CareTech PLC: An Analysis of Financial Resource Management in HSC

This report examines the principles and practices of financial resource management within the context of Health and Social Care (HSC), using CareTech PLC as a case study. The report begins by outlining key costing principles applicable to CareTech, along with the information necessary for effective fi...Read More

Managing Financial
Resources in HSC

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Principles of Costing which can be applied in the Caretech plc..........................................1
1.2 Information needed to manage financial resources...............................................................2
1.3 Regulating requirement of managing financial resource......................................................3
1.4 System for managing financial resource...............................................................................3
TASK 2............................................................................................................................................4
2.1 Diverse sources of income available to Care tech ...............................................................4
2.2 Factors that influences the availability of Financial resources.............................................5
2.3 Types of expenditure budget in Health and Social care industry..........................................6
2.4 Expenditure decision in health and social care ....................................................................7
TASK 3 ...........................................................................................................................................7
3.1 Financial shortfall in CareTech PLC and explanation about how this situation could be
managed......................................................................................................................................7
3.2 Action that can be taken on investigation financial fraud in organisation............................8
3.3Evaluation of budget monitoring arrangements in CareTech Plc..........................................8
TASK 4 ...........................................................................................................................................9
4.1 Information required for making financial decisions ...........................................................9
4.2 Relationship between care service delivered and cost and expenditure ..............................9
4.3 Evaluate how finance consideration impact upon a service user........................................10
4.4 suggest ways to improve the care service provide by Care Tech PLC through changes to
its financial system and processes............................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
There are several ways through which an entity can maintain its financial resources.
Caretech Plc being an entity dealing in sector of health and social care. There are several sources
of finance but all these are limited up to a certain amount because of this reason it is necessary to
manage them in a way so that would not lead to a situation where managing authorities can
manage their activities with efficiency and accuracy(Aktaruzzaman and Clement, 2011). The
companies which are dealing in health and social care sectors requires to provide services to
those who are in need of treatment. In this report there are several principles of costing have been
mentioned. Further this report also consists some of sources through which entity can generate
funds. These sources are classified in external and internal category as per their roots from which
they can be acquired. Caretch Plc was founded in year 1993 and it was established at United
Kingdom.
TASK 1
1.1 Principles of Costing which can be applied in the Caretech plc
 Consistency : Consistency principle of cost accounting said that once the enterprise
adopt a method of doing the work that that method should be used by the enterprise for
getting good results . Like the enterprise when making budget take some assumptions for
making the budget than it is advisable to the enterprise to use same assumptions all the
time when making budget otherwise every time the results will be different . So it is
simply advisable to the enterprise use the same technique for making the budget a can
can be acceptable or can be done when there is a new version is available or when
making changes become necessary .
 Data accuracy : The data accuracy principle of cost accounting said that all the data
which is used in the budget should be accurate. Inaccurate data will give inaccurate
results so for getting accurate results the data must be accurate .
 Materiality : The materiality principle of cost account said that all the data used in
account should be relevant(Al-Dhaafri, 2014). If the account department use relevant data
than results that will come will show the more true picture of that what is really going on
in the enterprise.
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 Causality and Objectivity : Causality and Objectivity means that all the activities what
is being done by the enterprise should have some object that why the particular activity is
being done by the enterprise.
 Transparency :Transparency simply means that all the activities of the the enterprise
should be transparent . There should not be any hidden activity done by the enterprise.
1.2 Information needed to manage financial resources
The information needed the health care care tech based on the financial management.
The information of in available in financial social health care(Amararachchi, Perera and
Pulasinghe, 2013). The health and care enterprise the company balance sheet company profit and
loss account ,company business ratio and company trading account. The profit and loss account
defined the company profit and lose.
Trading account
Trading account defined the gross profit and gross lose . Gross profit is company profit
and gross lose is company is lose. Trading account includes the many transaction like opening
inventory, sales ,purchase, and closing stock.
