Financial Shortfalls1 Explain the concept of financial shortfalls<\/p>\n
A financial shortfall is the term used to describe a situation where a firm\u2019s liabilities or obligations (financial) exceed the available cash balances. The nature of the shortfall can be either temporary or persistent. The temporary shortfall arises from a circumstances set that is unique while a persistent shortfall is indicative of a failing financial management setup. Solutions for shortfalls do not mostly depend on their nature but on the amount involved and on the financing avenues available to the firm.<\/p>\n
Where a firm finds itself in a shortfall situation, it can consider spending readjustment in the short run. This can be done through the firm implementing an all financial tightrope technique in the near future. All discretionary expenditure like clothing, cable television, food outings, lifestyle choices like walking instead of driving or taking transit means help in reducing expenditure therefore improving the firm\u2019s financial position.<\/p>\n
Long run shortfalls could be exemplified by the pension shortfalls which a lot of firms experience due to the obligations associated to pensions exceeding the returns generated from the assets owned by the pension fund. <\/p>\n
To mitigate long term shortfalls, firms should employ hedging techniques which will protect against adverse price variations in the market. This is well observed in resource firms which normally sell their future production in forward markets and mostly so if future capital spending is expected to be substantial. The hedging ensures that future financial obligations wil have available funding.<\/p>\n
Explain different types of frauds and what actions can be taken at the time of suspected frauds?<\/p>\n
Financial fraud is deliberate financial deception which a fraudster initiates with the aim of personal gain. Most financial scams involve white collar criminals who almost always possess specialized knowhow and criminal intentions. Fraud involves many activities which are different and could range from a simple con theft to fraud involving cheques and identity theft to very complex rackets. Due to its nature and means of propagation, fraud can possibly assume many forms and the fraudster\u2019s imagination is seemingly the only limit there can be. The most common types of fraud include;<\/p>\n
Identity\/Banking fraud: This is where a fraudster acquires a victim\u2019s banking details and uses them to access and steal from their bank accounts. It is advisable that one uses the security steps that most electronic banking institutions offer to avoid falling prey to such a scam. Institutions should also regularly update the details of their staff to prevent falling prey to theft from an outgoing member of staff.<\/p>\n
Cheque fraud: This is where a fraudster issues cheques that eventually bounce due to funds in the issuing account(s) being insufficient. Individuals receiving cheques as a form of payment should insist on bankers cheques or decline to accept cheques altogether. Where customers insist on making payment through cheques, it is cautionary to await the clearance of the cheque before releasing any form of service or product to them.<\/p>\n
Payments and Invoices fraud: This is a form of fraud that capitalises on a business\u2019 flawed accounting system. The fraudsters will use this weakness to make payments for invoices for unordered or un-received services and goods. The fraudster can also make a payment to employees who are actually not existent or existing employees receiving excess payments. To avoid such scams, the invoices should be crosschecked against the products or services received and ensure that the payment process involves several people.<\/p>\n
Direct theft: The fraud involves stock handling staff lifting items directly or the payments received being pocketed and the sale either not being recorded or getting deleted. The management should ensure that the importance of the process of checking the stock and the sales is understood by all.<\/p>\n
Cash Collection Schedule<\/p>\n
July August September October November Bad Debts <\/p>\n
Cash Sales \u00a3 6,500 \u00a3 5,250 \u00a3 7,400 A\/C Sales July \u00a3 2,000 \u00a3 16,000 \u00a3 1,400 \u00a3 600 <\/p>\n
A\/C Sales Aug \u00a3 3,000 \u00a3 24,000 \u00a3 2,100 \u00a3 900 <\/p>\n
A\/C Sales Sept \u00a3 4,000 \u00a3 32,000 \u00a3 2,800 \u00a3 1,200 <\/p>\n
Cash Collection Schedule for September<\/p>\n
September <\/p>\n
Cash Sales \u00a3 7,400.00 <\/p>\n
A\/C Sales July \u00a3 1,400.00 <\/p>\n
A\/C Sales Aug \u00a3 24,000.00 <\/p>\n
A\/C Sales Sept \u00a3 4,000.00 <\/p>\n
Total \u00a3 36,800.00 <\/p>\n
Inventory Purchase schedule for September<\/p>\n
Sept Purchases \u00a35,000 <\/p>\n
Ac Payable \u00a316,000 <\/p>\n
Total \u00a321,000 <\/p>\n
Budget<\/p>\n
Income Statement<\/p>\n
Inflows Opening Balance \u00a311,000 <\/p>\n
Cash Collections \u00a336,800 <\/p>\n
Total Cash Inflows \u00a347,800 <\/p>\n
Less Purchases \u00a321,000 <\/p>\n
Gross Income \u00a326,800 <\/p>\n
