Financial Resource Management Report: Task 1-4, Semester 1

This report delves into financial resource management within a healthcare context, addressing key areas such as costing principles, business control systems, and the information needed for effective resource management. It provides a detailed computation of an annual budgeted expense, incorporating elements like marketing, financial, and administration costs. The report also examines regulatory requirements, emphasizing adherence to the Health and Social Act 2012 and accounting standards. Furthermore, it evaluates systems for managing financial resources, considering alternative approaches like software and number skills, and highlights the significance of budget planning and information technology. The analysis extends to dividend policies, sources of income, expenditure types, and the factors influencing finance availability and barriers to funding, including internal and external environmental factors. It also addresses financial shortfalls, fraud prevention, and the role of budget monitoring in strategic planning. The report emphasizes the importance of considering governmental policy changes, adopting excellence and equity models, and empowering employees for enhanced organizational effectiveness.

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FINANCIAL RESOURCES MANAGEMENT

Health care
Assignment title: Task 1 – How systems are used to manage financial resources in Hsc
Scenario 1.
i. Principles of costing and business control systems
Cost is always linked to the cause and it si clear from the association that cost is directly
linked to the case. The collection, as well as evaluation of the figure is done in tune to the
relationship. Further, abnormal cost is chargeable in costing. The cost that happens due to
abnormal activities such as fire, theft, etc is termed as abnormal cost. The normal cost that is
linked to production or services is charged to the cost centers.
The principle of business control system lies in the fact that the recruitment process enables
the selection of the staff that is competent and employs that person only. This ensures that the
business is performed in an efficient manner.
ii. Information needed to manage financial resources
Financial resources can be managed by having all the relevant details of the inflow and
outflow of cash. This will shed light on the progress and the way in which the funds are
treated. Further, an exposure to the overall operations of the company is needed to manage
the financial resources because then only it can be ascertained the quantum of financial
sources needed. The budget is an important element that helps in knowing where the funds
are flowing. It is only through budget that the different department can be tamed in a proper
manner. For, example if the figures are available then the financial resources can be
managed in an effective manner.
1.3 Computation of Annual Budgeted annual Expense for the
year 2018
Particulars
Amount
($) Amount ($)
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Health care
Expected Fees 3,00,000
Marketing Expenses
- Fixed Advertising Expenses 7,000
- Variable Advertising Expenses 13,000 20,000
Financial Expenses
- Interest Paid 15,000
- Bank Charges 3,000 18,000
Administration Expenses
- Accounting Staff Cost 90,000
- Stationary 3,500
- Depreciation of Office Equipment 7,500
- Depreciation of Motor Vehicle 12,000
- Rent 20,000
- Travelling Expenses 18,000
- Work Cover 1500
- Superannuation 7,500
- Telecommunication 10,000 1,70,000
TOTAL EXPENSES 5,08,000
iii. Regulatory requirements
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Health care
In the given case the company is required to adhere with Health and Social Act 2012. All the
financial regulations of any health company are guided by this act. A company is required to
abide by the accounting standards in order t mage its financial statements. Also it is necessary
for the heath companies to abide by the quality standards so that no compromises with the
general population are made. Following the regulatory requirements helps the companies
prevent fine and penalties and also they help in cost savings and improved opportunities
(Field & Brown, 2007).
iv. Evaluate systems for managing financial resources
In order to evaluate the systems for managing financial resources in a health care organisation
it is important that the system meets with the expectations of both the company and the
people requiring its services. The systems are regulated in such a manner that the resources
are allocated among all the health centres so that they can be used wherever needed. It is
important to take into consideration management policies also. Proper allocation leads to cost
reduction, which helps to provide better care to large group of people.
M1. The alternative system that the health care can follow is that of the proper software and
recording that will help in management of financial resources. Once the entry is properly
done and recording happens in a correct manner, the resources will be automatically in the
desired manner. Hence, the use of technology and proper recording is the alternate system
M2. The number skills are an important consideration because the proper evaluation can be
done with the help of numbers. The number skills help in prediction together with the
analysis. Ratio computation can be done with the help of numbers that can shed light on the
performance of the health care.
