Running Head: ANCHOR TRUST
Managing Finance in the Health and Social Care sector
[Student Name]
[Date]
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Table of Contents
Task#1 ............................................................................................................................................. 3
Introduction ................................................................................................................................. 3
Importance of Accounting and Finance in Anchor Trust ............................................................ 3
How Financial Software Is Utilised Within the Anchor Trust .................................................... 4
How Key Financial Ratios Are Used By Anchor Trust .............................................................. 5
Long-Term and Short-Term Financial Needs in Anchor Trust................................................... 6
Benefits and Limitations of Various Sources of Finance Available for Anchor Trust ............... 7
Process of Budgetary Control and Revenue Management at Anchor Trust ............................... 7
Rules of Double-Entry Book-Keeping and How It Is Used to Maintain Financial Records ...... 8
Conclusion................................................................................................................................... 9
Task#2 ........................................................................................................................................... 10
Introduction ............................................................................................................................... 10
Organisational Budgets in the Given Health and Social Care .................................................. 10
Evaluation of Capital Expenditures and Investment Projects Using Different Investment
Appraisal Techniques ................................................................................................................ 12
Recommendation ....................................................................................................................... 14
Conclusion................................................................................................................................. 15
References ..................................................................................................................................... 16
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Managing Finance in the Health and Social Care sector
Task#1
Introduction
Financial management is defined as a decision-making process which is used to entail the
use of different theories along with the concepts and tools that are made to make better financial
decisions. On the other hand, accounting thus helps in providing a simple way that can be used in
terms of gauging the financial performance of the health care sector along with the budget for its
functioning (Haldane et al., 2021).
Therefore, it is completely clear that financial management is considered an important
factor in the healthcare sector. In the initial stages, financial management is considered and
viewed in a much-unsophisticated manner. Therefore, the main purpose of this assignment is to
identify the importance of accounting and finance management in health and social care
organisations. Moreover, the usage of the financial software to identify the accounting functions
and also identifying the different perspectives that are related to the budgeting and financing in
the healthcare sector.
Importance of Accounting and Finance in Anchor Trust
In some health care organisations, the financial demands of the project should be made
for some of the goods and services. On the other hand, most of the management should focus on
estimating the total amount which is also spent on the different project. Therefore, the accounting
department should focus on seeing the funds that have to be raised in terms of meeting the needs
(Yip et al., 2019). Thus, with a progression of the financial management, several other factors are
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also considered which usually includes the planning, acquisition, and utilisation of the other
funds to improve the proficiency of the different organisation.
Financial management in the healthcare sector usually involves the evaluation of the
financial effectiveness along with the overall operations that are related to the Anchor Trust. This
also helps the Anchor Trust to consider planning for the future (Boisjoly et al., 2021). For
instance, a hospital usually focuses on assessing the revenue of the emergency room and also
discovering that the hospitals are losing patients to the neighboring hospitals since they have
more space. Along with this, they should focus on planning for the expansion of the emergency
room. In a hospital, most of the financial team consists of the hierarchy, but the financial team
also takes input from all the managers that are present at all levels when it comes to big
investments in the business (Campos and Reich, 2019).
How Financial Software Is Utilised Within the Anchor Trust
The main responsibility of the Anchor Trust is to provide for the health and welfare of the
patients along with educating the community to maintain a healthy living. Financial software
also known as medical billing software is defined as a system that helps in managing the revenue
cycle. The main purpose of the Sap ERP Core Finance accounting software in terms of the
Anchor Trust includes the automation of the numerous steps that are related to the billing process
which also includes scrubbing and standardisation along with relieving the clerical workload
from the shoulders of the healthcare staff (Malbon et al., 2019).
This core finance accounting software also focuses on streamlining the processes
through the collection of the necessary steps and binding it into one single interface that can also
help in making administrative operations more proficient and well organised. In Anchor Trusts,