Outflows Administration expenses \u00a39,000 <\/p>\n
Depreciation \u00a34,000 <\/p>\n
Net Income \u00a313,800 <\/p>\n
b. Cash Budget<\/p>\n
Available Cash Net Income \u00a313,800 <\/p>\n
Add Back Depreciation allowance \u00a34,000 <\/p>\n
Total Available \u00a317,800 <\/p>\n
Capital expenditure Equipment \u00a318,000 <\/p>\n
Dividends \u00a33,000 <\/p>\n
Financed By Bank Loan \u00a38,200 <\/p>\n
Cash Balance \u00a3 5,000.00 <\/p>\n
Task 4<\/p>\n
What kind of information is required for financial decision making in health and social care organization?<\/p>\n
Information is the grease that keeps the decision making process moving. The process of making financial decisions involves selecting or picking a desired financial action from a predefined list of viable alternatives. It should be understood that even making no change to normal action is still a part of decision making. In making decisions the procedure followed is; Gather information \u2013 Decide on the most viable course of action \u2013 implement the reached at decision \u2013 observe the results \u2013 and then gather some more information. By observing the central role that information plays in this process, it can then be easy to understand why it has such a vital role. How effective and the quality of the financial decision made will depend on the timeliness, relevance and accuracy of the information gathered.<\/p>\n
For health organizations, a financial planner must;<\/p>\n
Gather data on all possible actions, for example if an ASC unit is to be constructed, data on the possible benefits and demerits of constructing it or not should be collected. <\/p>\n
Secondly, the occurrences that will have influence on expected outcomes should also be known, this includes staff, financial, expertise and regulatory requirements.<\/p>\n
Third, the planner should get information that will allow them to determine the probability of occurrence of the events that could affect the results.<\/p>\n
Fourth, any information that would assist in accurate estimation of the results of the specific action plan should be sought. This includes the expected profits, shortfalls and expenditure.<\/p>\n
In health and social care organization, explain the concept of cost, expenditure and service delivered<\/p>\n
Cost \u2013 Economically, costs can be defined as the value of the forgone or sacrificed opportunity emerging from an engagement of a resource. In strict application, this means that we consider the value of the opportunity which has not been taken but which was the best under prevailing circumstances. It is important to note that costs are not necessarily monetary and should be extended to those costs that not only accrue to the health service but to those that face the service\u2019s user and society in its entirety. The cost concept involves aspects like average costs which are the unitary costs; the fixed costs which in the short run are not affected by the production quantities; the incremental costs which arise from increased activity on a particular service; the marginal costs which examine the increase in production cost associated with an increase in productivity by one unit; total costs which encompass all the costs involved in the production process, and variable costs which are those costs which are proportionally related to the quantity processed but vary with production levels.<\/p>\n
In healthcare, we can define costs as<\/p>\n
Indirect costs: costs that are not easily quantifiable since they are mostly losses in productivity that arise from a health problem<\/p>\n
Avoided costs which are avoidable or avoided through an intervention by the healthcare sector.<\/p>\n
Direct costs; those costs that the stakeholders of healthcare bear. It includes costs on families, government and patient\u2019s investment in management of healthcare situations.<\/p>\n
Expenditure<\/p>\n
This is the investment that stakeholders make in healthcare that is directly related to the problem at hand. Expenditure can take many forms and affect many people. These include the government which has to make very substantial investments in the field every year, the consumers who have to shoulder part of the health investment and the society which will have to expend more energy to recover the loss in productivity by one of its member.<\/p>\n
The two concepts described above have direct impact on the delivery of services to society members who need them. For example, an individual will weigh down the resources available for their family if they fall sick. Luckily, the society today understands medical care insurance products and uses them. This makes it easy to deal with these issues since the cost to family or life savings and investments\u2019 is negligible.<\/p>\n","protected":false},"excerpt":{"rendered":"
Financial Shortfalls1 Explain the concept of financial shortfalls A financial shortfall is the term used to describe a situation where<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-48757","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\n