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Managing Financial Resources in Health and Social Care

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Managing Financial Resources in Health and Social Care

Introduction:

The organization is the field of implement the more effective work. The main bodies are the decision maker and the others are the followers. In incremental budgeting system is focus on the all sectors of work in the all budget systems. They give more emphasize on the analysis the main rules in the budgetary control systems. In the financial result the incremental budgetary control system is widely used to effectively evaluate the time in the management.  They use some innovative techniques to implement the method of calculation and managerial activities. In the incremental budget the increment is the prime factors but others factors also maintain to control the budgetary activities in the budget. To prepare the incremental budget two methods are used to evaluate the criteria. One is zero based and another is condition based way. In two ways the budget are calculating some specific time portion to effectively do the work. In the zero based budgeting systems all sectors are calculated. Controlling budgeting work o that organizations their incomes is fluctuating, high fixed costs ,or income that depends on the sunk cost as well as hospitals and others NGOs .                                          

Task1.1:

Variable cost per unit= (Total cost high activity – total cost low activity) / (Units produced high activity – Units produced low activity) (Holtman, 2014)

= (41,000 – 40,000) / (36,000 – 24,000)

= .08333

According to year 20X3,

Total fixed cost = 41,000 – (.08333 * 36000)

=38,000

Task1.2:

In the organization incremental budgeting is widely used. In this process slight changes are analysis in this budget. The manager doesn’t want to waste their time to elaborate the working unusual sectors. They only evaluate the specific work to improve the budgetary control systems. They give more emphasize on the analysis the main rules in the budgetary control systems. In the financial result the incremental budgetary control system is widely used to effectively evaluate the time in the management. To calculate the financial result the financial bodies are calculate to motive the financial condition in the organization. In this portion the management truly to divide the management the activities in different sectors to effectively motivate the work. They use some innovative techniques to implement the method of calculation and managerial activities. In the incremental budget the increment is the prime factors but others factors also maintain to control the budgetary activities in the budget.

Actually in here the activities are running to meet the goal in the company. They annually evaluate the total expenses and profit and then analyze that to a portion of working condition (Riley, 2012). To prepare the incremental budget two methods are used to evaluate the criteria. One is zero based and another is condition based way. In two ways the budget are calculating some specific time portion to effectively do the work. In zero based budgetary system the main focus to provide the results in the shortest possible of time. They try to effectively utilize the time in all working sectors. The managers here not spend too much time to find the solutions in taking decision. On the other hand in incremental budgetary system focus on the cost. And they try to minimize the cost in such away to maximize the profit. They reduce laborer cost and other related expenditures to earn the profit within the organization.

Task1.3:

The advantages of zero based budgeting

In the zero based budgeting systems all sectors are calculated. In that part the budget are calculate to meet the goal in the shortest possible of time.  Evaluate the resources first. They give more emphasize on the resources first. They provide the sufficient result to the users to take the clear decision the base of zero based budgeting. They motivate the users to evaluate the time in the short of time but dot sacrifice the betterment in the company structure. The mangers always maintain a question mind to find the fault in the organization. Thus way the employees are influences to do the work more effectively. In zero based budgetary system the main focus to provide the results in the shortest possible of time. They try to effectively utilize the time in all working sectors. The managers here not spend too much time to find the solutions in taking decision.

The disadvantages of zero based budgeting

The techniques are not utilized properly to evaluate the time. Justify of work are not motivated properly to improve the work in the management. And it also difficult for the mangers to handle the work according to the users need and demands. Zero based budgeting is so difficult to manage in the shortest possible of time. Ranking some time doesn’t match with the condition and the management prediction doesn’t match with the work. Time evaluation here not properly utilizes to meet the goal in the organization.

The advantages of conditional budgeting:

Controlling budgeting work o that organizations their incomes is fluctuating, high fixed costs ,or income that depends on the sunk cost as well as hospitals and others NGOs (Drury, 2000). This technique respectively works on the fluctuating cost and evaluates the leverage system in the firm. This process reduce the negative effect on the zero based budgeting system. In incremental budgetary systems are main focuses on the cost. And they try to minimize the cost in such away to maximize the profit. They reduce laborer cost and other related expenditures to earn the profit within the organization. They provide the sufficient result to the users to take the clear decision the base of zero based budgeting. They motivate the users to evaluate the time in the short of time but dot sacrifice the betterment in the company structure. The mangers always maintain a question mind to find the fault in the organization. Thus way the employees are influences to do the work more effectively.