Profit and lose account
profit and lose account of PLC is make the the health care profit and lose .The health care
company take short and long term profit and lose. The profit and lose account includes the many
transaction like expenditure and income statement. Profit account show the company profit and
includes the company capital. Profit and lose account make he company liabilities and assets.
Balance sheet
Balance sheet is a important resource of the financial statement. Balance sheet is last
statement of the firm. Balance sheet includes the company's liabilities and assets. Firm liabilities
defined the firm the creditors and assets defined the debtors. Balance make the proper data of
the firm. Creditors debtors and debts (Buchanan, 2012). Balance sheet make the issue capital of
the company. Balance sheet is company liabilities and company asset. It is a last statement of the
firm.
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1.3 Regulating requirement of managing financial resource
There are some regulating in care tech in plc limited. Some regulatory applied in follows
ways care quality commission , IFRS, GAAPS company revenue.
Care quality commission
Care quality commission is a non department and it is a public body of the health care
department. The health care is a health commission , mental health. Care quality commission
started in hospital sector. Care quality commission provide the safety and high quality care of the
people.
IFRS
IFRS stand for the international financial reporting standards foundation. IFRS is non
profit accountant organisation. This organisation purpose is developing the accounting system
and standers. This industry applied the budget of the health care(Charles, 2010). IFRS is a
accounting and a monitoring board of organisation.
GAAPS
GAAPS strand for the generally accepted accounting principles. GAAPS is the important
set of accounting system. GAAPS is a authority of the find standers. GAAPS authority set by
the public boards. GAAPS defined the communication of financial information. GAAPS may be
includes the many standers like balance sheet , profit and loss account . GAAPS measure the
financial statement and other public sector
Company house and HM revenue and customer
HM stand for the her majesty revenue and customers . The HN applied the UK
government. The department responsibility to applied the many rules and regulation. The
administration collecting the tax and data. It improve the customer experiences of organisation.
This house is a power house. It analysis the government police and crown services. The
department is organised by the led of the general.
1.4 System for managing financial resource
Financial management resources manage the money transaction. It managing the resource of the
organisation. They effect the cost and creating the cost management(Ding and Li, 2010). The
sources of managing financial system is increasing the company productivity. This system is
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calculating the company budget. There are some system including the information technology
system, accounting system, training system, and payment system.
The health care firm increasing the productivity in sector for PLC. Information
technology system provide the better information good process easy to transaction
of the communication. This system also help the electronica system. Information system is a
good opportunity of the financial sources. It make the time importance. An audit system
collecting the data of the health care company(Gajewski and et. al., 2011). It providing the
internal sources of the finance. The manager management the financial system. In the health
care sector income is very important factor of the financial resource.
Budgeting also help the managing financial resources. It manage the capital budgeting,
and spending the manager. It motivating the people and staff. They maintain the discipline of the
staff manager. money management is very important any organisation because the money in
internal term of the firm. The internal financial activity helping the product report.
Financial resource manage the company leader sheep, discipline and maintain their
responsibility. This resource improved the product quality and create the employee
improvement. Financial resources maintain the quality of the product. Financial resources
develop the good health care service to the public.
TASK 2
2.1 Diverse sources of income available to Care tech
(A)External Sources
1. Government Funding: Government funding is one of major source of income for health
and social care industry. Government provide a great amount of funds to these kind kind
industries for making their services more up to the mark and for the betterment for the
people.
2. Commercial revenues:Commercial revenues are the revenues generated by providing
insurance plans to the patients of the hospital (Goldman, 2010). The Commercial
activities helps in generating large amount of revenues for the firm.
3. Loan funding :Loan funding is one of the another part of external resources .Under this
the firm take loan from the banks . Large amount of health and social care industries take
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loan from the the banks . The amount taken as a loan can be used by the health care
industry in improving their services for their clients or patients.