D1. Budget planning and information technology can be best described as the system for the
evaluation of the financial resources. Budget planning is undoubtedly, the best system that
will help in the proper evaluation by dealing with the numbers of the organization. The best
system for assessment of financial resources is as follows. First is the investment
management system that can allow an organization to maintain its portfolio, thereby
facilitating in reflecting the number of risks surrounding the organization. Besides, the
company can also introduce a central treasury department that can allow it to manage all its
investments. The second method is funding management system that can be implemented in
an organization so that it can gain access to several short-term and long-term sources of
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Health care
finance in order to maintain its requirements of liquidity position and investments. Therefore,
a company can undertake such system within its framework to ensure interest cover and
gearing ratios are maintained within required limits (Ferris et. al, 2010). The most suited
system will be funding management system because it altogether covers the requirements of
an investment management system and key ratios like gearing and interest cover can also be
maintained, thereby enhancing organizational efficiency.
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Health care
Task - 2
AC 2.1:
Dividends are one of the major sources of income that may be encountered in health and
social care. The company has been planning toward increasing the dividend per share along
with the earnings. The company resulted in growth of over 3.5% in the year 2013, because of
which its dividend increased from 4.29% to 4.68%. This increased the dividend to 7 per share
for the company (Deegan, 2011). Subject to the approval of shareholders, the final dividend
for 2014 would be 6.5 per share. Also other major sources include bank loans and share in
profits.
AC 2.2:
The company has used a major of its resources in executing merger which involved purchase
of twenty eight properties. These assets were previously leased by the company, but now the
company has acquired them which have blocked major of the financial resources of the
company. Also credit rating plays an important role in flow of finances (Laux, 2014). In case
the credit rating of the company falls, the credit limits decline which lead to shortfall of
resources. Therefore, it is important that the management examines the credit rating
efficiently in order to avoid lack of financial resources.
AC 2.3:
The major types of budget expenditure in health and social care organisations are
Comprehensive, problem solving and planning budgeting. The comprehensive budgeting take
into consideration all the aspects of the organisation, it helps is planning the resources and
cutting the expenditure in cases of lack of financial resources. The problem solving budgeting
helps to identity the parts of the organisation facing problems, and further helps to sole them
the planning budgeting helps the company in there expansions strategies. Also helps the
organisation to use the capital as per the company goals.
AC 2.4:
In order to evaluate the decisions about expenditure in the health and social care organisation,
the company should opt for cost benefit analysis. This type of analysis helps the company
understand the benefits it is getting form the expended money. If the worth or result of
expenditure is not at par with the requirements the company can cut off such expenses. This
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Health care
type of analysis helps the management distribute the resources efficiently, as they know
which expense will provide them with the highest benefits (Davies & Crawford, 2012).
D2. The factors that influence the availability of finance and the barriers to funding in health
and social care organisations
The factors that influence the availability of funds and barriers to funding in are associated
with both internal and external environment. The combined influence of such factors can
create barriers for an organization in funding. For example, a business entity can be
surrounded by factors like charitable activities, payment of taxes, etc. The most major factor
that can influence the funding of a business entity is its strategies and objectives. In other
words, if the higher management is planning on making a strategic alliance for the
development and growth of the enterprise, it can face funding issues for the future flow of
operations (Choi & Meek, 2011). In addition to this factor, the fiscal budget of the
government can also influence finance availability. Under this policy, guides for the
allocation of revenue of the entire State are taken into account by the government for
incurring expenses for its development and enhancement (Leo, 2011).
Availability of finance
Size of working capital – if the working capital is huge and the operations are effective then
the health care organization will have sufficient funds. Realisation is another added
advantage that helps in enhancing the funds availability.
Assets owned – if the organization has surplus of assets then the organization will be able to
get more business and hence, the financial condition will be strong in this scenario
Barriers:
Bottlenecks – if the organization fail to get the smooth supply of resources like medicines,
machines, etc then it will spoil the smooth functioning.
Skilled workforce – if the skilled workforce is absent then it might become difficult for the
organization to operate and render seamless service.
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Health care
Task 3
AC 3.1:
In order to manage the financial shortfalls, it is important that the company studies its cash
flow properly. The organisation should read into expenses of each of the department and
evaluate where unnecessary expenses are being made. The organisation should reduce the
allocation of resources to such departments (Needles & Powers, 2013). The budgets made
should be strictly followed. The management should provide incentives on savings and
penalties on extra requirement of resources. Since the company has used most of its resources
in the merger. It has a lack of funds. The management should properly plan the cash flows in
order to meet with the financial shortfalls (Carmichael & Graham, 2012).