Disadvantages of conditional budgeting:

Zero based budgeting is so difficult to manage in the shortest possible of time. Ranking some time doesn’t match with the condition and the management’s prediction doesn’t match with the work. Time evaluations here not properly utilize to meet the goal in the organization.

Task1.4:

The importance of budgetary description is beyond description. This is widely used in every sector of the organizations. The both systems individually evaluate the activities in different portion of time. They motive the workers to do the job more effectively to sustain the market position in the competition period. They at the same time satisfy the customers and analysis on their need and demand. They evaluate the customers’ satisfaction levels. Incremental budgetary systems the staff can gather knowledge about the applicable area and the objectives. In zero based budgetary system the main focus to provide the results in the shortest possible of time. They try to effectively utilize the time in all working sectors. The managers here not spend too much time to find the solutions in taking decision (Drury, 2000).

Task1.5:

The activeness is begun by the effectiveness. The working performance degree is measure on the bases of effectiveness. It means to do the right work in right time. The aim of the work will meet the success by effectiveness. In economic aspect effectiveness is widely utilized. In the organization incremental budgeting is widely used. In this process slight changes are analysis in this budget. The manager doesn’t want to waste their time to elaborate the working unusual sectors. They only evaluate the specific work to improve the budgetary control systems. The give more emphasize on the analysis the main rules in the budgetary control systems. In the financial result the incremental budgetary control system is widely used to effectively evaluate the time in the management (Brewer, 2008). Incremental budgetary systems the staff can gather knowledge about the applicable area and the objectives. Ranking some time doesn’t match with the condition and the management’s prediction doesn’t match with the work. Time evaluations here not properly utilize to meet the goal in the organization.

Task2.1:

St Edith memorial take different steps to manage the short fall of the hospital by taking different steps. Hospital can minimize the cost by reducing the other relating activities. They reduce the labor cost and other maintaining expenses. They also collect money from making well communication with the local people. Another important factor is to attract the private patients for nursing and care. They also improve their financial position by improving the IT sectors. Making well communication to the all classes of people and build a strong bonging to all level of patients. They servers the patient with more hospitality and thus attract the patient to take the serves by them. If they advertise their caring facilities then the poetical customer are eagerly come to their hospitals. If the authority takes proper steps and up to date their activities then the employees and the failures easily mitigate.

Task 2.2:

The key point to improve the hospital economic conditions is to provide importations effectively. If the hospitals make well communication to their local people then the short fall may be reduced. If they advertise their policy and caring facilities then the others potential patience’s will be encourage coming in the hospital. Hospital can minimize the cost by reducing the other relating activities. They reduce the labor cost and other maintaining expenses. They also collect money from making well communication with the local people. Another important factor is to attract the private patients for nursing and care. They also improve their financial position by improving the IT sectors. Here it also mention that the hospital is not well structured so managing the well structure also increases to attract the patience (Grandlund and Lukkan, 1998).

Task2.3:

St Edith memorial can introduce many strategies to cut the cost and maximize the profit to remove the deficit. They first of all were devising the all activities in different sectors on the base of their working conditions. Those help the employees to work effectively and understand their works. Improve the IT sectors and implement the other new innovative to attract the patients. They introducing recycling policy to reduce the cost .if they remove the unusable lighting facilities’ that also reduce the cost. The management also calls several meeting to overlap the failures and take decision by everyone opinions. Hospital can minimize the cost by reducing the other relating activities. They reduce the labor cost and other maintaining expenses. They also collect money from making well communication with the local people. Another important factor is to attract the private patients for nursing and care

Task3.1:

Now in this situation the management needs to take proper steps to remove the shortfall. Within 3 years if that situation sustain then they can’t survive in the market. Hospital can minimize the cost by reducing the other relating activities. They reduce the labor cost and other maintaining expenses. They can introduce many strategies to cut the cost and maximize the profit to remove the deficit. They first of all were devising the all activities in different sectors on the base of their working conditions. They also collect money from making well communication with the local people. Another important factor is to attract the private patients for nursing and care. They also improve their financial position by improving the IT sectors. Making well communication to the all classes of people and build a strong bonging to all level of patients. They servers the patient with more hospitality and thus attract the patient to take the serves by them. If they advertise their caring facilities then the poetical customer are eagerly come to their hospitals. They introducing recycling policy to reduce the cost .if they remove the unusable lighting facilities’ that also reduce the cost. The management also calls several meeting to overlap the failures and take decision by everyone opinions (Small business, 2013). They are ensuring some physiotherapy or occupation therapy in the same time to attract the customer views.

