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Managing financial sources in health and social care

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Table of Contents introduction ..................................................................................................................................... 1 task 1 Systems that can be used for management of financial resources in health and social care 1 1.1................................................................................................................................................ 1 1.2................................................................................................................................................ 2 1.3................................................................................................................................................ 3 1.4................................................................................................................................................ 3 Task 2 Role of planning in procedure of budgeting for health and social care organizations ........ 4 2.1................................................................................................................................................ 4 2.2................................................................................................................................................ 4 2.3................................................................................................................................................ 5 2.4................................................................................................................................................ 6

Task 3 Significance of monitoring of budget expenditure.............................................................. 7 3.1................................................................................................................................................ 7 3.2................................................................................................................................................ 8 3.3................................................................................................................................................ 8 Task 4 Procedures and systems for managing influences of sources of finance ............................ 9 4.1................................................................................................................................................ 9 4.2.............................................................................................................................................. 10 4.3.............................................................................................................................................. 11 4.4.............................................................................................................................................. 11

Conclusion .................................................................................................................................... 12 references ...................................................................................................................................... 13

INTRODUCTION Management of financial sources is essential to balance financial health of business. It is considered in primary activity of business which is done for effective operations. It is done by effective combination cost and managerial accounting.Report will be comprises of principles and techniques of costing and financial sources which are required for organizations. Along with this there will be discussion of methods of budgeting and monitoring. Last but not the least recommendation will be made for CareTech that how they make improvement in their operations for having strong financial positions.

TASK 1 SYSTEMS THAT CAN BE USED FOR MANAGEMENT OF FINANCIAL RESOURCES IN HEALTH AND SOCIAL CARE 1.1 Principles of costing which can be incorporated by CareTech holding Plc is as followStakeholder engagement- For the effective costing by business it is required that efforts should be given be entire stakeholders which are comprises of non- financial staff. Effort by financial team is not only sufficient (Lam, 2010). By integration of financial and non-financial team better results can be attained. Consistency- Techniques and methodology used in accounting of cost should be continuous periodically. This make statistical and financial results more viable and comparable for the decision makers. Data accuracy- Data inserted for the computation of cost are mandatory to be accurate. It is essential because exactness of derived information is based on quality of data inserted as input. Materiality- Costing should be done by providing focus on materialistic cost and activities. Transparency- Information and transactions of Cost accounting are required to be reliable and transparent (Hacklin, and Wallnรถfer, 2012). Decision makers can easily rely on information derived from such for making their decisions.

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Kindly Mail us at: help@instantessaywriting.com 1.2 Information required by CareTech holding Plc in 2013 for management of financial resources CareTech holding Plc is an organization dealing in sector of health and social care. Therefore for effective operations they are required to manage their available financial resources. Information which will be required for such management can be categorized into two parts that are as followInformation related to cost and income of business Such information is financial in nature which is comprises of managerial and financial accounting information (Winand and et. al. 2012). Managerial information includes budgetary data, forecasting statement of inflow and outflow of cash, data of costing and pricing and statement showing variances in standard and actual performance of business. Accounting information includes annual report of business which are comprises of main financial statement of business. Information related to environment and external influences of business-

These kind of information is considered non financial in nature. It is comprises of policies of business related to internal and external environment. In this analysis of trend is done to determine efficiency of business. Modifications in existing policies and competitive factors of organizations are measured by management for decision making. Legal requirements which are mandatory for business to apply are also included in such information. 1.3 CareTech Holding Plc is a public organization which is accountable to stakeholders including government and public for reporting. They get partial funds by government hence they are under obligation to optimum utilization of sources (Weygandt, and et. al., 2009). They are under partnership with Care commission for the objective of innovation of new services. Due to it their responsibility has been increased, that their related parties should get proper return on their investments. Principles introduced by authorized organizations such as ICAEW and GAAP should be followed by CareTech Holding Plc. By incorporation of such principles in their accounting they can be able to make information more reliable and comparable with other organizations. It is mandatory for them to get their operations checked by Quality commission to achieve objective of transparency. 1.4 Management of CareTech Holding Plc is carrying out their operations on its divisional structure. They have been focused on successful reconfigurations for the objective of growth and development of business. Reason behind their strong financial position is, that there major arrangements of financial resources is through the banking arrangements. Comparatively they are able to maintain lower leverage by strategy of backing of freehold asset (Hofmann, 2007). They are maintaining balance between care and commercial sense and had ensured their stakeholders for continuation of it. Proper methods are followed by them for cost and managerial accounting. Annual report for the financial year 2013 is updated and comprises of all materialistic information which are essential for stakeholders for the objective of decision making.

