Analysis of Financial Resource Management in Care Tech Holdings Plc

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Managing Financial Resources in Health
and Social Care
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Contents
Introduction....................................................................................................................................4
LO1..................................................................................................................................................5
1.1....................................................................................................................................................5
1.2....................................................................................................................................................6
1.3....................................................................................................................................................6
1.4....................................................................................................................................................7
LO2..................................................................................................................................................9
2.1....................................................................................................................................................9
2.2....................................................................................................................................................9
2.3..................................................................................................................................................10
2.4..................................................................................................................................................11
LO3................................................................................................................................................13
3.1..................................................................................................................................................13
3.2..................................................................................................................................................13
3.3..................................................................................................................................................14
Lo4.................................................................................................................................................16
4.1..................................................................................................................................................16
4.2..................................................................................................................................................16
4.3..................................................................................................................................................17
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4.4..................................................................................................................................................18
Conclusion....................................................................................................................................19
References.....................................................................................................................................20
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Introduction
The report considers an organization named Care Tech Holdings Plc. which is specialist in social
health & care services. This report explains the principals of costing & business control system
that can be adopted by Care Tech Holdings Plc. for improving cost efficiency. It contains the
required information or regulatory requirements that should be satisfied by Care Tech Holdings
Plc. for managing the financial resources. This report considers the diverse source of income &
reviews the different types of budget expenditure in Care Tech Holdings Plc. report also evaluate
the budget monitor arrangements in Care Tech Holdings Plc. At the end of this report identifies
the information which is required to make financial decisions relating to Care Tech Holdings Plc.
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LO1
1.1
After Applying the costing principals, care Tech Holdings Plc. Is able to ensure the true & fair
view of what cost or services is delivered to the patient care. Costing principals are very helpful
for Care Tech Holdings Plc.in order to determine where to invest that will improve the costing.
Following are the costing principals which are helpful for Care Tech Holdings Plc. Defined as
below.
Principal 1
Good costing is required to be based upon quality of data that helps to support the confidence in
the results for Care Tech Holdings Plc.
Principal 2
Good costing is required to include all cost incurred in Care Tech Holdings Plc. That will help
management to produce reliable & comparable results (Jamil, et, al., 2014).
Principal 3
As per this principal there should be a relationship between activities & all resources consumed.
Care Tech Holdings Plc. Is required to test how much cost was incurred & who incurred the cost.
Business control system-
Business control system includes policies & procedures that will help Care Tech Holdings Plc. to
achieve their objectives in effective manner. Care Tech Holdings Plc. Required to makes policy
in such a manner that employees perform their duties effectively. Business control system is
bright procedures that help to safeguard Care Tech Holdings Plc. from uninformed or
inappropriate decisions or actions.
Care Tech Holdings Plc. is required to follow business control system & makes effective policies
& strategies for improving its health & social care services (Beuren, et, al., 2014).
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1.2
Care Tech Holdings Plc. is required to focus evaluation of the system which is usable in social &
health care industry in order to properly manage financial resources. This is to be ensured by the
management of Care Tech Holdings Plc. that financial status of the company does not affect.
There are several types of financial & non-financial information is available within the
organization which is required by management of financial resources of the company. In order to
makes proper utilization of financial resources this information is very crucial. Proper cost
allocation, cost reduction & control are required to be maintained in order to utilize resources
properly & able to produce higher returns for organization.
Risk management information-
This information helps Care Tech Holdings Plc. to manage their financial resources in an
effective manner. Management has to understand about how it can manage financial & business
risk in an effective manner. This is very important in health care business organization. Any
diversion in this will affect the goodwill of the company.
Transparent accounting information
It is an essential need for every business organization to have an effective & transparent
accounting information system. This will help to increase the satisfaction of the user. Top level
management of Care Tech Holdings Plc. is required to use this information in order to manage
the financial resources. This information will provide the strength to the management of Care
Tech Holdings Plc. to take appropriate decision regarding to effectively manage financial
resources. Accurate information helps to show the true & fair view regarding the profitability &
efficiency conditions of the company (Mark, 2018).
1.3
The regulatory body of UK forces all health care service industry to provide effective, efficient
& good quality services in effective manner. All the organizations which are operated in this
sector is required to ensure that there is regular improvement in health care services served by
organizations. Following are the regulatory requirements which need to be satisfied while
managing financial resources in Care Tech Holdings Plc.
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NHS commission board
This is the most important regulatory body which helps health & social care service sector to
prepare budgets & to develop financial plans in the whole organization. This will provide
security that financial; resources are utilized by the organizations for the specified purposes.
GAAP
As per this regulator body organization are required to comply with the principals & policies
which are used for presentation of fiscal statements & there related records. Care Tech Holdings
Plc. is required mandatorily to follow the regulatory requirements in relation to financial
resources. This will help to ensure that financial resources are utilized in a proper way i.e. with
compliance with laws & regulations. Financial management system in any business
organizations involves different types of tools & techniques for utilizing the scare resources.
After complying with all rules & regulations management system should ensures that company
will receive feedbacks instantly.
Regulatory monitor
This body is framed to monitors the activities & functions of health & social care services. This
plays important role to monitors regulatory functions. Care Tech Holdings Plc. is required to
satisfy the regulatory requirements while managing the financial resources. This is very
important to establish high level transparency & systematic stability in the management of Care
Tech Holdings Plc. (Pandit, 2016).
