How Financial Resource can be managed? Explain.
The following assignment evaluates the financial resources of Care Tech solutions. The brand has been the leading provider of information technology (IT) products as well as web-based solutions for the health care institutes. The study emphasizes on managing the diverse sources of sales revenue of the organization. Besides this, it states the measures to prevent fraud in the organization and improve the financial processes of the organization.
Principles of costing and business model.
Cost is always correlated with it source It is observed that the evidence of relationship is in a straight line related to its source. The anthology and examination of the data obtained from cost are generally in agreement with the nature of allotment, which is based on the cause and effect associations.
Charging of abnormal costing: The cost, which is incurred to cater the loss either by fire or due to theft as the damage, has nothing to do with the cost of manufacture. This will lead to discrepancies in cost data thus which is deceptive to the administration team regarding the abnormal cost controls.
Cost is charged subsequent to it is incurred: The contemplation of the cost, which is incurred, is considered as the cost hub. For example, incidences happen when the usual loss is beard by the unit where such loss has been occurred. The burden of such costs cannot be on the unit that are until now to pass thorough manufacturing process.
Past cost is not considered while considering the future cost: The recommended financial procedures are that the cost incurred by the care tech during a particular period is tackled during the same particular period. It the cost is related to the particular accounting period then postponing the cost in the future would be monetarily wrong. If historical cost has potential future contemplation then gathering up the cost will be difficult, as the weight of past cost will be subjective greatly on the management.
Information required to deal with financial resources
The information necessary in the administration of monetary resources originates from the organisation for meetings its needs. It is important to denote that organisational requirements differ from functioning actions, requirement from labour, managerial activities and financial activities. Such organisational activity determines the distribution of monetary resources for their accomplishments (Brealey et al 2012). Such kinds of data is obtained through the help of operational figures arising from the inventories maintained by the organisation for its financial statements, operational activities and other cost related activities revolving in the organisation. Hence, organisation gets such information and preserves them for the need of human capital and debts.
Whichever kind of business concern should be relevant to the fundamental authoritarian requirement to guarantee the achievement of the organisation. Such requirement facilitates the organisation to operate inside the standards of the stator necessities of that particular nation. One of the good examples is in U.S where the health and social act 2012 is implemented which standardizes the monetary operations of health organisation. The act put down the values of formulation, which governs the information concerning the enforceability and configuration of contracts (Liebich et al 2012). In addition to this, there are directive principles of all the compulsory agreements, which are prepared in health organisation. A number of the agreements consists of protection letters, bailment, pledges and agency. It also offers the provisions related to the breach of contract.
On the other hand, the other vital regulations pertain to the subject of the quality administration. The other vital regulations concerning the quality of management is the federal bureau, which is the administration body, shouldering the accountability of enforcement quality standard within the organisation that provides services to the wide-range of population.
Systems relating to recording of transactions
The assessment of organization for administering the monetary possessions in health and care organisation is by measuring whether they assemble the prospect and satisfy the needs of the customers along with the needs of the organisation as well. A health care organisation with the help of the organization guidelines and regulations has handled all the possible risks for its wellbeing centres in relation to the resource allotment measures where all the requirements and demands of the concerned parties are met. The concerned parties could be the staff and the patients in the evaluation process. With the help of cost reduction methods and financial expediency, the corporation has the effectively followed the guidelines of the management thereby, achieving the goals in offering social care to a large section of the population.
Diverse sources of income that in health and social care organization
Health and social care organization generate income from diverse sources. Dividends have been an essential source of income in the health and social care industry. Swayne et al.(2012) mentioned that the investors have been a substantial portion in the health and social care industry. In addition, the investors have been providing financial support to the in a hospital. Abdelhak et al. (2014) mentioned that the patients have been an essential part of the revenues earned by the business entity in an existing financial year. In this regard, it can be said that it is a constant source of revenue for the hospital. In addition, grants voluntary made have assisted the organization to pay off the short term as well as the long term loans of the business entity.
Besides this, it has different branches set up at various places to gather additional revenue for the business entity. This would assist the business entity to gain additional income to offer effective customer service policies to the business enterprise
The factors affecting generation of financial resources
The economic condition
- The economic condition of a place shall greatly determine the financial resources of a place. As such, it is necessary that the financial condition of a place shall have a substantial impact on the financial resources of a place.