TASK 2 ROLE OF PLANNING IN PROCEDURE OF BUDGETING FOR HEALTH AND SOCIAL CARE ORGANIZATIONS 2.1 Generation of revenue is important for all business organizations. Impact of revenue is directly linked to the profit of business. For making enhancement in capacity of earning company can select additional options that are as followedStakeholders and voluntary organizations- To earn extra revenue by business, CareTech Holding Plc can raise funds from various stakeholders. They can use grants and funds from leasing which can be utilized in beneficial projects. Improvement in existing services- CareTech Holding Plc is focused on their innovative services by which they can earn additional revenue (Luong, and Weinthal, 2010). They are having four care pathways that are Adult learning disabilities, mental health, Young people residential services and Foster care. Hence by effective operations in existing path organization can increase their earnings. Additional services- By providing ancillary services which are related to primary, CareTech Holding Plc can earn extra revenue. This will be opportunity for business to expand their operations. 2.2 Several factors which are linked to internal and external environment of business are capable to influence sources of finance. Organization operating in sector of health and social care are required to raise and allocate their financial funds according to policies of government. As per fiscal regulations financial policies of business is determined. Controversial issues in current government affects the managerial decisions related to finance (Hacklin, and Wallnรถfer, 2012). It is also known as political sensitivity. Negotiation powers of CareTech Holding Plc with the regulatory authority affect the availability of sources of finance. It is based on convincing power and effectiveness of strategy which will be approved by government.

2.3 For managing business with efficacy financial planning is important of business. Numerous expenditures are incurred by business for completion of operational activities. If resources are used in such expenses without appropriate planning there will be risk of ineffectiveness in benefits of it. For the financial planning of expenditure in business most suitable tool is budgeting. It can be categorized into two parts which are as follow-

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Short term budget This are prepared for daily operations of business. In this estimation is made for revenue and expenditure on the basis of trend analysis. Usually for such expenses flexible budgets are prepares so there can easy implication of modification in budget (Gustafsson, 2006). It is prepared to ascertain needs of working capital which will be required for daily operations of business. By merging the entire operational activities master budget is prepared which represents overall position of business. Long term budget

In such budgets forecasting is done for long term projects which required huge amount of investment. These are particularly prepared for specific project so all elements can be assessed by business. It is estimated by proper strategic planning and considering entire risks in the project. These are done for expenditure which is of capital nature. Fixed budget are prepared for it, in which modification can be done in only extreme situations. 2.4 Management of CareTech Holding Plc is required to take daily decision related to operations of business. Following are the elements which are required to be assessed while decision making in sector of health and social careAvailability of funds- According to available financial resources with business planning is done by them for investment projects (Weygandt, and et. al., 2009). There are several options with business from which funds can be availed but selection of it is based on financial position of CareTech Holding Plc. Organization has sufficient profit and having strong bank arrangements hence they should preferred debt financing for business. Place of business- Location of business is major factor which affects demand and expenses of business (Hacklin, and Wallnรถfer, 2012). CareTech Holding Plc is dealing in industry of providing housing services hence there head office should be allocated in such place by which they can easily manage their operations. On the basis of location of business projects are taken and expenditure on it is allocated. Regulations of central and local government- CareTech Holding Plc are public sector organization therefore are required to incorporate and follow policies determined by government. It also includes legal regulations which are mandatory to comply (Weil, 2012). By incorporation the following described points in evaluation decision is taken by CareTech Holding Plc. By proper assessment of such point will provide them strategy for better operations by which they will be able to attain financial goals and objectives. By following regulators of government CareTech Holding Plc will be able to prevent legal contradiction and unwanted restrictions are hurdles in operations.

TASK 3 SIGNIFICANCE OF MONITORING OF BUDGET EXPENDITURE 3.1 In certain situations business has to face threat which there is lack of sources of finance which is required by business. These are situation which are unlikely to arise. CareTech Holding Plc is dealing in services which are partially controlled by government and their partner care commissions. Hence there is continuous risk for business as modification or their adverse decisions which will directly operations of business (Lam, 2010). Complete remedy is not possible to avoid such kind of threats but following are the strategies that can be adopted by CareTech Holding Plc to manage financial shortfall-

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Kindly Mail us at: help@instantessaywriting.com Creation of reserves- Part of profits and earnings are required to be retained by business as reserves. This part of profits can be used by organization in situation of emergency where funds are not easily available.

