Report: Managing Financial Resources in Health and Social Care

This report provides a comprehensive analysis of financial resource management within the context of health and social care, specifically focusing on The Silloth Nursing and Residential Care Home. It begins by explaining the principles of costing and business control systems, identifying the information needed to manage financial resources, and outlining regulatory requirements. The report then delves into diverse income sources, factors influencing financial availability, and different types of budget expenditure. It also evaluates decision-making processes, methods for managing financial shortfalls, and actions to be taken in cases of suspected fraud. Furthermore, the report assesses budget monitoring arrangements, identifies information needed for financial decisions, and analyzes the relationship between service delivery, expenditure, and cost. Finally, it evaluates financial considerations impacting individuals and proposes ways to improve services through changes to financial systems and processes. The report offers a detailed examination of financial management practices in a healthcare setting.

Managing Financial
Resources in Health and
Social Care

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Explaining the principle of costing and business control system..........................................1
1.2 Identification of information needed to manage financial resources.....................................2
1.3 The regulatory requirement in Silloth to manage financial resources...................................3
1.4 Evaluation of systems to manage financial resources...........................................................3
TASK 2............................................................................................................................................4
2.1 Discussing the diverse sources of income that may be encountered in health and social care
.....................................................................................................................................................4
2.2. Analysing the factors that may influence the availability of financial resources in health
and social care organisations.......................................................................................................5
2.3. what are the different types of budget expenditure in health and social care organisations.5
2.4. Evaluating how decisions about expenditure are made within The Silloth Nursing and
Residential Care Home................................................................................................................6
TASK 3............................................................................................................................................6
3.1 Explaining how financial shortfalls can be managed............................................................6
3.2 Explaining actions to be taken in event of suspected fraud...................................................7
3.3 Evaluating budget monitoring arrangements in HSC............................................................7
TASK 4............................................................................................................................................8
4.1 Identifying information needed for making financial decisions in HSC service...................8
4.2 Analysing relationship among delivered health and social care service, expenditure and
cost...............................................................................................................................................8
4.3 Evaluating various financial consideration which impact on different individuals with
application of health and social care service...............................................................................9
4.4 Ways to improve the health and social care service by changes to financial systems and
processes....................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
A proper management of the financial conditions will help the firm to carry out the
business operations and action plans by the organization. This will also support the proper
placing of the money related operations within a health and social care firm. As health and social
care firm is most vividly operating sector, the proper financial management is required to be
taken by the organization in order to maintain their product quality and meet their patients and
clients needs and demands. For the present assessment, Silloth Nursing and Residential Care
Home is been chosen. It is a UK based health and social care service provider firm.
The present report will focus upon principles of costings and business control system
along with the information required to manage financial resources. The regulatory requirements
and systems for managing finance are been evaluated with financial resources. The diverse
sources of income with factors affecting budget expenses and decision making is been assessed.
Besides this, the financial shortfalls, fraud management and budget monitoring assessments are
been taken in the consideration with effective assessment of the information required to have
financial decision making, relations of health and social care services and financial consideration
are been taken in consideration with ways to improve the health and social care services using
financial system and processes are been evaluated.
TASK 1
1.1 Explaining the principle of costing and business control system
 In the organization Silloth Nursing and residential Care Home the cost system is
essential in order to keep the record of all expenses incurred on each nursing
activity and other action and movement undertaken in health care center. The
principle of costing applied in Silloth Are:
1. Cost related with direct action: the cost incurred is directly related with the cause of
action. There exist a cause relationship between cost and action. The expenses done on a
specific item or activity is directly added to cost of that item only.
2. Charging cost after it is incurred: in the care home cost is charged after it has been
incurred on an article otherwise it can mislead the costing of the product.
3. No post cost: cost incurred after production of are never added in further manufacturing
as this can mislead the cost of the articles and products.
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4. Indirect cost are added on pro rata basis: Cost which is not directly connected to any
particular activity is apportion in all activities to which it is incidental on a pro rata on
percentage basis. The percentage is the link of the activity with that cost.
Business control system:
This can be defined as a process and procedure which helps the Silloth organization to
achieve its mission and objectives (What Are the Control Systems of a Business?, 2018). Control
is kept on how employees conduct themselves and how expenses are incurred and operations
are carried out.
In this organization business control system is carried out a mechanism through which
the management or buyer purchases all products and articles required for conducting activities
in Nursing home. This is a systematic way through which suppliers are searched and biding are
done to acquire products at minimal or effective cost.