(B) Internal Sources :
Under the internal sources of the income of a health and service care industry various
activities come under this like the income generating from selling of medicines and of the
equipments used in health care industry come under the internal sources of income of a health
care industry. Besides this if there are are spare rooms in the hospital which are not used by the
hospital from a very long time than the hospital can gave that room on rent and that generated
income from the rent will come under the internal sources of the health and social care
industry(HOSSAIN, 2013). Caretech Plc can generate their income through these available
internal sources so that they can manage their operational and organisational activities in a way
which can let them approach towards their targets and objectives.
2.2 Factors that influences the availability of Financial resources
(A) Funding priorities : This is one of the main and important factor which influence the
financial resources of a health and social care industry . Every health care industry has its own
funding priorities like some health industry would like to invest good amount of fund in services
provided to their patients while some will invest in good medicines and equipments.
(B) Government policy : Government policy is of the another important factor which affect the
financial resources of health care industry. The government of every country make the policies
for health and care industry and according to that policy the health and care industry has to
invest their resources.
(C) Geographical location :Where the health and social care industry is located ,affects the
financial resources available to them. If the health and social care enterprise is located in the
main location of a country or a city then there are more chances that they will get more
opportunities of getting fund from various resources on the other hand if an enterprise is located
outside the main location of the city then there are very little chances that the enterprise will get
more amount of resources to get financial help(John and Ramesh, 2012).
(D) Type of business ownership :Type of business ownership is the factor which affect the
availability of financial resources to that business(Managing financial resources to deliver better
public services. 2017). Like if a business is run on a large basis then it will needed a large
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amount of money for that business on the other hand if a business is run on a small basis than it
will required a large amount of money for doing the business.
(E) Type of service rendered : The services provided by the enterprise is the factor which affect
the financial resources available to them (Kabra, Ramesh and Arshinder, 2015). If an health care
enterprise provide a large amount of services than it will needed a large amount of finance on the
other hand if an enterprise provide health services on a small basis than it will need a small
amount of cash for doing their operations.
(F)Local authority policies : The policies adopted by local authorities of the enterprise affect
the financial resources they required besides this the national service framework of a country
also affect the financial resources of a health care industry.
2.3 Types of expenditure budget in Health and Social care industry
 Budget : A budget is a written statement of estimate expenditures and income for a given
period of time . A budget is used by an enterprise to control all the expenditures and to
calculate all the income and to know all the sources of income.
Advantages of Budget
A budget is helpful in forecasting all the expenses . A budget is prepared by an enterprise
for doing planning of all the expenses or to known what amount of cash will be required to meet
all the expenses occur in the near future. Budgets provide a guide to all the activities of the
enterprise. Budgets helps in achieving coordination and communication among all the activities
of the enterprise.
Types of budget which can be used by the Caretech plc
 Sales budget :Sales budget is one the most important budget from all the budgets . It is
the budget which shows the expected sales for the given year or for the specific period of
time . Sales budget shows the selling price of the product or the commodity.
 Budget for overhead : Budget for overhead is the budget which is made for all the
overhead of the enterprise. Overhead budget shows what are the overhead which can be
occur in the near future and helps in controlling the overhead by doing proper planning.
 Master budget :Master budget is the conclusion of all the budgets made by the
enterprise on all of its functional areas(Kuruppuarachchi and Perera, 2010). Master
budget is the budget which shows all the income and expenditures of the enterprise.
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2.4 Expenditure decision in health and social care
In a health and social care industry like caretech expenditures decision can be of many
types like how much to invest on different kinds of equipments available . The expenditure can
be decide by selecting the priorities of the enterprise. Priorities of different health and social care
enterprise can be different so according to the priority the enterprise can decide its expenditure.