1.4
In any organization there is a need to follow system at regular intervals for managing the
financial resources. For the purpose of achieving the organizational objectives there is a need to
follow particular systems in a proper manner. There are various methods are available for
maintaining proper management of the financial resources in health & social care industry. There
are so many popular & known systems which can be used by Care Tech Holdings Plc. in their
operational activities for the purpose of effectively managing the financial resources Which are
defined as below –
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Open system
This is the most common software which is used by most of the organizations in health care &
service sector. The specialty of this system is it’s easy to operate. It is very flexible to use. As per
the needs of the environment it can be changed or updated accordingly. Open system is used to
collect all the financial information at one place. This can be done by importing the all financial
& tax related information in to the system. After accumulation of all the estimated data it
immediately starts sorting of income & expenses of the organization. This is the system which is
useful in taking appropriate decision related to customer services & their satisfaction. Care Tech
Holdings Plc. has to adopt open system in their business organization to manage the financial
resources.
Care sys software
By following this system organization is able to make all financial & non-financial activities
which are done in health & social care industry. Care Tech Holdings Plc. is requires following
this system to support time & attendance of staff, equipment maintenance etc. hence it is useful
to manage the financial resources (Quimba, et. al., 2018).
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LO2
2.1
Funds plays important role in any business organization. Funds are the basic need for the
establishment of new health & care home. Company’s needs capital in their business
organization to develop & grow. In simple terms it is to be said that funding is the fuel on which
a business runs. Therefore, the need to scrutinize the various sources of fund is described as
below.
The first thing which is required to be done by Care Tech Holdings Plc. is that it will consider
the need of requirement of fund for the purpose of completing the task or project. When an
organization is aware about the need of fund flow requirement then this will easy for
organization to complete the project with available resources on time. Hence Care Tech
Holdings Plc.is required to first estimate the need of total fund requirement.
There are several local or federal agencies of state available which provides available funds for
social or health care services. This is considering the most common method of collecting the
fund. These agencies work for providing funds to the residential homes for old age people.
Through internal sources Care Tech Holdings Plc. also contribute or collect funds. Internal
sources include retained profits of the company, working capital, personal saving etc.
Health care & human service department of UK is the sole organization for funding the
residential care home. An application for the funding amount is required to be filled by the
organization in written format to the department of UK. After this various types of grants of the
services can be availed by user applicant. There are some external sources as well which can be
used by Care Tech Holdings Plc. to diverse source of income.
2.2
Financial resources are a term which incorporates funding requirements. It is covers all financial
funds of the organization. As per the prospective given in economic terms financial resources are
the part of the organization assets. Financial resources may be of two types i.e. long term
financial resources & short term financial resources. In case Care Tech Holding Plc. required
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financial resources for the period of more than 12 months then it will be considered as long term
financial resources. If Care Tech Holding Plc. required financial resources within a year then it
will be considered as short term financial resources. Financial resources are the inputs of the
production process. Before entering into any business organization an organization needs to
secure appropriate financial resources.
There are various factors that may influence the availability of financial resources in Care Tech
Holding Plc. which are defined as below.
The size of the organization plays a crucial role in determining the availability of financial
resources in Care Tech Holding Plc. if the size of the organization in terms of transaction volume
or with geographical areas is big then there will be need of higher financial resources. Size of the
organization i.e. Care Tech Holding Plc. is very big & it is spread over in more than 100
countries in the world. It is also associated with several agencies throughout the country. All
these factors are helpful to determine the need of availability of financial resources.
Care Tech Holding Plc. is providing various kinds of services like private health care services,
nursing services etc. Many kind of services required higher financial resources this is also an
important factor which influence availability of financial resources (Raghupathi, 2013).
2.3
Following are the various kinds of budget which can be applied for expenditure by Care Tech
Holding Plc. which are as follows: -
Cost centre- Cost centre simply means that department of the organization which is available for
improving the overall efficiency of the products or services within the organization. Therefore,
it is to be said that they are not directly i.e. indirectly related to the revenues of the organizations
but helps the organization in improving the revenues. In cost centre services are served at cost
price.
Example - Research & development department.
In the other hand there is profit centre. Profit centre contributed directly to the revenues of the
organization. In case of profit centre products & services are delivered at cost + profit.
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Example: -Manufacturing department.
Project management budget- project management budget refers to following set of activities
which are designed for a group of persons for the purpose of achieving the specified goals.
Project management budget includes three types of components which are defined as follows: -
 Management reserve
 Outsourcing
 The base cost estimate
Outsourcing- when the work or any contract done through outside agency then it is to be termed
as outsourcing. In this budgeting system it means to hand over of the control of the organization
to any other earnings entity. The services of professional expert can be outsourced by Care Tech
Holding Plc. for social care services. In the process of outsourcing proper communication is
required with external parties of the organization (Jowah, 2017).
2.4
For the purpose of evaluating the decisions about expenditure could be made the first thing
which is required to understand what the expenditures incurred in this sector are. The various
types of expenditure of Care Tech Holding Plc. is cost of food & medicines, care takers, cost of
bed etc. Care Tech Holding Plc. is required to properly examine their expenditures in such a way
that organization is able to takes appropriate decision making in respect of utilizing the available
funds. Care Tech Holding Plc. is required to make strong policies & procedures to control their
expenses. Care Tech Holding Plc. is needs to determine the timeline of the budget planning & its
implications for the various expenditures incurred throughout the year within the organization.
Care Tech Holding Plc. is also required to prioritizing the goals & objectives of the company
which is required to be achieve mandatorily. Goals & objective have more priority should be
achieved first. In order to achieve their objectives Care Tech Holding Plc. should first review the
financial status of the company. Care Tech Holding Plc. should prepare expenditure budgets for
analysis purposes with actuals.
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Care Tech Holding Plc. is also required to review their fund flow statements. Effective allocation
of the fund is required to be maintained as per priority basis. Importance should be allocated on
the basis upon expenses. Important things must be funded first. Expenses in relation with
medicines & medical consultants should be giving more priorities in comparison to others. Care
Tech Holding Plc. is required to utilize their resources properly (Rahim, et. al., 2014).
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