Managing Financial Resources

TASK 1

1.1 Principles of costing and business control systems

NHS has approved six best costing principles which can be implemented in health and social care like CareTech Holding Plc. These principles are

Stakeholder Engagement

According to this principle, CareTech Holding Plc can estimates its cost by including cost related to non-finance department. The cost which are considers in non-finance department are related to clinical staff and non- clinical staff.

Consistency

This principle states the entity should adopt consistent approach in its all departments and unit for measurement of cost.

Data Accuracy

This principle states the entity like CareTech will able to compute right cost when the different data are properly recorded. To make this possible, the entity should maintain a proper recording system related to journal entries, ledgers accounts, trial balance, staying period of patient, time spent by clinical staff and other to make appropriate decisions.

Materiality

It states the entity should accurately record the cost related to material procurement and other activities for the right calculation of cost.

Causality and Objectivity

This principle entails the costing should be based on an understanding of causality to minimize its subjectivity. It means analysis of causality should be done before measuring the cost as it will help in reduction of causality.

Transparency

This principle expresses that the costing of health and social care like CareTech should be transparent and easily auditable.

CareTech Holding Plc can use underneath methods for controlling of cost-

Cost Centered Approach

In this, the manager of CareTech will give emphasis to keep the cost within the expenditure budget. It is because if the cost will increase then it will wipe out profits of the business.

Per Patient cost computation

The entity will able to set the fee of patients after valuation of cost per patient. It will be computed by dividing all variable and fixed cost incurred over a period of time by number of patients appointed in the organization.

1.2 Information needed to manage financial resource for CareTech Holding PLC

In social and health care, a entity requires financial resources to make payment to staffs, procurement of materials, equipments, medicines, beds and others. They can meet this requirement by careful planning of its revenue sources. A health and social care receives revenue in terms of fee which it receives from patients. CareTech will manage its financial resources in the best manner when the entity is practicing transparent and accurate accounting method for the measurement of cost.

Further, the efficient management of financial resources will be possible by implementation of effective management of risk will be done by identification and assessment of possible risk. In health and social care risk can be seen related to negligence of staff, death of patient due to failure of operation etc. In addition to this, preparation of budgets and auditing of reports related to procurement expenditure, administrative expenditure, financial cost, marketing expenditure, renovation of building cost and legal cost will also assist in management of financial resources in CareTech.

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1.3 Regulatory requirements need to be satisfied while managing financial resources

In health and social care, due diligence is must required for the safety of patients. There are various authorities or regulators who make rules and regulations for health and social care.. Following are the regulators who specified regulatory requirements for health and social care-

Care Quality Commission

It inspects whether the health and social care entities are meeting national standards or not. On the basis of this inspection, they issue their findings to aware people about the degree of services provided by the particular entity. This helps people to make better choices for selecting appropriate health and so