Expenditure decision can be decide on focusing the strategies of the enterprise(Matopoulos,
Kovácsand Hayes, 2014). Every health and social care industry adopt different kind of strategy
so the expenditure can be according to this . The another factor which affect the expenditure
decision of an health and social care enterprise is environmental analysis by analysing the
environment or by analysing the strategies or actions of their competitors an enterprise can to
decide its expenditure decision. Other than this thete is an another factor which can decide the
expenditure of the firm that is emotionalism. Emotionalism simply means the expenditure on a
particular thing or on an activity which is not creating or giving any outcomes to the firm. So in
this case it is advisable to the firm to eliminating that emotionalism . Eliminating emotionalism
will help the firm in saving of their expenditure and that amount can be invested in an another
activity which can produce outputs for the firm or can generate income for the firm. Other than
this an health and social care enterprise should provide balance to all its expenditures
TASK 3
3.1 Financial shortfall in CareTech PLC and explanation about how this situation could be
managed
There may be the situation of financial shortfalls in which an entity may face the situation
of lack of available funds for carrying out the activities which are required to be carried out in
order to meet the current and future organisational needs. Caretech Plc may face such situations
in which the management can face the situations which is related with the lack of financial
resources. Operations and its requirements can only be fulfilled in case where the funds which is
required by such such operations is available with organisation(Financing Residential Care.
2017). Shortfall of available funds can be classified as a situation where the amount of liabilities
and obligation increases the amount of cash available with the organisation.
In this case organisation will not be able to payout its debts which will reduce its
goodwill in market. As well as there may be chances where managers and those who are in
charge of performing any business operations can't perform their business operations in case
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where there are very less financial sources available with them(Nayak, 2016). In case enterprise
will fail to pay the obligatory amount then this would lead to charge of interest and other
consequences. Company would not be able to pay the wages and salaries to the staff who is
working there which will result in loss of trust of employees in the business entity. Better
response can only be get through implementation of better operational and organisational
structure so that they can manage the availability of finance.
3.2 Action that can be taken on investigation financial fraud in organisation
Frauds related with the financial field are very crucial as this may lead to reduce the
productivity and profitability of any entity. A better system to investigate the fraulent activities
should be implemented in Caretech Plc so that these can be identigfied very effectively and
efficiently. Better response related with detection of fraudulent activities can be very effective
for the increase in reputation of any enterprise because those who are responsible for committing
fraudulent activities in the cited entity can lead to complete destruction of the organisational
structure of it(Perera and Perera, 2013). Cited enterprise can take several steps in order to meet
the target to detect fraudulent factors in company.
They can make an strategy towards detecting the person or elements who are
accountable towards the fraud and other related activities. Then because of this thing it may be
possible that company can lead to generate better revenue through detection of fraud and erro5rs
in the structure of entity. They can investigate this though analysing the financial statements
where they can found the exact amount of financial fraud and after this they should make a panel
of investigators committee through which they can find the person who is accountable for such
fraud and error in the organisational structure(Adequate financial resources. 2017). A better
management can be only possible through investigating the errors which are there and they are
resulting in low productivity of any entity. But a better managing system can only be
implemented in case where there are less fraud and errors.
3.3Evaluation of budget monitoring arrangements in CareTech Plc
Monitoring is necessary for the management of resources which are there in health and
social care so that industry can get better results through utilizing these resources in the
management of resources. An entity which running business of health and social care have
certain important responsibilities towards the patients(Raymond and Brown, 2011). They are
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require to deliver some better and required services so that the life of their patients can be
secured. Financial sources are limited hence they require to attain the goals of providing efficient
services through managing and monitoring available sources. Budgetary control process can be
implemented in order to monitor the debts and equity of any entity. Budget are used to forecast
and monitor the expenditure which are related with the managing and organising operations or
any future projects. Through forecasting Caretech Plc can establish a better control system over
the financial sources of it. Through which management can forecast the exact amount of
expenditure which is required by any entity so that to manage the revenue which can be earned
through implementing such plans and strategies over the firms operational structure(Roy and
Bapon Chandra Kuri, 2016). Monitoring includes budgetary control, variance analysis and other
techniques cost and management accounting. Forecasting can ensure controlled expenditure over
certain projects.
TASK 4
4.1 Information required for making financial decisions
An enterprise like caretech has to take lot of financial decisions like what to pay investors
how much to invest in the coming years so for all that financial decisions an enterprise need a lot
of information like the current status of sales and ledger ,budget ,cash flow , income statement .
