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MC4F15 Managing Financial Resources Level 4

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INTRODUCTION

Finance is the most crucial requirement which is needed by the management for the efficient running of the firm's operations in an effective manner. this is the report that is relied upon by the Silloth Nursing and Residential Care Home. This report will elaborate on how the systems are implemented along with cited care homes for managing financial resources, budget, and expenses. By implementing these kinds 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 that could be implemented by the Silloth Nursing and Residential Care Home to manage its financial resources.

PART 1

1.1 Principles of Costing and Business Process System:

Cost is the tool control that occurs by the organisation is identified, quantified, and published in a higher efficient manner, and these are compared along with the budgeted figure. This kind of comparison provides management data that they are needed to analyse the effects of their operations and to help them develop their business decisions. This care home is needed to assess how much they are required to incur on the products and services, but first of all, the firm is needed to calculate the costs of other things that would earn higher profits or lose money by measuring costs that 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 from 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 from the product, which can be rightly said that these costs are highly elaborated along with goods and services. Direct costs are staff costs, handling of patients, domestic, establishment costs, staff costs, etc. while on the other hand, indirect costs are those which are not directly apportioned to the particular goods.

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The business control framework of the cited home is additionally needed to determine the compliance issues such as following various laws, rules, and regulations that are determined along with health care. In the business, there are so many principles that would be adhered and a few of them are as follows:

  • Charging of abnormal cost in costing: In the firm, there are so many uncommon incidents that occur like fire, riots, and various kinds of loss which have to be borne as this would be adopted as the abnormal cost. There would be no connection between it along 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 the allocation of the resources.
  • Previous costs do not to be ignored: Consideration would not be rendered to any cost that has been formed in the past period as that excessive load would be formed on the organisation.
  • Determining the entire costs of the organisation: This kind of principle of costing concentrates on the specific good or activity of a project. As per this principle 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 entire kinds of costs. For example, the cost for a cited cost must be forecasted a project budget will be predicted and a project budget will be formed. After this, entire activity costs must be handled during the occurrence.

1.2 Information Which is 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 a yearly basis (Marten and et. al., 2014). Cash flow statements demonstrate the movement of cash inflows and outflows in this cited firm. this assists the cited organisation in assessing the movement of the cash inflows and outflows in this cited organisation. This assists the organisation in assessing funding needs and efficient utilisation of these resources in an effective manner. Balance sheets of the cited organisation render a most transparent picture of assets, liabilities, and shareholders' investments. While firm's income statement likewise needs to be assessed as the profits and loss statement that could demonstrate the operation's records of earnings and profitability for a particular period of time. Silloth Nursing and Residential Care Home's net income for the ended 31st March 2008 was a negative figure during 2007.

Performance calculation of strategic objectives is important information that needs to be in context with the handling of financial resources. This kind of performance measure covers market shares, cash flow, effectiveness, and market position. Objectives of the cited company are achieved by consumer satisfaction, operation dynamics, and productivity. Consumer demand is needed to be fulfilled (Cresswell and Sheikh, 2013). For handling financial resources in an organisation, the manager of the cited organisation needs to do about employee level and guarantee about services about employees are rendering to assess about the employee level, and guarantee about the services employees are rendering to the organisation's client, assess expenses concerning the capital, assess the amount of wages which need to pay to the organisation, and also allocate of resources that will brief to the 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 in reducing financial fraud, moralising, ethical practices and equality, consumer security, responsibility, assisting 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 effective management and adequacy of court. However, a proprietary firm is not formed according to the law. But there is a need to inform HM and customs. The whole of the limited organisation is controlled by law to publish annual financial statements. There is a need to make financial statements to provide information which are directly connected to 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 a diverse factors that could form the financial systems of diverse levels. For handling financial resources, there are various systems: which are budgeting, IT systems, financial accounting systems, payment systems, and auditing systems. However, a few of them are as follows:

The IT system will access adequate information, producers, shares, storage, and entry access by various kinds of departments. For instance, digital payment systems and more (Luo, LaPierre, Hughes, and Waite, 2012).

Budgeting helps organisation to stop overspending, motivating staff in order to gain budgeting goals and pre-set objectives.

1.5 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 effective health care services to the public which forms emergence and expansion of organisation venture. Henceforth, self-pay, non-patients, tax assistance from the government, third-party payer insurance, and diverse kinds of earnings.

The crucial source of earnings for cited organisation care is funding from regulatory bodies, diverse grants, rent grabbed from the leased property, and earnings from the revaluation of the organisation assets (Crawshaw, 2012). In general, there are various sources of earnings that emerge from charitable care homes. So that gathering from fundraising events.

1.6 Analyse the Factors That Affect the Availability of Financial Resources:

Accessibility of the financial resources of health care conveniences like Silloth Nursing and Residential Care Home is highly influenced by various financial risks and payment by service providers and business organisations. Revenue can likewise be covered from diverse sources like governing agencies, various social insurance resources like- tax, individual organisations and premiums (Murdoch and Detsky, 2013). The various healthcare organisations operating their working their developing countries face constraints form of gaining appropriate finance running their work in emerging countries face issues raising appropriate funds due to low-income levels and scarce institutional and management-related capacity. Additionally, the accessibility of the organisation relies on out-of-pocket payment in these countries. The second crucial factor is connected to risk pooling. By taking assistance of risk pooling cited care home develop and control raised capital for sharing of financial risks among diverse contributors.