AC 3.2:
The frauds in a health care organisation are mostly settled by the accountability act or the
health insurance portability. Fraud is akin to a confederate theft which may lead the
individual for an imprisonment of about ten years according to the penal code. In the event of
occurrence of fraud the one should first report the information to the required official and
thereafter deal with the criminal in the court of law (Peirson et. al, 2015). A fraud in the
health care community is very serious matter as it involves both individual and government.
AC 3.3:
Budget monitoring is very affective in the addressing of a strategic and effective planning. IT
also helps to predict the cash flows of the organisation. The main focus of the assessment
procedures inclusive of the monitoring systems and budget monitoring are also being met on
regular basis. It helps to fill the gaps in the budgeting system thus allowing it to make a well
coordinated internal budget (Parrino et. al, 2012). It also tracks the performance of the
organisation in the different areas by the capital expenditure and some other developments
processes which are in progress.
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Health care
Task – 4
Introduction
Companies must give due focus towards the changes in governmental policies when it is
preparing for future budgets and plans. It can allow it to develop more clear and concise
forecasts for the future. It is also recommended that a company must adopt the excellence and
equity model that can allow it enhance its organizational effectiveness. Furthermore,
empowerment of employees to be creative and innovative inside the organization can
facilitate the growth of the industry (Brigham & Daves, 2012)
Information required to make financial decisions for Jatikpos Care Home
It has been observed that the financial controllers of Jatikpos Care Home use the financial
statements inclosing the income statement, cash flow statement and also some other
information relating to inventories in order to understand the scenario before taking any type
important decision. If the financial controllers do not have enough knowledge then it will
result into losses which may have an adverse impact on the organisation. Apart from the
financial departments, there is a Human Resource department whose job is to keep a record
of the employees and details relating to them such as address and to in which department do
they belong. Management of financial resources can be done through various systems that
can allow an organization to implement the same for the purpose of enhancing operational
effectiveness (Petersen & Plenborg, 2012). In a healthcare organization, financial resource
management can be done by Care sys system that facilitates in considering all non-financial
and financial affairs in the organization. Moreover, it comprises of modules associated with
behavior support, care planning, time and attendance, human resourcing of staffs, equipment
maintenance, etc. In addition, an open system can also be utilized in such scenario that
facilitates the collection of financial information at one place by importing all tax and
financial related details into the system (Bodie et. al, 2014). Moreover, after collection of
such information, the system starts assessing the expenses and income of the organization.
Nevertheless, this system plays a key role in making relevant decisions associated with
selling and buying, enhancement of customer services, etc.
Evaluation of the relationship
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Health care
The health care and the social service are associated to each other in relation to the cost as
well as the expenditure incurred. It provides the information about the cost incurred by the
health care services which is further used in analysing it. There is a positive correlation
between the employees and the service that they provide. The number of employees that were
employed and the patient turn outs over the year has increased significantly which resulted in
the increase in expenditure. The organisation growth is clearly depicted in the financial
statements of the organisation which shows substantial increase in revenue, increase in the
number of patients as well as mergers and acquisition.
Financial considerations
The services offered by the organisation are influenced by both organisation and financial
considerations. The financial considerations include the income of individual, their living
standard, the type of disease and the other cost that will be included while delivering service
to the patient. However, we can say that financial consideration can be summarised in one
word called affordability. The organisational factor is the availability of the equipment that
will be required in the various diagnostic procedures in the treatment of the patients.
Recommendations
There are many ways to improve like maintaining the general accounting principles and
handling the financial systems and processes adequately. The system should be accurate so
that there may be no misinterpretation of data and also it will be better if the organisation will
employ a good controlling system. No matter what, it should be seen that the changes are not
affecting the present patients and they are not facing any problems. The organisation should
also improve the data storage facilities and thus it should employ the use of new data
collection software which makes the work easy.
Conclusion
It must also be noted that a business entity must find ways of decreasing its finance costs.
Besides, the establishment of close relationships with the government can also assist a
company in ensuring that their voice is surely heard when it has decided to implement
physical policies. Overall, a rigorous and coherent financial management system can assist a
company attains its goals in an effective way.
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Health care
References
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Choi, R.D. and Meek, G.K. (2011) International accounting. Pearson .
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Deegan, C. M. (2011) In Financial accounting theory. North Ryde, N.S.W: McGraw-Hill
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