Patients financial resources – Enthoven (2014) mentioned that the nature of patients condition have an essential impact on the financial resources of an entity. In this regard it can be said that social attitude is also a determinate factor on the financial state of a business entity. Thus, it is necessary that necessary promotional policies are made to influence consumer attitude and behavior.
The goodwill and reputation - Then goodwill and reputation of business enterprise shall have an impact on the financial condition of a place. As such, it is essential that policies are made to create a strong brand identity.
The nature of services
- The nature of services offered to the consumers determines the consumer perception. According to Kongstvedt (2012), this shall have an essential impact on the nature of the services offered to the management of the business entity.Relationship with the shareholders of the company
- Bryant and Nix (2015) mentioned that the relationship with the stakeholders of the company is an essential determinate on the financial stake of the company. As such, it is necessary that stakeholders create an adequate impression on investors, stakeholders and the consumers to have a positive impact on the financial condition of the business enterprise. cc
Different Types Of Budget Expenditure
The following are the different types of budget expenditure prepared by a healthcare organization
a. Medical expenses - The medical treatment offered to the patients shall be of considerable expenses. In this regard, Bryant and Nix (2015) noted that the medical expenses would be of considerable budget. Thus, this is one of the essential expenses for which a budget has to be prepared,
Operational Expenses - A budget prepared would assist the operational expenses of an enterprise. Thus necessary arrangements shall have to be made to determine the expenses of the organization and allocate the budget accordingly.
The following are the factors that shall be considered in determining the expenses in a particular financial year
Sales revenue – The sales revenue of a business entity shall have an impact on the financial condition of a healthcare and social care organization. As such, Armson et al. (2015) mentioned that the entity shall have the ability to bear substantial expenses for smooth business operations if it has achieved the sales revenue that is set by the business entity at the outset.
Financial viability- The financial viability of a business enterprise shall have an influence on the decision-making procedure of a business enterprise. Thus, it is essential that the health or social care organization ensure the commercial viability of the entity in the market.
The profitability position - The profitability position of a business enterprise would determine the decision-making expenses of an entity. Thus, it is essential that the profitability position is positive to allocate the expenses as per the needs of the organization,.
Future forecast - The future forecast about the financial position of a business enterprise shall be determined through the future financial position of a business enterprise. According to Haas et al. (2013), the future forecast of the financial position shall determine largely the decision of the allocation of expenditure of a health and social care organization.
Financial short falls may occur in business due to over expenditure or on the occurrence of any financial activity leading to crisis. Hence, there are several ways of managing financial shortfalls;
Putting an overdraft to work: Overdraft can be considered as the one of the significant tool, which offers a business a greater flexibility to manage cash flow or any shortage of funds. It can be regarded as a small momentary loan. The interest charges applied are normally tax deductible as a business concern can reduce some of its irrelevant expenses in order to cut down unnecessary cost of operations (Salah and Souissi 2016).
Invoice finance: An alternative is can be used where any business concern can access up to 85% of the growth in the worth of outstanding statement on an in progress basis. This is regarded as one of the effective way of managing the financial shortfalls for any business concerns and there by, gaining access to a growing pool of funds so that a business concern can use the available funds to purchase additional stock and pay out its creditors
Collecting debts and negotiable debts: It is important that a short settlement of debts from debtors are more preferable than offering a long term negotiable debts facilities. It is best to ask the debtors to clear the debt in early instalments, which usually saves time consumption and allows rotation of cash into the business on regular basis (Ho and Peng 2016).
Cutting down the expenses: If a business is experiencing shortfalls it is required to cut down its expenses. It is reasonable to save the amount of money by dropping un wanted expenses and keeping a track of every cent of money spend.
Developing cash flow and budgetary systems: Financial deficient can be managed through implementation of effective cash flow of the organisation and designing effective budgetary systems. Through the help of management integrity, an organisation can keep a watch on the spending pattern of the various departments of the organisation and undertake effective measures against the reckless expenditure of personnel (Babajana and Phillips 2015). An organisation acquisition policy would address the issues related to the cash flow activities which can be reduced. Optimisation of the cash flow activities would help the organisation in achieving the financial health.
Recommended action in the context of a suspected fraud
According to Bryant and Nix (2015), the Health Insurance Portability and Accountability Act deals with cases which involves with financial irregularities of a region. This implements the necessary guidelines that would enable the organization to deal effectively with fraudulent issues in the market place. According to Pearce and Doh (2012), health care fraud is a serious issue that can hamper the operational policies of a business enterprise. As such, it is essential that the organization strictly adhere to the health Insurance and Accountability Act to prevent any financial fraud from affecting the sustainability of the organization. Thus, the organization cans implement an internal audit department to investigate financial irregularities affecting the organization. Ball et al. (2014) mentioned that a separate fraud investigation department can be adopted in the organization to aid the organization in the prevention of fraud.
