Finance is the most crucial requirement which are needed by the management for efficient running of the firms’ operations in an effective manner. this is the report which is relied upon the Silloth nursing and residential case home. This report would elaborate how the systems are implemented along with cited care home for managing financial resources, managing budget and expenses. By implementing this kind of tools, organisation could avoid expenses in an effective manner henceforth, the business could offer services at a lower rate to the clients. There are so many tools which could be implemented by the Silloth Nursing and Residential Care Home for managing its financial resources.
1.1 Principles of costing and business process system:
Cost is the tool control which occurred by the organisation are identified, quantified and tubulised in a higher efficient manner, and these compared along with the budgeted figure. These kind of comparison provides management data which they are needed to analyse the effects of their operations and to help them for developing their business decisions. This care home is needed to assess about how much they are required to incurred on the products and services, but first of all, firm is needed to calculate the costs of other things which would earn higher profits or losing money by measuring cost which are further divided into direct and indirect costs. As far as the case study is concerned, direct and indirect costs are elaborated by Silloth Nursing and Residential Care Home (Wheeler, Reeder-Hayes and Carey, 2013). This simply means that the direct costs are those that could derived entirely to the product. Henceforth, organisation is required that there are various kinds of costs which are categorised into direct and indirect costs. In this report, direct and indirect costs are elaborated by the Silloth nursing and residential care home manager. This can be rightly said that the direct costs are those that can be derived entirely to the product, which can be rightly said that this costs are highly elaborated along with goods and services. Direct costs are staff costs, handling of patients, domestic, establishment cost, staff costs etc. while on the other hand, indirect costs are those which are not directly apportioned to the particular goods.
Business control framework of cited home is additionally needed to determine the compliance issues such as following to various laws, rules and regulations that are determined along with health care. In the business, there are so many principles which would be adhered and few of them are as follows:
- Charging of abnormal cost in costing: In the firm, there are so many uncommon incidents which occur like fire, riots and various kinds of loss which has to be borne as to this would be adopted as the abnormal cost. There would be no connection of it along with other events.
- Connection existing among cost and its cause: This is rightly said that entire costs are to be incurred which are concerned to its cause. Cost is determined on the basis of allocation of the resources.
- Previous costs do not to be ignored: Consideration would not be rendered to any cost that has been formed in past period as by that excessive load would be formed on the organisation.
- Determining entire costs of the organisation: This kind of principles of costing concentrates on the specific good or activity of a project. As per this princliple Silloth nursing and residential product or activity of a project. As per this principle cited organisation must need to form a budget on the basis of forecasting of entire kinds of costs. For example, cost for a cited cost must be forecasted and a project budget will be predicted and project budget will be formed. After this, entire activities costs must be handled with during occurrence.
1.2 Information which are needed to manage financial information:
To handle financial resources in the hospital, there is a requirement to undertake financial accounting information by manager. Henceforth, this could be rightly said that financial statements are required to be formed on yearly basis (Marten and et. al., 2014). Cash flow statements demonstrates movement of cash inflows and outflows in this cited firm. this assist the cited organisation to assess the movement of the cash inflows and outflows in this cited organisation. This assists the organisation to assess about funding needs and efficient utilisation of these resources in an effective manner. Balance sheets of the cited organisation renders a most transparent picture of assets, liabilities and shareholders’ investment. While firm’s income statement is likewise needs to be assessed as the profits and loss statement that could demonstrates operation’s records of earnings and profitability for a particular period of time. Silloth nursing and residential care home net income for the ended 31st march 2008 which was negative figure during 2007.
Performance calculation of strategic objectives are important information that are needed to be in context with handling of financial resources. These kind of performance measures covers market shares, cash flow, effectiveness and market position. Objectives of the cited company achieved by consumer satisfaction, operation’s dynamic and productivity. Consumer demand is needed to be fulfilled (Cresswell and Sheikh, 2013). For handling financial resources in an organisation, manager of the cited organisation is needed to done about employee level and guarantee about services about employees are rendering to assess about the employee level, and guarantee about the services what employees are rendering to the organisation’s client, and assess about expenses concerned to the capital, assess about amount of the wages which needs to pay to the organisation, and also allocate of resources that will brief to cited firm.