1.2 Identification of information needed to manage financial resources
The different cost that are required by the care home in order to determine accurate
expenses can be classified as follows:
Direct cost: this is the cost which is directly associated with a product, activity or article
of care home. The direct cost in Silloth can be identified as cost of bed for elderly individuals,
foods and refreshment on elderly people and medicines and medical equipment cost on those
elderly patients. This is just an example as all the expenses incurred on treatment and care of
elderly individuals are summed up in a single category. Same is done for other activities, cost
and expenses related with a specific actions are added under that category only.
Indirect cost: these are the cost which cannot be linked directly with any activities. The
cost is incurred on overall Silloth Care home or on two or more than two activities (Berger,
2014). The best example for this is electricity expenses, as this electricity is used in each and
every activity in care home so it can be directly associated with a single activity. Indirect cost is
apportioned among all the activities on a pro rata basis or percentage of usage in that particular
action.
Variable cost: This is the cost which varies with each year and changes constantly. This
changes with level of production and level of activities.
Fixed cost: Fixed cost is that cost which do not change with change in level activity or
production. This cost remains fixed irrespective of number of items manufactured.
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1.3 The regulatory requirement in Silloth to manage financial resources
 Generally Accepted Accounting Principles generally known as GAAP are basically the
common principles of accounting or standards practiced by the Companies/
Organizations while preparing their Financial/ Accounting Reports for any financial year.
The most common GAAP principles are as follows-
 Monetary unit assumption
 Going Concern Principle
 Matching principle
 Full Disclosure Principle
 Accounting Principles
These are certain principles used by the various Silloth Care home. With this standards
are set for the quality services and to maintain transparency in the accounting work (Bedos and
et.al., 2014). The Silloth care Home must also follow International standard for financial
recording (IFRS) this are the guidelines which business must abide by in order to maintain
accurate and transparent record of all the national and international transaction taken place
within the organization. With these there are certain more standards which are stated by
regulatory authorities to keep record of financial transaction in health and care organization,
specifically.
With this it can be stated that Silloth Home care is mandatory required to abide by this
accounting principles and standards in order to have a unanimity in keeping all financial
transaction will all other organization in same industry.
1.4 Evaluation of systems to manage financial resources
This can be defined as the software and techniques which are applied in Silloth care
home to maintain record of the all financial transactions. These are:
Open Accounts: this is basically software which is used in the Accounting system and it
includes all the finance functions of the whole enterprise. It is best suited from medium to large
sized Enterprises. With this software Silloth Care Home can maintain accounts and track record
of individual activities of their health and medical history and their prescription, record of life
and health insurance.
Care Sys: this is a software for management and care services regarding the home care
unit. With this software a fully integrated solution to Silloth health care is provided in from of a
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detail and precise arrangement of all data, records and information of activities undertaken in
the social health care organization.
With all these software Silloth Care Home get a in detailed solution for managing tis data
and information. This is very essential to have a precise system in the organization for data
management. As with no perfect data recording system the information related with all
activities of the organization will pile up and when an information is needed it can be accessed as
their in no proper record keeping of the data has been done. Hence to have a software system
which is applicable in the whole organization unanimously is essential for Silloth Home care.
TASK 2
2.1 Discussing the diverse sources of income that may be encountered in health and social care
There are various sources for income that can be generated by The Silloth Nursing and
Residential Care Home. There are some sources through which health care facilities can also
gain the revenue if they need to operates. The different sources of income for The Silloth
Nursing and Residential Care Home are :
 Government aid: many time government provides funds to the hospitals and health care
home through subsidies and grants. The national and state government health care
revenue from tax and wage deductions from the citizen of the employees (Giddens,
2013). Getting proper healthcare is one of the policies of the government for which they
grant revenue to the healthcare.,
 Through patients or sales revenue: health care patients ate the majority in terms of
generating revenue for The Silloth Nursing and Residential Care Home. Patients goiving
fee or money for getting health care and medical services without the help of third party.
Direct revenue from the patients depends on the type of facility they are getting from the
health care home.
 Premiums: the amount of the premium patients give to the insurance company are also
the major sources of The Silloth Nursing and Residential Care Home revenue.
 Private donations: The Silloth Nursing and Residential Care Home also get funds from
the corporate or the individuals in the form of donations and charity. This is very unstable
and unpredictable sources of income for the hospital firm. The individuals and corporate
pays donations from the tax deductible purposes also.
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2.2. Analysing the factors that may influence the availability of financial resources in health and
social care organisations.