Prioritization of expenditure- When business has to face situation where there are limited funds for operations then amount incurred on the basis of priority of expenses. Most essential cost should be incurred first or kept aside as per time element. In such circumstances business should plan their expenses in such a manner which move towards need to desire. Additional earnings- CareTech Holding Plc can provide ancillary services from which quick revenue can be generate that can be used in operations of business. In this option management is required to be careful that there main focus be on primary activities so quality could be maintained in it (Keller, 2013). Charitable programs can be arranged by them in which voluntary donations are invited that can be used by them. Proper planning- Most suitable option that can be opted by CareTech Holding Plc is adequate planning for expenditure. Planning should be done with the mark up strategy. So additional margin can be used in situation of threats, 3.2 For effective management of financial resources it is required to prevent fraud in business. Financial fraud includes embezzlement of cash and making improper utilization of availability sources of finance. If there are event of fraud in CareTech Holding Plc, management should immediately look forward to it. Initially evidence should be collected to support the event of fraud. It is not logically ethical to blame someone without adequate evidence. Committee should be setup for detection of fraud (Shahwan, 2008). Police should be involved if there is serious situation. Detection committee should be comprises of member who are eligible for their work and give decision without any biasness. An example should be created for further employees to prevent such kinds of events in future. For more conclusive solution CareTech Holding Plc should prefer financial forensic accounting. It is established for providing litigation for anticipated disputes in business organizations. 3.3 Budget is estimation of financial operational activities of future. It works as a map for implementation of strategy in operations of business. Implementation is not last stage of budgeting it is also important to monitor (Peterson, and Series, 2004). Objective behind

monitoring of procedure of budgeting is to attain actual output according to standard output. CareTech Holding Plc can use the following technique to imply monitoring in their organizationInternal audit Internal audit refers to the checking by internal management of business. It is an ongoing process which is in continuation with operations of organizations. It is done to maintain quality and standard in work of sub ordinates (Hacklin, and Wallnรถfer, 2012). This is done to check whether policies are properly implemented or not. Aim of internal audit to discover loop holes in planning and make modification to prevent it. External audit Procedure of checking by experts which are owned by business is known as external audit. It is mandatory for entire public organizations. In this auditor is appointed by regulatory authority determined by government (Osborne, and Gaebler, 2003). Aim of external audit is to check transparency and to determine whether transactions are fair or not. This makes information more reliable for stakeholders for decision making. Benchmarking By using strategy of benchmarking target can be set by organizations for completion of operations. This will be divide whole work in steps. It will make procedure of monitoring easy and efficiency. CareTech Holding Plc can use either of these options or can use combination of these techniques. It will help business is proper evaluation and attaining better outcome from operations.

TASK 4 PROCEDURES AND SYSTEMS FOR MANAGING INFLUENCES OF SOURCES OF FINANCE 4.1 Financial decisions are important for business as it determines leverage and obligation of it. For making decisions related to sources of finance both financial and non financial information is required. In the context of CareTech Holding Plc financial information is comprises of their annual reports of previous years. It will help in analysis of financial position

and future forecasting for business (Winand, and et. al. 2012). Non financial information of business includes trend and policies which are implemented to achieve financial objectives. Demand and expectations of stakeholders is also considered while decision making of financial sources. Incorporation of standards described by Care Quality Commission (CQC) is required in evaluation. It is mandatory for CareTech Holding Plc to comply legal requirements and do not contradict legal frame work by their decisions. Modification in policies of current government and political dictate is also well thought-out by business so they can also update their policies.

