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Finance is an important component which helps in effective performance of different functions of organisation working in any sector. It is the duty of the manager to understand about the principles and techniques of accounting which helps in effective management of financial resources. Financial resources means the money which is available to them in form of cash and liquid securities which help in performance of day to day operations. Securing such resources helps in effective and efficient operations to attain success. Management of financial resources also hold an important position in health care sector. In this regard, manager of organisation needs to monitor different budgets and documents like profit and loss account, balance sheet, etc. NHS foundation trust provides clinical services in the UK (Ahnquist, Wamala and Lindstrom, 2012).
In the present report, principles of costing and business control systems as well as information which helps in management of financial resources, regulatory requirements, different kind of sources of income and factors which have influence upon availability of financial resources and different types of budget expenditures will be discussed. Also, management of financial shortfalls, budget monitoring arrangements and information which helps to make effective decision-making, impact of financial considerations upon individual using health and care services and ways to improve health and social care service will be studied here.
Costs: It is the value of money which is paid for acquiring something new which helps in effective performance of operations. Different items which are needed to consider includes efforts, risk associated, time consumed and material required as well as different resources. Cost which is related to prior period is not considered. For example: NHS foundation trust acquires equipment then cost includes production and delivering charges of such equipment.
Income: It is considered as the money received by NHS foundation trust in respect of services which are provided to their patients. It is further used to operate day to day activities effectively.
Cost benefit analysis: It helps in evaluation of the decisions taken by management. The benefits which are received from business activities are added and all costs which are incurred in this regard are subtracted.
Expenditure: In context of NHS foundation trust, expenditure means money spent on acquiring medical equipment. Money is spent in the form of cash or cash equivalents. It can be of two types i.e. revenue and capital expenditure. Revenue expenditure is incurred by care home regarding operations of day to day functions. On the other hand, capital expenditure is incurred on purchase of fixed assets and machineries.
Cost centre: It is considered as a business control system. It is a separate department in NHS foundation trust which is responsible for the costs incurred. They do not take care about the activities regarding generation of profit through use of their assets. It helps to control costs below the budget and contributes indirectly to improve their profits.
Break-even: This analysis helps to determine the activities which are needed to perform well to attain their break-even point. It is the point where cited care home reaches to the situation of no profit and loss. So, it plays an effective control regarding controlling of different costs like fixed and variable (Almalki, FitzGerald and Clark, 2011).
Management of financial resources is important for NHS to attain success in their business operations. In this regard, large number of various information are required regarding different aspects. It helps the manager of NHS to draw important conclusion and improve their decision making. Different business information needed are mentioned as below:
There are many rules and regulations are provided by the government of UK regarding health acre facilities which is need to implement by NHS while providing their functions. It provides the opportunity regarding effective management of their functions as per such requirements. It also contributes in managing financial resources. Such different regulatory requirements are mentioned below:
There are many systems which provides the opportunity to the manager of NHS is to mange their financial resources effectively. Through implementation of such systems large number of benefits are gathered by NHS like satisfaction of patients, build good image, development of their existing facilities etc. Such different systems are defined below:
NHS is public organisation which provides free medical facilities in UK. The main aim of organisation is to provide basic medical facilities to all the individuals of society. To provides their functions on effective basis requires sufficient amount of funds. There are many sources from which management of NHS raise their funds are mentioned below:
There are many sources from where funds are easily available to provides their business functions. It is the capability of the management is to effectively identifies the factors which impacts their capacity to gather funds from different resources. There are many factors like funding priorities, agency objectives and policies, private finance, government policies, geography, type of service etc. which impacts the availability of financial resources. Consideration of all these factors helps in providing better medical facilities to individuals of society. Such different factors are mentioned below:
The main aim of preparing different kind of budgets is to set the standards which directs the workers and medical representatives of NHS in providence of their effective functions. Through such budgets actual performance of workers is determined and compare with such standards for identification of the deviations. It provides the opportunity to the manager of NHS is to develop their skills and accomplish their targets. The different kind of budgets are mentioned below:
- Project conception and initiation: Determination and examination of the idea about identification of the benefits received by NHS (Chartier, 2014).
- Project definition and planning: Planning about the overall activities and designing of framework regarding preparation of budget.
- Project execution: Tasks are distributed among the different teams and disbursement of responsibilities.
- Project performance and control: Comparison of actual performance with budgeted to control their work.
- Project close: It is the last stage where all activities are completed and project is accomplished.
NHS provides their activities with the aim that nobody deprives from basic medical facilities. They want to help the society for improving their living standard. To provide their functions effectively, management of NHS is need to take various decisions regarding different aspects like expenditures, current facilities, view of patients etc. One of the major factor which helps in managing funds in NHS is controlling of expenditures. So, the decisions which are taken by management in the regards of expenditure is defined below:
To make effective decisions need to gather important information regarding different aspects which helps to make better financial decisions. In this regard, need to consider annual report which include financial statements and balance sheets, provides the information regarding their incomes, expenses, liabilities and assets. It is observed that there are large number of difficulties are faced by the management for achievement of their cost reduction targets. Different aspects which helps to take financial decisions are mentioned below:
The level of service would provided by taking vital information from NHS, while making their cost expenditure will gather various aspects by which they can take consideration in examine effectiveness of an organisation.
The financial considerations which are taken by the management of Airedale NHS has huge impact upon the individual which uses their services are mentioned below:
various type of financial problems occurs with in health and social care sector. For better operation and utilisation of financial resources it is required to analyse the requirement of financial resources at initial level. It is considered that there effective analysis of financial requirement helps to reduce the idleness and misuse of financial resources. There are four major ways are defined subject to improve health and social care services through financial system:
Investing in innovations
this is one of the essential aspect which helps to utilise the resources in optimum manner. An organisation can use the financial resources in innovative ideas and plans such as adopting new technology, investing in technical tools, equipments etc.
Utilisation of finance within leadership programs
Utilisation of finance in leadership programs also one of the common way adopted by organisation. By providing proper knowledge and skills subject to managing and administration of health and social care sector.
Planing and structure of finance plan
Pre planing and forecasting of financial resources is also one of the key aspect which helps to reduce the burden of financial management. More over the task requirements remain associated with finance plans and management (Richard and Shea, 2011).
It has been concluded from the above report that Birmingham Women's NHS foundation trust needs to use effective principles of accounting which help in preparation of important reports for making effective internal decisions. Management needs to implement different regulatory aspects like code of practices, audit, accountability, etc. which help in managing financial resources. There are many sources of finance like public, private, voluntary, local and national used by care home to properly conduct their operations in an effective and efficient manner. Through this, large number of benefits are gathered by care home like better services to patients, building a good image, higher profitability, etc.
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