1.3 Regulatory needs for handling financial resources:
Regulation is the handling system which implemented place by the government through which acts, rules, regulations and policies for investigation organisation and people. Henceforth, these assist organisations for reducing financial fraud, moralising, ethical practices and equality, consumer security, responsibility, assist integrity and effective structure. An organisation is needed to form its organisation with the organisation own name for fulfilling along with regulatory norms and policies and likewise to assure an effective management and adequacy of court. However, proprietary firm does not have formed according to the law. But there is a need to inform HM and customs. Whole of the limited organisation are controlled by law to publish annual financial statements. There is a need to make financial statement to provides information which are directly connected to the finance related problems.
1.4 System for managing financial resources in the cited organisation:
Financial system is the process that could lead to have financial activities of an organisation. There is a diverse factor that could formed the financial systems of diverse levels. For handling financial resources, there are various systems: which are budgeting, IT systems, financial accounting system, payment system, auditing systems. However, few of them are as follows:
IT system will access adequate information, producers, shares, storage and entry access by various kinds of departments. For instance, a digital payment systems and more on (Luo, LaPierre, Hughes and Waite, 2012).
Budgeting helps organisation to stop over spending, motivating staff in order to gain budgeting goals and pre-set objectives.
2.1 Diverse sources of income available to cited organisation:
Here are so many sources of income that are available to the organisation as per the health and social care sector as income that most issues for achieving delivery of an effective health care services to the public which for form emergence and expansion of organisation venture. Henceforth, self-pay, non-patients, tax assistance from government, third party payer insurance and diverse kinds of earnings.
The crucial source of earnings for cited organisation care are: funding from regulatory bodies, diverse grants, rent grabbed from leased property, earnings form revaluation of the organisation assets (Crawshaw, 2012). General, there are various sources of earnings that emerge from chartable care home. So that gathering from fund raising events.
2.2 Analyse the factors which affects the availability of financial resources:
Accessibility of the financial resources of health care conveniences like Silloth Nursing and Residential Care Home Care Home is highly influence by various financial risks and payment by services providers and business organisations. Revenue can likewise be covered from diverse sources like governing agencies, various social insurance resources like- tax, from individual organisations and premiums (Murdoch and Detsky, 2013). The various health care organisations operating their working their developing countries face constraints form of gaining an appropriate finance running their working in the emerging countries face issues for raising an appropriate fund due to low income level and scarce institutional and management related capacity. Additionally, accessibility of the organisation is relied on out of the pocket payment in these countries. Second crucial factor is connecting to risk pooling. By taking assistance of risk pooling cited care home develop and control raised capital for sharing of financial risks among diverse contributories.
2.3 Review different kinds of budget expenditure in Silloth nursing and residential care home:
A budget is the planning tool that is quantified in monetary terms, which are incorporate and sanctioned prior to a fixed period of time, highly demonstrating planned income to be produced and expenses to be happen during the period and capital to engaged during the time of particular period and capital to employed for gaining pre-set objectives.
Here, various kinds of budget expenses are connected to this sector. This contains personal budgets, operating budgets, sales budgets and others (Buchbinder and Shanks, 2016). Operational budget reflects products and services of the cited organisation that can be beginning as per the service sector during the budget period. The personal budget contains identification of the expenses which are occurred by operational as per the financial year. Expenses contains labour costs and others which are connected to personal. As per this sector, human resources which has achieved a significant impact on the personal budget which could consequence on the personal budget and this is completed as per the emerging competition and enhanced validity on the resource driven tools.
2.4 How decisions about expenditures are made:
This process of decision making on the expenditures in care home are based on the in-depth analysis and recognising the requirement of business houses. However, for handling of the financial resources as this is the key aspect through which whole organisation’s main decisions are formed (Mladovsky and et. al., 2012). Estimating of the diverse financial risks, appropriate abilities of the project management and assumptions and calculations of costs related advantages and other factors are implemented for forming decisions effectively. here are some of the tools mentioned under this:
- NPV: Under this, present value of cash inflow and present value of cash outflows are considered under this. Hereunder, diverse inflows and outflows is measured which is implemented in order to elaborate whether profits would be incorporated or not.
- Profitability analysis: As per this, this is determined that whether adequate balance is incorporated in expenses or not.
