirement on the basis of geographic location (Nickels, McHugh and McHugh, S.,
2011).
2.3 Review different type of budget expenditure
Budget is regarded as an estimate of income and expenditure for a given period of time.
CareTech holding plc prepares budget with the motive to know what are the key sources through
which business is receiving income and the range of activities which are acting as expense for
organization. Preparation of budget assist in proper management of financial resources and is
fruitful for business in every possible manner. Further, different types of budget expenditure are
present which CareTech plc has to bear and it reduces the profitability level of the firm.
Company prepares HR budget which takes into consideration major costs such as staffing,
recruitment, training etc. Firm has to incur cost in delivering training to its workforce and hiring
them (Swayne, Duncan and Ginter, 2012). This budget supports in knowing the expenditure level
and corrective actions can be taken if expenses are rising. Further, marketing budget is also
prepared through Caretech plc knows the amount invested by business in advertising and
marketing activities. So, it becomes easy to control all the major expenses linked with
promotion. Apart from this, healthcare organization is highly indulged into research and
development activities due to which R&D budget is prepared and this assist in knowing the
funds allocated in carrying out development activities and benefits obtained through this. So,
these are some of the main budget expenditure for business.
2.4 Evaluate how decisions about expenditure can be made
Decisions linked with expenditure are critical and are directly associated with success of
business in the market. Caretech holding has two type of expenditure which involves revenue
and capital. Revenue expenditure is the one which is associated with food, utility, staff etc and
capital one is linked with investment. Regarding expenses decisions have to be taken in
appropriate manner as when level of expenses raises then profitability level of firm is adversely
affected. Apart from this different criteria’s are present which CareTech holding plc can
undertaken in order to take decisions regarding expenditure (Xanthopoulou and et.al., 2009).
Setting priorities is one of the main stage where business can set priorities and funds can be
easily allocated in the areas which are necessary for organization. Further, it is possible for
company to identify the range of activities which are linked with its success and costs can be
allocated accordingly. Apart from this, cost benefit analysis is also one of the most significant
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criteria where business can identify the cost which has to be indulged into each activity and the
overall benefits which can be derived from the same. Therefore, in this way these two criteria’s
can support firm in taking decisions regarding expenditure.
3.1 How financial shortfalls can be managed
It is regarded as the amount by which financial obligation exceeds amount of cash
available with business. For Caretech holding plc it is necessarily required for business to ensure
that business may not have to face situation of financial shortfall. Main consequences of this can
be damaged relationship with suppliers of healthcare as company may not be able to make
payment on time (Aggarwal and Koo, 2008). Lost opportunity for new mission building
activities can be another consequence of financial shortfall where company may not be able to
grab opportunities in the market for accomplishing its mission. Apart from this, to manage
overall situation of shortfall CareTech holding can delay significant expenditure where it is
possible for business enterprise to focus on the expenditures which are crucial and other one can
be delayed for smooth functioning of operations. Introduction of new payment option is also one
of the ways which CareTech holding can undertake such as automatic payment with the help of
advanced machines and through this it is possible to manage such adverse situation.
3.2 Actions to be taken in event of suspected fraud
Fraud is regarded as the intentional act of deception which takes into consideration
financial transactions with the motive of personal gain. Further, red flag assists in determining
the areas where chances of fraud occurrence is possible. Company like CareTech holding carries
out operations on wider basis due to which identifying the major areas of fraud is necessary and
it assist business in preventing such issues. Financial performance red flag is present which
supports in determining the level of fraud which influences financial performance of business in
the market (Austin, Stevenson and Wei‐Skillern, 2006). In healthcare businesses fraud can occur
at both personal and organizational level. Further, as per the provision of Fraud Act 2006, fraud
at personal level takes place when any type of data is shared with individual for personal benefit
and at business level such tasks can be unfavorable for company. Moreover, with the motive to
identify fraud following stages can be followed:
 Enquiry: It is the first stage where management of CareTech holding can carry out
enquiry in relation with fraud. Further, after conducting enquiry it is possible to take
corrective actions so as to minimize level of risk.
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 Risk ranking: It is the next stage to prevent risk where company can consider them on
the basis of priorities and they can be tackled easily.
 Risk mitigation: In this stage business can suspect the fraud by decreasing the risk of
action which has already taken place in the firm.