There are several factors in he factors that may influence the availability of financial
resources in health and social care organisations The Silloth Nursing and Residential Care Home
They are:
Technology: with the increasing of medical technology, he factors that may influence the
availability of financial resources in health and social care organisations (Durlak and et.al.,
2011). Needs yo implement more technological services for the patients. Technology is the most
significant impact on the available financial resources of the The Silloth Nursing and Residential
Care Home
Healthcare product and services: the level and healthcare prices have a great influence on the
financial availability. Providing more services and products are increasing the spending of The
Silloth Nursing and Residential Care Home
Market power: hospitals, physicians and other providers have been merging with each others
and are giving competitions. It can increase the influence on the available finance as well as can
ledas to increase in 5 percent or more hospital prices.
Provider-sponsored health plan: many health care homes has launched health plan, if ot
continues it can leads to increase the spending of the The Silloth Nursing and Residential Care
Home (Houston, 2014). It could reduce the market shares that are lead buy the main competitors
of the organisation.
2.3. what are the different types of budget expenditure in health and social care organisations.
Budget can be defined as the estimation of the future revenue and expenditure of the
company which are based on the prior years performance. There are various types of budgets that
being prepared by The Silloth Nursing and Residential Care Home yearly, which helps the
management to determine the current and future performance of the health care. 5The budgets
helps in planning effectively and efficiently the financial plan of the hospital (Song and et.al.,
2011). The different types of budgets in The Silloth Nursing and Residential Care Home are:
 Master budgets: it is aggregate of all the budgets that helps The Silloth Nursing and
Residential Care Home to view the complete picture of its financial health and activity
(Vamplew, 2016). This budgets combines all the factors like sales, operating expenses,
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income streams etc. it helps The Silloth Nursing and Residential Care Home to
established its goals. And helps in evaluating the overall performance.
 Operating budget- this budget helps in analysing the total income and expenses over a
specific period of time. Operating budgets includes sales, production, labour cost,
material cost, overhead etc. and administrative expenses of The Silloth Nursing and
Residential Care Home
 financial budgets: this budgets helps in estimating the hospitals strategies and policies to
manage the cash flow,income and expenses. The Silloth Nursing and Residential Care
Home prepares the financial budget in order to view the complete picture of the financial
performance of the hospital which helps in presenting the comprehensive overview of its
spending relative to its core operation.
2.4. Evaluating how decisions about expenditure are made within The Silloth Nursing and
Residential Care Home.
Making proper decisions regarding the expenditure is very important in order to manage
the resources in The Silloth Nursing and Residential Care Home. A lot of analysis has to be done
by finance departments on the expenditure on any project of hospital. One of such analysis can
be cost-benefit analysis. CBP is a process that are used to analyse the decisions before starting or
thinking of a new project or plan in hospital. It helps in evaluating the potential cost and revenue
which can be earned after completed the project (Barr, 2012). It helps The Silloth Nursing and
Residential Care Home to make effective decisions whether to invest of expend on the project or
not. Another type of analysis that can be done by The Silloth Nursing and Residential Care
Home before taking decisions on spending is scanning the environment or the market through
SWOT analysis and PESTEL analysis. It helps in evaluating the factors that can impact the
business of The Silloth Nursing and Residential Care Home and also helps in making strategies
and decisions making in order to overcome from the situations.
TASK 3
3.1 Explaining how financial shortfalls can be managed
Financial pitfalls are accomplished particularly when obligations of firm become due but
it lacks ability to make payment for it. Silloth Nursing and Residential Care Home can have bad
consequences on it and unnecessary increment in cost is made. There are variety of ways by
which financial pitfalls can be managed by organization. Additional finance can be raised from
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shareholders by selling an extra share (How to solve financial pitfalls. 2018). It is effective
method as money provided by them need to be repaid as only returns garnered is to be paid in the
form of dividends.
Another way is to go in for negotiation of early contract receipts. Negotiating the contract
with partners even before contract obligations will lead to avoidance of financial pitfalls.
Another way for eradicating financial pitfalls is by limiting selling on credit to customers and
focusing mainly on cash sales. This will have Silloth Nursing and Residential Care Home to
enhance its liquidity position and it will be in a position to attain more cash position which will
provide HSC to attain efficiency as cash position will be improved. Thus, by implementing such
ways, financial pitfalls can be effectively managed in firm and no difficulties will prevail leading
to better position in the market.