After analysing all the information the enterprise take the decision based on that collected
information. For taking a decision in caretech the following can be used for taking decision like
the current statement of cash low , budget . A decision is something which is taken at a enterprise
on daily basis so it is necessary that the decision should be effective because effective decision
will help the enterprise in achieving its objectives at a faster speed(Xu and Gursoy,201). In an
enterprise a decision can be made at various levels like operational level and at tactical
level(Subasinghe, Kodithuwakku and Perera, 2014). A financial decision of an enterprise include
investment decision,expenditure decision and other so for taking the decision the enterprise
should need to collect all the status of financial accounts because after collecting the right
information the management can take the right decision.
4.2 Relationship between care service delivered and cost and expenditure
Relationship between care services delivered and cost and expenditure simply implies
that there is a direct relationship between the cost and expenditure incurred and the care service
delivered by the caretech to its patients. Like if the enterprise expands a lot then it will be able to
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provide quality services to its customers on the other hand if the enterprise will try to reduce its
cost of its operations than it will definitely reduce the quality of its operations also. It is the
foremost duty of an enterprise in case of reducing the cost of its operations it should not
compromise with the quality of its services because the health of customers is one and the
foremost objective of an health and social care industry. But the enterprise can try to reduce the
cost of its operations but at the same time maintaining the quality of services. For improving the
quality of its services the enterprise can consult with the family members of the clients and if a
problem comes on a surface then the enterprise can try to remove or to erase that problem.
4.3 Evaluate how finance consideration impact upon a service user
The finance consideration upon a service user this is based on the financial and
operational. The impact on the financial consideration from the people , business and
environment etc. the staff regularly professional development and motivating the people. The
main impact on the human resource management(Taylor and Wagland, 2013). Because human
resource management is a selection of the people recruitment of the people.
Care tech with the above process will be reduce the staff turnover. The service applied
more than one people and one to one. It reduce staff turnover , development the staff and help in
highly satisfied the people. Service user make the selection and recruitment of the people. They
help in providing the satisfaction ,provide security for the people. They help in selection of the
process. The selection process is direct an indirect process of the health and care in PLC. The
service provide excellent care of the people. This service focus on the investment process.
Because the investment process make the selection ,training , and recruitment of the people.
This service provide the quickly decision related to the people.
4.4 suggest ways to improve the care service provide by Care Tech PLC through changes to its
financial system and processes
There are many to improve the care service. They provide the change in PLC. In Care
Tech firm recognising the financial system and process. The process help the organisation is
make the transformation to the system. They improve the quality and manage the time.
Financial system flow the many process like stakeholder, shareholder, bank management, inflow
and out flow the cash. This system provide the budget in the PLC. This system provide the
government police. This police make the transfer of the risk and responsibility(Walker and
Bamford, 2011). It motivated and create the improve the service(Williams, Hickey and Nader,
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2011). Care tech make the regulation and the process of the government. There are many ideas
and innovative of the things. The promote the staff right and their choice. This system saving the
money value. They brought the new and innovative ideas. They consider the product quality and
their quantity. They comparison the relationship between the finance management and finance
statements. They improve the quality and effectiveness of the service and social care of PLC.
They provide the payment of the result. It motivated the people to the safety.
CONCLUSION
It is necessary for Caretech Plc to organise a better costing system through which they
can manage their financial sources in a way which can fulfil all the requirements of enterprise.
The above mentioned report contains the accounting principles which are required to follow by
the enterprise for setting up a better accounting and financial background. Further this report also
consist of the sources through which any entity can generate revenue like sale of drugs and sale
of equipments which can be used by any entity for the operations and other activities which are
there in health and social care sectors. Better cost structure can lead to gain better revenue
through the operational activities of any entity and this also reduce the productivity of any entity
which can lead to loss of revenue as well as loss of market reputation.
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REFERENCES
Books and journals
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Online
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