So, these are some of the key stages which can be followed at the time of fraud. Further,
at the time of fraud it is necessary for CareTech Plc to take corrective actions and appropriate
plan can be prepared for the same. Range of actions which manager can take at the time of fraud
is that preparing effective plan so as to overcome with the issue and encouraging staff members
to give suggestions that can be implemented easily.
3.3 Evaluation of budget monitoring arrangements
Budget is regarded as the statement prepared by business with the motive to forecast
future financial tasks by considering revenue along with expenditure. Through monitoring it is
possible to identify variances which are the difference between actual and budgeted figures. For
enhancing overall performance CareTech holding can undertake monitoring arrangements which
takes into consideration review by audit committee where committee can ensure whether
business is performing as expected or not (Arffa, 2001). Further, variance analysis is also
beneficial which the difference between actual and budgeted figures is. Through this firm can
take corrective actions if company is underperforming. Apart from this, monitoring reports on
monthly basis is also one of the most effective ways through which monitoring is possible and
the major areas can be known where CareTech plc is spending.
4.1 Information required for making financial decisions
Different type of information is required for making financial decisions within CareTech
holding plc. Further, both internal as well as external information is required by managers. Some
of the crucial information needed is sources of income where CareTech plc has to know what are
the key sources through which business is earning income such as rendering healthcare service,
government grant etc. Priority is the another type of information where company has to identify
what are its priorities, data linked with strategic goals is also required and plans on the basis of
which financial decisions are taken such as allocation of resources etc (Carmichael, 2011). Apart
from this, large numbers of factors are present which affects financial decision of business such
as shareholder requirement where company has to determine requirement of every party
associated with firm, growth is another factor where organization has to consider its growth at
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the time of taking financial decisions. On the other hand, for making financial decision most
commonly adopted tool is decision about managing risk with the help of which it is possible to
take corrective actions so that level of risk may decline and actions can be taken regarding same.
4.2 Relationship between health and social care service delivered, cost and expenditure
Their exist direct relationship between service delivered, cost and expenditure within
health and social care. Further, it is well known fact that to deliver better service high cost is
allocated by business and this enhances overall expenditure level. Further, increasing quality
level is also costly for CareTech holding plc as business has to employ advanced tools so as to
accomplish this objective. Other factors such as commitment from staff are also crucial as
through this quality care can be provided to service users where each employee contributes
maximum in delivering quality service. Further, better monitoring arrangement is also beneficial
where business can monitor its key activities on continuous basis and this assist in delivering
acceptable quality service (Carr, Kolehmainen And Mitchell, 2010). In short, relationship
between service delivered, cost and expenditure is direct where rise in level of cost assist in
rendering better service as per expectation of service users. Apart from this, cost benefit analysis
supports in knowing the relationship where business can determine the overall cost of delivering
high quality service along with benefit obtained through this such as rise in satisfaction level of
user etc. CareTech holding plc can compare cost along with benefit for performing better.
4.3 Evaluate how financial considerations impact upon individual
Financial consideration is regarded as the factor which has direct impact on level of
access and provides base in delivering health services. Such factors are income and financial
position, health, illness etc. Mean testing can be defined as efficiency of managing income and
capital of the firm. If management of CareTech holding plc manages their financial sources in
effecitve manner then they will be able to satisfy need of serviced users and render them quality
services (Herman, 2011). However, in situation their strategies are inefficient of financial
management then there will be adverse impact on quality of services. Eligibity highlights the
suitability of assets in accordance with the current situation in health care industry. If available
assets with CareTech holding plc are not in accordance with the requirement of patients then
quality of service will be adversely affected. On the other hand, management of entity is capable
to manage their assets with the changing situation then they can cure diseases of patients in best
possible manner.
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4.4 Ways to improve health and social care service
In order to improve health and social care service CareTech holding can change its
financial system and processes. Further, it is necessary for business to consider the range of
options available of changing financial system. Through alteration business can receive more
options with the help of which it is possible to utilize the range of financial resources in effective
manner. Apart from this, through more funds it is possible to enhance the quality level of
services and can support CareTech holding to satisfy need of service users in efficient manner.
Through funding support it is possible for enterprise to enhance the overall level of service and
can bring favorable results for organization in every possible manner.
CONCLUSION
The entire study carried out has supported in understanding the need of finance in
healthcare and this can bring favorable results for business. CareTech holding carries out overall
operations on wider basis due to which financial needs of company is large. Further, the
principles of costing identified are necessary on the basis of which it is possible for organization.
Apart, from these different sources of information are present which CareTech holding plc can
undertake with the motive to utilize its financial resources in efficient manner.
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