Task3.2:

In case of fraud the management has to take right step in right time to control the fraud. Actually fraud are arises when the employee are not satisfied with their payments. That’s means that they give services but get little in the feedback. If the management takes proper steps in right time then they can reduce the employees’ fraud tendency (Hilton, 1999).  First they introduce to provide incentives and reward on the bases of their work. That motivated the employees to do the work more effectively and influence to do the best things in the organizations. If all the sectors are work under routine wise then nothing will motivated to miss the trend in the working environment. Make well communication with the all levels. That helps the sectors workers do their job more efficiently. And another crucial thing is training. If the workers are provided training, it will enlarge their knowledge and motivated them not to do the bad things with their organizations.

Task3.3:

The management needs to take proper steps to remove the shortfall. Within 3 years if that situation sustain then they can’t survive in the market. Hospital can minimize the cost by reducing the other relating activities. To improve the hospital economic conditions is to provide importations effectively. If the hospitals make well communication to their local people then the short fall may be reduced. If they advertise their policy and caring facilities then the others potential patience’s will be encourage coming in the hospital. They reduce the labor cost and other maintaining expenses. They also collect money from making well communication with the local people. Another important factor is to attract the private patients for nursing and care. They also improve their financial position by improving the IT sectors. The management takes some short terms and long term decision to remove the shortfall (Emsley, 2005). They can introduce many strategies to cut the cost and maximize the profit to remove the deficit. They can meet the deficit in two ways. That are-

Responsibility budgetary systems

And Adjustment of fraud

Responsibility budgetary systems:

First choose the best way how to devise the work and then classify the work according the work.

Remove the unusable lighting facilities’ that also reduce the cost. Hospital can minimize the cost by reducing the other relating activities. They reduce the labor cost and other maintaining expenses.

Advertise their policy and caring facilities then the others potential patience does will be encourage coming in the hospital. Hospital can minimize the cost by reducing the other relating activities.

Adjustment of fraud:

Actually fraud are arises when the employee are not satisfied with their payments. That’s means that they give services but get little in the feedback. If the management takes proper steps in right time then they can reduce the employees’ fraud tendency. First they introduce to provide incentives and reward on the bases of their work. That motivated the employees to do the work more effectively and influence to do the best things in the organizations.

Task4.1:

Information mainly taken on the basis of financial and non financial decision .the hospital authority need to take appropriate decision to improve the situation. Evaluate the all the activities and manage the actual planning. If the authority evaluates the all the alternatives then they can take the appropriate decision to plane the most effective work (Herbert, 1960).actually great work depends on the most cost minimization work.

Task4.2:

Vertical analysis between the two companies:

 St Edith Memorial           Neighboring Hospital
Income streams 20102010
Income from NHS 66.09%50%
Income from local government17.39%12.94%
Income from medical  insurance16.52%37.06%
Total income 100%100%
Cost analysis        
Labour costs 47.83%33.50%
Depreciation 17.39%16.47%
Drugs 21.74%17.65%
IT and communications 2.6%.588%
Other variable costs -catering, laundry6.08%7.05%
Fixed costs 13.04%10%
Total costs 108.7%85.29%
Surplus/deficit8.7%14.47%

Source: BAT, 2014

Comments on the results:

In vertical analysis the St Edith Memorial has greater variability than the Neighboring hospital. The St hospital has deficit than the others and that prove that the income is not well organized in the St Edith hospital that’s why they fall the deficit in every year.

Horizontal analysis between the two companies:

 St Edith MemorialSt Edith MemorialNeighboring HospitalNeighboring Hospital
Income streams Increase/ decreasePercentage (%)Increase/ decreasePercentage (%)
Income from NHS 0000
Income from local government10005.2610004.76
Income from medical  insurance-4000-17.3930005
Total income -3000-2.5440002.4
Cost analysis          
Labor costs 20003.7720003.64
Depreciation 10005.26300012
Drugs 300013.6420007.14
IT and communications 10005000
Other variable costs -catering, laundry0010009.09
Fixed costs 0010006.25
Total costs 70005.9390006.62

Source: BAT, 2014

Comments on the results:

In horizontal analysis the St Edith Memorial has greater variability than the Neighboring hospital. The St hospital has deficit than the others and that prove that the income is not well organized in the St Edith hospital that’s why they fall the deficit in every year.