3.1 How financial shortfalls can be managed:
Financial shortfall is a situation in which company cannot cover its obligations or liabilities due to lack of availability of funds. A Financial shortfall can be temporary or long term in nature which arises because company is not able to manage its financial resources efficiently. So it is important for a company to properly manage its financial resources through investing in businesses which will pay out dividends for future needs of funds that will help overcoming financial crisis. They also need to approach their creditors to make early payments and convince their suppliers to provide longer payment periods (Drummond and et. al., 2015). In order to manage such financial shortfalls, it is necessarily required to implement some strategic measures such as priorities, Virement, managing cash flow process, controlling and managing financial resources, credit management facilities etc. It is important for companies such as Silloth nursing and residential care to identify and evaluate projects which increases future cash inflows to the company. Another way to overcome shortfall situation is to motivate the customers to make payment through bank credit cards rather than using company account facility they have with the organisation. Virement which is also one of the important measure to overcome the financial shortfall which implies that manager should manage different departments by transferring funds from one department which has surplus funds to another department which is in need of it (Karanikolos and et. al., 2013).
3.2 Explain the actions that would take to overcome financial fraud
Financial fraud is an intentional deceptive act which is taken by a company insider with the financial statements with the intention of personal unfair gain. There are certain actions that companies like Silloth nursing and residential care should take in order to detect and resolve such situations. Every company should establish corporate governance, audit committees, diligent management, vigilant board of directors as well as effective internal audit functions to overcome such frauds. Companies should be alert and perform sceptical external audit functions, responsible legal counsel and adequate internal control measures and external regulatory measures. Companies should implement proper corporate strategies to overcome already committed financial statement frauds and take proper care of future occurrences of such events and restatement of confidence in the financial statement process. When these strategies are taken properly by the management the possibilities of frauds are substantially minimised. Financial statement frauds occur when one these strategies are relaxed because of self-interest, lack of diligence, pressure and dedication (Swayne, Duncan and Ginter, 2012). The possibilities of financial frauds are increased when any of these strategies are overlooked by the management.
3.3 Evaluate budget-monitoring arrangements in a health or social care organisation
Budgetary monitoring is the process of forming plans and budgets for controlling actual activity and expenses or earnings and if there is any divergence happen. After that, specific corrective measures must be required to the firm. Henceforth, for handling entire financial activities of the cited care home (Chartier, 2014). Budget control processes are required to be used. This assist in assessing financial records in order to determine issues and irregularities in the balance sheet and via spread sheet manager can cross check entire inventories, expenses inventory for error and discrepancies. Cited organisation must need to cost control centre and assess the expenditure and income during costs centre level.
4.1 Information required to make financial decisions relating to a health and social care service
Finance decision is often undertaken for managing funds and gain better outcome for longer term. The decision include asset, inventories, worker iring which are undertaken in Silloth Nursing Care Home management. Here are discussed some of associated information:
- This is paramount as this provide income source in care home.
- In order to make saving, manager should be aware and manage it.
- This is essential to understand the risk element that can harm the undertaken decisions along with evaluated tactics and strategies.
- Care home capital structure is being considered for generating additional capital.
4.2 Relationship between Silloth Nursing care home and service delivered, costs & expenditure
Element like conductive and safe environment, person centred approach and comfort and happiness for patient should be undertaken for rendering better quality at Silloth nursing and residential care (Enthoven, 2014). It is fundamental to analyse and discuss key issues with families, company need to be more suitable, proficient, responsive, safe and organised to provide quality. Prioritise should be set and focused.
4.3 Financial considerations impact upon an individual using the health and social care service
Numerous financial consideration incurs in Silloth Nursing care dome within finance that can affect service user providing training and delivering better quality mentioned here:
- They need to manage well trained staff for delivering proper service.
- Training can impact end service delivery and staffing level.
- Decision should be undertaken the supervision, control and development.
- Staff pay expenditure and staffing level requirement should be considered as individual's need.
4.4 Ways to improve the health and social care service
Financial framework is interrelationship composition between process and financial institution like banks companies, cash flow etc. Here are mentioned some improvement ways:
Benefit Cap: Government lobbying for better higher cap of benefits from patients (Berwick and Hackbarth, 2012).
- Equity & excellence: companies pay drug as per the medicine values to promote innovation and follow money.
This can affirm from report that finance is fundamental that shall be managed in health and social care segments. This is needed to follow the principles of costing and provide better quality to consumer. Budget framing is also one essential step and it is needed to resolve issue in
an effective manner.
iwithin certain time.