3.2 Explaining actions to be taken in event of suspected fraud
Fraud is termed as a criminal activity which can have various factors namely to abuse
position, falsely representing financial statements with the aim of gaining from it etc. Frauds can
be analysed such as eradicating business assets. It can be done by managers, employees who
steal assets of firm. Another fraud is falsely preparing financial statements reflecting incorrect
position of company (Babajana and Phillips, 2015). The actions which should be taken in event
of suspected fraud is that complete in-depth analysis can be done in a better manner by applying
inquiry. It should involve inquiry all relevant people which might be lead to fraud.
Next step is to carry out investigation into facts and then make consultation and report the
same case to police for conducting independent investigation and assess possible culprit to make
them punish. Employees are under the duty to report to the higher authority if any fraudelent
activities are involved which might hamper Silloth Nursing and Residential Care Home to high
extent. Reporting to top management saves time for exploring case and speedily fraudsters can
be punished with evidence in hand.
3.3 Evaluating budget monitoring arrangements in HSC
The budget monitoring is termed as a process aiming to ensure action plans are
effectively accomplished with reference to income and expenses. It makes perfect monitoring
that actual expenditures are in accordance to planned expenses and in case of deviations, actions
can be taken to remove the same up to a major extent in Silloth Nursing and Residential Care
Home. It has four steps such as first is forecasting of income and expenses are done, budget is
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produced and gets it approved (Malik, Field and Gorwood, 2016). In next step, actual
performance is measured with that of planned one. The third stage consists of initiating variance
analysis for identifying nature of difference between budgeted and planned performance in the
best way possible.
The final stage is done in order to make corrective actions and improvements are done in
both performances so that it may be eradicated in next period and improvements can be initiated
so that actual performances should be in accordance to budgeted performances in effective
manner. Thus, it can be concluded that by implementing budget monitoring arrangements,
Silloth Nursing and Residential Care Home can be able to attain efficiency and performance can
be monitored.
TASK 4
4.1 Identifying information needed for making financial decisions in HSC service
The information should be timely available in Silloth Nursing and Residential Care Home
so that financing decision-making may be made with ease. It can be analyzed that financial
statement should be effectively reviewed and then financing decisions could be made.
1. Information for assets- It is one of the important way and information can be extracted from
statement of financial position in effectual manner (Bryson, 2017). This provides clarity when
firm has to pay for short-term obligations which becomes due within one year. Hence, Silloth
Nursing and Residential Care Home may be able to analyze and take information from balance
sheet of it.
2. Information regarding profitability- It is another important piece of information with the help
of which health and social care may be able to develop strategies if profit level is not adequate
over the years. This helps firm to initiate control over its expenditures in order to increase
revenue and profit level in the best manner possible. Thus, with the help of such information,
firm will be able to make proper financial decisions by which efficiency can be enhanced.
4.2 Analysing relationship among delivered health and social care service, expenditure and cost
There are various factors which should be considered pertaining to quality of service user
like conducive and safe environment, comfort and happiness of service user, approach which is
person centred and patient outdoor activities. In the similar aspect, quality care is referred as
comprehensive care service deliveries which accomplishes requirements along with service
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users' aspiration. It has been perceived that quality care at particular moment has huge
requirement of various improvements (Stoddart and Evans, 2017).
There is presence of direct link between social and health care services along with cost
and expenditure. The quality service could be delivered as Silloth Nursing and Residential Care
Home has need for investing in people, facilities and equipments. In the same series, service
quality is raising with context of investment as there is link among demand and service with
objective of incurred cost and service for providing specific services as it also impact for
incurring sum of expenses through business entity. However, with this increment, there is
decrement in unit cost due to economy of sales.
Manager must be capable for endeavour for understanding service user's need, training
and staff development along with necessary required equipment which supervise and monitor
services. To invest in these particular priorities then it will give outcome of service users'
satisfaction and quality care service as well.
4.3 Evaluating various financial consideration which impact on different individuals with
application of health and social care service
In the present scenario, there are various financial considerations must be undertaken for
taking financial decision. It includes numerous sources of finance to its profitability of services,
fund expenses and priority with context of expenditure. These specific considerations provide
major effect on user of health and social care service. The Silloth Nursing and Residential Care
Home takes decision by undertaking consideration of sources of finance to fund its expenditure
gives major effect in direct or indirect aspect. This business entity must select to fund its
expenses with increment in prices for specific services. Hence, service user has requirement of
huge prices for attaining incurred cost to serve (Tanner, Ward and Ray, 2018).