Task4.3:

To improve the deficit the CF can implement some strategies to make profit for the firm. They can improve new policy. They also add new technology and some policy to improve the method. Choose the best way how to devise the work and then classify the work according the work.

Remove the unusable lighting facilities’ that also reduce the cost. Hospital can minimize the cost by reducing the other relating activities. They reduce the labor cost and other maintaining expenses.

Task 4.4:

The management can improve the deficit situation by some steps that’s are –

It can change the operation cost like labor cost, lighting cost. The management can introduce the recycle system in the operation. The management can improve the IT sectors. It can take well communication to the local people. The management can improve the structure system in the hospital. The management can advertise the nursing facilities to the all local people.

Conclusion:

Effectively motivated work meet the profit and gain the success in the market after a long or short time duration. In the organization incremental budgeting is widely used. In this process slight changes are analysis in this budget. The manager doesn’t want to waste their time to elaborate the working unusual sectors. They only evaluate the specific work to improve the budgetary control systems. The give more emphasize on the analysis the main rules in the budgetary control systems. In the financial result the incremental budgetary control system is widely used to effectively evaluate the time in the management. Incremental budgetary systems the staff can gather knowledge about the applicable area and the objectives. In zero based budgetary system the main focus to provide the results in the shortest possible of time. They try to effectively utilize the time in all working sectors. The management needs to take proper steps to remove the shortfall. Within 3 years if that situation sustain then they can’t survive in the market. Hospital can minimize the cost by reducing the other relating activities.

Reference:

Riley, J 2012. ‘Finance and Accounting: Incremental budgeting’, Available at – http://www.tutor2u.net/business/accounts/incremental-budgeting.htm, Accessed at- 17.04.2014

Merritt, C 2014. Small Business: ‘A List of Benefits of Zero-Based Budgeting’, Hearst Newspapers, LLC.

Brewer, D 2008. ‘Management Efficiency Effectiveness and Economy’, Available at -https://suite101.com/a/management-efficiency-effectiveness-and-economy-a195294, Accessed at- 17.04.2014

 Holtzman, P, M 2014. ‘Managerial Accounting for Dummies’, John Wiley & Sons, Inc, Available at – http://www.dummies.com/how-to/content/use-the-highlow-method-to-separate-mixed-costs-int.html, Accessed at- 17.04.2014

Herman, B, 2013. ‘9 Ingenious Ways to Cut Costs at Your Hospital’, Asc Communications’, Available at- http://www.beckershospitalreview.com/finance/9-ingenious-ways-to-cut-costs-at-your-hospital.html, Accessed at- 17.04.2014

 Cullen, M, 2012. ‘How to reduce fraud and error in the public sector’, Guardian-professional Available at – http://www.theguardian.com/public-leaders-network/2012/aug/22/reduce-fraud-error-public-sector, Accessed at- 17.04.2014

Accounting education, 2012. ‘Budgetary control techniques’, Available at- http://www.svtuition.org/2012/03/budgetary-control-techniques.h, Accessed at- 17.04.2014

Herman, B, 2011, ‘10 Ways for Hospitals and Health Systems to Increase Profitability in 2012: Asc Communications’, Available at – http://www.beckershospitalreview.com/finance/10-ways-for-hospitals-and-health-systems-to-increase-profitability-in-2012.html, Accessed at- 17.04.2014

Drury, C 2000. ‘Management and Cost Accounting, 5th edition, London: ThomsonLearning.12.

Granlund, M, and Lukka, K  1998. ‘It’s a small world of management accounting practices’. 

Hilton R, W 1999. ‘ Managerial Accounting’, Fourth edition, Irwin McGraw -Hill, USA.21.

Herbert, A, S 1960, ‘The New Science of Management Decision’, Harper &Brothers, New York, 1960.

Emsley, D 2005. ‘Restructuring the management accounting function: A note on the effect of role involvement on innovativeness.

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