1.7 Review Different Kinds of Budget Expenditure in Silloth Nursing and Residential Care Home:

A budget is a planning tool that is quantified in monetary terms, which are incorporated and sanctioned prior to a fixed period of time, highly demonstrating planned income to be produced expenses to be happen during the period, and capital to be 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 includes personal budgets, operating budgets, sales budgets, and others (Buchbinder and Shanks, 2016). The operational budget reflects the products and services of the cited organisation that can begin as per the service sector during the budget period.  The personal budget contains the identification of the expenses which are incurred by operational as per the financial year. Expenses contain labor costs and others that are connected to personnel. As per this sector, human resources has achieved a significant impact on the personal budget which could consequence of the personal budget, and this is completed as per the emerging competition and enhanced validity of the resource-driven tools.

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1.8 How Decisions About Expenditures are Made:

This process of decision-making on the expenditures in care homes is based on in-depth analysis and recognising the requirement of business houses. However, for handling the financial resources this is the key aspect through which the whole organisation's main decisions are formed (Mladovsky and et. al., 2012). Estimating 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, the present value of cash inflow and the present value of cash outflows are considered under this. Hereunder, diverse inflows and outflows are measured which is implemented in order to elaborate whether profits would be incorporated or not.
  • Profitability analysis: As per this, this is determined whether adequate balance is incorporated in expenses or not.

PART 2

2.1 How Financial Shortfalls Can Be Managed:

Financial shortfall is a situation in which a company cannot cover its obligations or liabilities due to a lack of availability of funds. A Financial shortfall can be temporary or long term in nature which arises because the 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 that will pay out dividends for future needs of funds that will help overcome 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 necessary to implement some strategic measures such as priorities, retirement, 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 that increase future cash inflows to the company. Another way to overcome the shortfall situation is to motivate the customers to make payments through bank credit cards rather than using the company account facility they have with the organisation. Virement is also one of the important measures to overcome the financial shortfall which implies that managers should manage different departments by transferring funds from one department that has surplus funds to another department that is in need of them (Karanikolos and et. al., 2013). 

2.2 Explain the Actions That Would Take to Overcome Financial Fraud

Financial fraud is an intentional deceptive act that 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, a vigilant board of directors as well as effective internal audit functions to overcome such frauds. Companies should be alert and perform skeptical 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 fraud are substantially minimised. Financial statement frauds occur when one of these strategies is relaxed because of self-interest, lack of diligence, pressure, and dedication (Swayne, Duncan, and Ginter, 2012). The possibilities of financial fraud are increased when any of these strategies are overlooked by the management.

2.3 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. After that, specific corrective measures must be required for the firm. Henceforth, for handling the entire financial activities of the cited care home (Chartier, 2014). Budget control processes are required to be used. This assists in assessing financial records in order to determine issues and irregularities in the balance sheet and via spreadsheet the manager can cross-check entire inventories, and expenses inventory for errors and discrepancies. The cited organisation must need to cost control center and assess the expenditure and income during the cost center level.

2.4 Information Required to Make Financial Decisions Relating to a Health and Social Care Service

Finance decision is often undertaken to manage funds and gain better outcomes for the longer term. The decision includes assets, inventories, and worker iring which are undertaken in Silloth Nursing Care Home management. Here is some of the associated information:

  • This is paramount as this provides income sources in care homes.
  • In order to make savings, managers should be aware of 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.

2.5 Relationship Between Silloth Nursing Care Home and Service Delivered, Costs & Expenditure

Elements like a conducive and safe environment, a person-centered approach, and comfort and happiness for patients should be undertaken to render better quality at Silloth nursing and residential care (Enthoven, 2014). It is fundamental to analyse and discuss key issues with families, company needs to be more suitable, proficient, responsive, safe, and organised to provide quality. Prioritise should be set and focused.

2.6 Financial Considerations Impact Upon an Individual Using the Health and Social Care Service

Numerous financial considerations incurred in Silloth Nursing Care Dome within finance that can affect service users providing training and delivering better quality are mentioned here:

  • They need to manage well-trained staff to deliver proper service.
  • Training can impact end-service delivery and staffing levels.
  • Decisions should be undertaken the supervision, control, and development.
  • Staff pay expenditure and staffing level requirement should be considered as individual needs.

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2.7 Ways to Improve the Health and Social Care Service

The financial framework is the interrelationship composition between processes and financial institutions like banks companies, cash flow, etc. Here are some improvement ways:

Benefits Cap: Government lobbying for a better higher cap of benefits for patients (Berwick and Hackbarth, 2012).

  • Equity & Excellence: companies pay drugs as per the medicine values to promote innovation and follow the money.

CONCLUSION

This can be affirmed by a report that finance is fundamental and shall be managed in the health and social care segments. This is needed to follow the principles of costing and provide better quality to consumers. Budget framing is also one essential step and it is needed to resolve issues effectively.

 

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