The budget-monitoring department can be adopted in the business organization to adjust the budget according to the needs of the organization. Chaudoir et al. (2013) mentioned that the budget monitoring arrangement can be used in the organization to prepare the actual budget in the organization to meet the actual expenses needs. The budget is prepared by the finance department of the organization in consultation with the management of the organization. Frequently, the management of the organization would analyze the budget and suitable actions shall be taken to facilitate the organization towards growth. Thus
Recognition of information.
The annual year- ended statements of an entity would useful tool for making finance related decisions. Thus, the Profit and Loss statement as well as the Balance sheet would provide the required data that would assist the management of the entity to make effective financial decisions. In this regard, the inflow of sales revenue would be of help to the business entity in making essential financial decisions. In addition, the existing market condition would be of importance to the management to make essential financial condition of the entity
Health social services delivered and cost or expenditure
The quality of customer services shall have an influence on the costs and expenditure of a health and social care organization. As such, it can be said that the service quality of an entity would lead to reduced costs and expenses of a business entity. According to Hacker and Walker (2013), greater service quality would lead to greater sales revenue and the market position of an entity. Thus, this would reduce the operational expenses of the business enterprise and bring a better position to the organization.
Evaluation of financial considerations
Financial considerations that can impact an individual through the health and the social care service are afforadibility, income of the individual and the nature of the decease the individual is afflicted with. In addition, such attributes include the proper availability of the medical equipments that can help to offer superior treatment to the patients. According to Coombs (2014), expensive medical treatments may create a feeling of discontent among the patients. Therefore, it is necessary that the entity charge reasonable prices to the patients, thereby, negligible impact on the financial condition of a business entity.
The financial condition of a business enterprise would have a pertinent impact on individuals using the health and social care services of an organization. As such, the cost of medical treatment offered to the patients would have an essential impact on the existing financial state of the business entity. As such, the discounted rates offered to a different section of consumers are essential for the general well –being and the growth of the society. Thus, profitability shall not be the only concern for organizations involved in health and social care. According to Lorenzi et al (2013), gathering consumer feedback remains essential for the growth as well as the reputation of a business entity. Following the views of consumer the organization can make necessary changes to suit the needs of the business enterprise.
Necessary alterations in financial systems
Following are the changes that can be made to the financial systems as well as the processes to enhance the health and social care system
Any health and social care system should adhere to the general accounting principles as well as the necessary financial legislations to deal with the financial systems as well as the processes.
Accuracy - There should be adequate emphasis on the authenticity and the accuracy of the data entered in the financial statements of a business entity. This would assist the organization to adequately asses the financial statements of the business enterprise and make policies accordingly. As such, it is necessary that the staff is given proper training to ensure the accuracy of the year –ended financial statements of a health and social care organization. Besides this, the procedure of data collection as well as the storage should be imposed to assist the business enterprise to ensure adequate protection of organizational data. Apart from these measures it is essential that the organization implements advance technology mechanisms in its operational process to ensure the treatment of patients with minimum amount of time effort.
Identification of disease - The primary stage in the treatment of patients is the identification of disease. This is necessary to ensure that the right treatment of patients and prevent recurring of any disease. According to Hans et al. (2012), this also reduces the unnecessary wastage of financial and non- financial resources of the business enterprise.
Conducting regular audit schemes- It is pertinent that regular audit schemes are implemented to find any discrepancy in recording the financial transactions of a health care and social organization. Lorenzi et al (2013) mentioned that this would assist the organization in reducing the amount of fraud in the business and develop the year ended financial statements of an organization. The audit schemes shall compare the vouchers of the organization with the expenses and make relevant report to reflect the existing financial condition of the organization.
It can be stated that Care Tech solutions have implemented effective policies to assess the financial condition of an enterprise. The diverse sources of income have been adequately assessed and are reflected in the year –ended financial statements. As such, many factors shall affect the financial condition of a health and social care business organization. These are - Patients economic condition as well as the goodwill and reputation of the entity are the primary constituents, which determine the inherent financial strength of an organization operating in the health as well as the social care segment.
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