The availability of various financial resources are scare for purpose of funding each
activity of this Silloth Nursing and Residential Care Home. Funding might be done with
reference to priority as it is logical for funding project or program which would be beneficial for
large population with context to business entity and service user. It has presence of stream which
produces revenues and creates sense to organisation. The activity which is creating loss could be
stopped and tries for offering crucial and essential service to its particular consumer. The margin
of different revenue stream along with numerous services which helps for determining service
availability. In the same series, services are accessible easily and might not also due to inability
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of creating appropriate profit for organisation. Thus, service users will gain excellent and
comprehensive care as it would be customised and person centred (Watkins and et.al., 2017).
4.4 Ways to improve the health and social care service by changes to financial systems and
processes
In a health and social care service provider like the selected firm, there is a need of
constant improvement in the services and products is imminent. The proper management of this
operation will support the effective rise in customer satisfaction level (Sommers, Gawande and
Baicker, 2017). The effective and proper management of various financial management system
will help the firm to enhance the quality of business activities and operations which will support
a proper rise in placing of suitable practices in an effective manner. Some major ways to
improve health and social care services related to change in the financial system are as follows:
 The proper implementation of effective ICT tools like ERP software's, inventory
management system (IMS), Transaction processing system (TPS) etc that will help the
selected health and social care service provider to improve their operations.
 The proper training and knowledge of the work force that will help the organization will
support their nursing activities and thus will support the effective placing of business
operations and action plans.
 Hiring the skilled labor is also an effective way that will support the improvement of
health and social care services (Epstein, 2018).
Proper monitoring of the expenses and gains obtained by the selected health and social care
service provider that will support the effective placing of business activities in much suitable
manner.
CONCLUSION
From the above report it can be concluded that in Silloth Nursing and Home care
business also have a need to manage is financial resources in order to keep a track of all expenses
incurred and on which activity. The organization needs to manage funds as with this funds only
they make their payments such as salaries, maintenance of care home and other essential
expenditures. The organization applied different techniques of costing and business control in
order to keep a track of cost incurred. Planning plays an important role in management of the
fund as with this only it is estimated that which activity requires how much funds and activities
on which more expenses are incurred a control system is applied there.
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Further it can be articulated that preparation of budget and monitoring the expenses
actually incurred increase the cost efficiency in Silloth. Form last part of the report it has been
interpreted that application of cost and management systems and processes increased the cost
and overall efficiency and performance of Silloth Nursing and Care Home. With this it can be
interpreted that despite of nature and size of the organization management of fund for a business
is must and no business can assure its survival and long term profitability without managing the
funds, cost, expenses and revenues. The same is applicable for Silloth Care home as well and
being a social care organization it need to follow regulation that are formed by regulatory
authorities in this respect.
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REFERENCES
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Berger, S. 2014, Fundamentals of health carefinancial management: a practical guide to fiscal
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Bryson, J., 2017. Effective library and information centre management. Routledge.
Durlak, J. A. and et.al., 2011. The impact of enhancing students’ social and emotional learning:
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Epstein, M.J., 2018. Making sustainability work: Best practices in managing and measuring
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Giddens, A., 2013. The third way: The renewal of social democracy. John Wiley & Sons.
Houston, R. A., 2014. Bride Ales and Penny Weddings: Recreations, Reciprocity, and Regions
in Britain from the Sixteenth to the Nineteenth Centuries. OUP Oxford.
Malik, A., Field, C. and Gorwood, P., 2016. Managing financial resources in healthcare
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Sommers, B.D., Gawande, A.A. and Baicker, K., 2017. Health insurance coverage and health—
what the recent evidence tells us.
Song, Z. and et.al., 2011. Health care spending and quality in year 1 of the alternative quality
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Stoddart, G. L. and Evans, R. G., 2017. Producing health, consuming health care. In Why are
some people healthy and others not? (pp. 27-64). Routledge.
Tanner, D., Ward, L. and Ray, M., 2018. ‘Paying our own way’: Application of the capability
approach to explore older people’s experiences of self-funding social care. Critical
Social Policy. 38(2). pp.262-282.
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Vamplew, W., 2016. Empiricism, theoretical concepts and the development of the British golf
club before 1914. Sport in Society. 19(3). pp.425-454.
Watkins, J., and et.al., 2017. Effects of health and social care spending constraints on mortality
in England: a time trend analysis. BMJ open. 7(11). p.e017722.
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https://nowfinance.com.au/how-to-solve-financial-shortfalls/
What Are the Control Systems of a Business?.2018. [Online]. Available through :<
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