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Kindly Mail us at: help@instantessaywriting.com 4.2 CareTech Holding Plc is dealing in sector of health and social care organizations so it is important for them to behave ethically by following all legal and ethical requirements. They should be fair and transparent while dealing with their stakeholders. Financial and costing statements should be prepared by them by considering all policies and principles determined by GAAP and IFRS (Moeti, and et.al., 2007). They are involved in agreement of partnership hence all clauses of their deed is needed to be complied by them. CareTech Holding Plc is partially funded by government hence they should make adequate use of resources so they can attain

better output. Such organizations are under obligation to publish their annual accounts periodically which should be audited by external experts. 4.3 CareTech Holding Plc is engaged in providing services in sector of housing. Impact of their financial considerations is directly linked to their service users. As there will be increase in financial burden it will increase the price charged from service users (Mclean, 2003). They are engaged in operations of providing innovative services if there will be any loop hole in strategy it had to be beer by service users. Alteration in policies of CareTech Holding Plc will influence the demand of customers. There is cause and effect relationship between service users and financial considerations of CareTech Holding Plc. There increase revenue shows increasing demand of their consumers which shows efficiency of business. Capacity of organization in delivering services is making increase in their market share. 4.4 For making modifications for making improvement in financial position of business CareTech Holding Plc can adopt updated technology in accounting. Organizations are good in their operations so they can go for personalized software which has all tools of accounting. By it time for accounting will be reduced and better information can be derived. Facts from such software will be error free as computations in it not done manually (Glasby, 2012). So there are fewer chances of errors. For cost effectiveness in strategy elimination can be done for expenses which are providing fewer benefits as per their cost. It will simultaneously make reduction in cost and increment in profits of business. By using techniques of internal and external audit CareTech Holding Plc can easily monitor their operations. By this better outcome can be attained by them. Continuous monitoring in project will increase the quality and standard which will enhance reputation of business. For pricing and financial decisions strategies should be properly implemented by them so they can easily achieve objectives of business (Frredman, and Media, 2014). Performance models can be used by CareTech Holding Plc for more qualitative performance and satisfaction of their

stakeholders. By incorporating following techniques grooming will be done for overall operations of CareTech Holding Plc.

CONCLUSION Present research report was based on management of financial resources in CareTech Holding Plc. Conclusion can be made from present project report is principles of costing are important to apply for reliability of information. For effective cost accounting engagement of both financial and non financial parties is important. For effective operation is requiring monitoring budgeted expenditures to prevent variances (Baker, and Riddick, 2013). To manage financial shortfalls adequate planning and prioritization of expenses is important. Proper actions are required to take in event of suspicion of fraud and committee should be established to resolve dispute. Improvement in financial position can be attained by CareTech Holding Plc by incorporating updated techniques.

REFERENCES Baker, H. K. and Riddick, L. A., 2013. International Finance, Oxford University Press.

Frredman, J., and Media, D., 2014. why management accounting is important in decision making. [Online] Available through: <http://smallbusiness.chron.com/managementaccounting-important-decisionmaking-53947.html> [Accessed on 7th July 2014]. Glasby, J., 2012. Understanding Health and Social Care. The Policy Press. Gustafsson, V., 2006. Entrepreneurial decision-making. Edward Elgar Publishing. Hacklin, F. and Wallnöfer, M., 2012. The business model in the practice of strategic decision making: insights from a case study. Management Decision. 50(2). pp.166 - 188 Hofmann, P. K., 2007. Psychology of decision making. Nova publishers. Hussey, R. and Ong, A., 2005. A substantive model of the annual financial reporting exercise in a non-market corporate. Qualitative Research in Accounting & Management. 2(2). pp.152–170. Keller, A., 2013. Finance and financial management. GRIN Verlag. Lam, W. 2010. Funding gap, what funding gap? Financial bootstrapping: Supply, demand and creation of entrepreneurial finance. International Journal of Entrepreneurial Behaviour & Research. 16(4). pp.268-295. Luong, J. P., and Weinthal, E., 2010. Ownership structure. Cambridge university. Mclean, A. R., 2003. Financial Management in Health Care Organizations. Cengage Learning. Moeti, K. and et.al., 2007. Public finance Fundamentals. Juta and Company Osborne, D. & Gaebler, T., 2003. Reinventing government-How the entrepreneurial spirit is transforming the public sector. Reading, Mas: Addison-Wesley P. C. Inc. Peterson, P. P., and Series, F. J., 2004. Capital budgeting. John wiley& sons. Shahwan, Y., 2008. Qualitative characteristics of financial reporting: a historical perspective. Journal of Applied Accounting Research. 9(3). pp.192 – 202. Weil, L. R., 2012. Financial Accounting. 14th edition. Cengage Learning.

Weygandt, J. J. and et. al., 2009. Managerial Accounting: Tools for Business Decision Making. Managerial Accounting: Tools for Business Decision Making. Winand, M. and et. al. 2012. A financial management tool for sport federations. Sport, Business and Management: An International Journal. 2(3). pp.225-240.

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