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it also serves as the secondary net that is also used for noticing the errors that may prove to be
costly to the Anchor Trusts and to patients. It also proves to be beneficial in terms of managing
the multifaceted workflow related to claim processes and also with the insurance providers in the
Medicare/Medicaid programs (Schönborn et al., 2019). It also helps in automating the processes
related to the importing of the data, checking the accuracy, and also focusing on generating
reports that are based upon the data utilisation for the decision-makers. This system helps in
tracking and managing the information of the patient.
How Key Financial Ratios Are Used By Anchor Trust
The process used for tracking and analysing the financial ratios in the Anchor Trust is
considered to be a critical practice. These ratios help in identifying the operating costs since it
also helps in managing the cash flows and also provide a baseline for analysing profitability. In
terms of the debt ratio, it helps in examining the ability and long-term worth of the health care
organisation. This proportion is also deliberately important for stockholders and the risk analyst.
Several health care organisations have long-term debt heaps, and less accessibility of the money
and asset standards that are thus present in a perilous business exemplary (Finkler et al., 2022).
This ratio is also used by management to identify opportunities for new capital
investments, debt reduction, and strategic asset management that will help the organization
become more sustainable and increase its long-term profitability. Cash flow management is
another crucial ratio that is useful for operational success in the healthcare sector. Having a
lengthy billing implies receiving payment from several government and non-profit insurance
programs, as well as from Medicare, which has lengthy waiting periods (Hill et al., 2021). In
terms of making monthly payments, cash flow ratios are also crucial.
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Monitoring thorough operational ratios supports revenue modelling based on crucial
indications like typical occupancy rates and duration of stay. Although the variables that are
usually associated with treatments along with its processes are meant to be less expected, and
thus an organisation can nevertheless estimates the standard cost that is related to the fees of the
bed and essential assistances that are provided irrespective of illnesses, treatments, or operations.
On the other hand, the models for operational revenue, ratios related to the accounts receivable,
and distinctive payment times are used in order to control the cash flow against frequent
expenditures (McGilton et al., 2018).
Long-Term and Short-Term Financial Needs in Anchor Trust
The duration of the loan commitment is the primary contrast between long-term and
short-term financing (Yip et al., 2019). A loan term of less than a year is referred to as short-term
financing. On the other hand, any debt obligation with a loan length longer than a year falls
under the category of long-term finance. In accounting and taxation, the distinction matters.
Long-term financial spending decisions are more involved and scrutinised since they typically
include a big portion of a Health and Social Care organisation's spare cash and often take a long
time to yield a profit on the investment (Shahid et al., 2019).
In the short term, a break-even figure is a very minimum that an organisation is likely to
invest in. Stakeholders must evaluate the impact of their financial decisions on others. Budgetary
reports, financial accounts, audits, and reports must all be correct before financial decisions may
be made. Short-term financial decisions are frequently made out of necessity, such as having to
pay your present employer's wages and medications, amongst other things (Li et al., 2020).
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Benefits and Limitations of Various Sources of Finance Available for Anchor Trust
The main benefit of Anchor Trust is mostly related to the financing offers. The selling of
the healthcare finance is considered to be amongst the fastest ways that can be used to get full
access to a large amount of cash, and the money that will never be needed to be paid back
directly (Haldane et al., 2021). Many other internal sources of finances also help the Anchor
Trust in keeping the main control that is present within the company and thus it does not get into
the subject of the interest payments on loans. Moreover, some of the non-ownership capital is
also considered whilst voting for confidence from the investor or agency since most of the issues
are related to the loan or grant (Halcomb et al., 2020).
Grants are therefore considered to be cherished for Anchor Trust because they do not
require any repayment, and they might also be available regularly. There are also some sources
related to finance since they also have their limitations (McGilton et al., 2018). Ownership
capital also makes it responsible for the group of shareholders present at the Anchor Trust to
have fractional ownership rights. Loans cost interest, which also includes some of the lenders
that also demand back the schedule whether they turn on the profit or not. Hence, the internal
sources are also limited and if the assets are sold or the savings are spent, they will also need a
turn to create new sources related to the external finances (FORD et al., 2018).
Process of Budgetary Control and Revenue Management at Anchor Trust
Budgetary Control
According to the budgetary control, the Anchor Trust should focus on the following points that
can help them in managing the budget.
Step 1: Determining the Income
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Step 2: Determining the Expenses
Step 3: Choosing the appropriate budget plan
Step 4: Adjusting the Habits
Step 5: Making the plan live
Revenue Management Processes
In terms of the revenue management process, Anchor Trust should focus on the following points
that can help them in managing the process. These process includes:

In ordering management, they mostly focus on entering and processing orders.

In billing management, they should focus on creating and managing invoices.

In revenue recognition, they focus on accurate revenue reports.

In Rebate management, they focus on contracting the agreement between the
seller/partner and customers.
Rules of Double-Entry Book-Keeping and How It Is Used to Maintain Financial Records
Double-entry book keeping is defined as the transaction document that uses the debits
and credits in two or more accounts. In this method, one account is present at debit, whilst other
accounts are made present as credit. And thus, whole of the debits must be equal to the total
credits (equal each other) (Mackey et al., 2018).
Therefore, the double-entry bookkeeping system consist of three main parts. They are:

It is important that at least two accounts that are present in the books should record every
transaction or accounting entry of the business.

The overall reported debits and credits must be equal for each transaction.
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The total assets of Anchor trust should be equal to its overall liabilities and equalling the
equity (net worth or capital).
Conclusion
It has been concluded that financing and accounting are the basic functions for the
Anchor Trust since they have to manage the resources of the trust in order to make it running. It
helps in creating the understanding regarding the financial and accounting software and how they
can create ease for the Anchor.
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Task#2
Introduction
The main purpose of the assignment is to identify the organizational budget that is
allocated to the Anchor Trust. Moreover, how will these resources be utilised in order to enhance
the performance of each area present in the healthcare sector. The using of the financial appraisal
techniques that can be used in order to evaluate the capital expenditures along with the
investment projects.
Organisational Budgets in the Given Health and Social Care
It can be challenging to distinguish between healthcare and social care services for
Anchor Trust having long-term diseases and impairments, and these individuals should anticipate
that both systems will collaborate closely to address their needs and concerns (Schönborn et al.,
2019). Although they are completely distinct areas of government and there is less room for
confusion, welfare services, and housing are also strongly tied to caring for these types of clients.
Nevertheless, there is an increasing need for all of these services to be coordinated more
effectively to address the complicated healthcare requirements of specific user categories (the
Integrated Care and Connecting Care pilots are designed to test this comprehensive integration of
different services) (Campos and Reich, 2019).
A hospital or healthcare facility's budget is an estimation of its revenue and expenses for
a specific time period. Through the healthcare budgeting process, health systems evaluate how
much money has to be set aside for specific categories, such as operating expenses and capital
equipment. A health system can include hospitals, physician groups, skilled nursing facilities,
home care services, foundations, and a variety of other business kinds (Malbon et al., 2019).
During the budgeting process, leaders must consider crucial planning components for the
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healthcare industry, including volume growth estimates, feedback and input from key
stakeholders, and the ability to alter when inputs and conditions change. A well-planned budget
ultimately helps health systems to make appropriate strategies to provide high-quality care.
(Haldane et al., 2021).
The healthcare industry is undergoing tremendous development, and as new patient
needs, treatments, and technologies emerge, it must constantly adapt. With the aid of an effective
healthcare budgeting process, leaders may define objectives for the care and clinical departments
and plan for the future. A healthcare budget is an essential tool for figuring out how to allocate
financing across multiple departments and activities and make the most use of available
resources (Schönborn et al., 2019). As a result, healthcare facilities are able to treat patients
better and do it more swiftly and efficiently. As a result, the Anchor Trusts' budgeting aids in the
correct decision-making process for the health system and other organizations. (Shahid et al.,
2019).
Several different active budgeting processes allow Anchor Trusts to arrange the overall
plan whilst having financial planning targets. It is important to prioritise the capital investments
which also helps in aligning the strategic initiatives. Budgeting also helps in making effective
decisions related to the managing of the capital which is spent and also managing the cash flow
(Schönborn et al., 2019). Budgeting helps in giving a better allocation or distribution of the
funding to the individual projects, along with the initiatives and different clinical departments. It
also helps in diminishing the different purchasing errors.
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Evaluation of Capital Expenditures and Investment Projects Using Different Investment
Appraisal Techniques
Sometimes, the investment assessment method is also define as the investment planning
techniques. This technique helps the business in deciding whether the project should accept the
expected return in the long term or not. Capital budgeting techniques also help the companies to
choose the best projects whilst making the best choice between the projects when the projects
face a selection between two or more products (Schönborn et al., 2019). This technique includes
the payback period, internal rate of return, net present value, accounting rate of return, and
profitability index. These techniques are used to primarily evaluate the performance of the new
project.
“Payback Period”
The payback period is defined as the simplest appraisal technique in terms of investment.
This technique helps in defining how much time the project needs to generate ample cash flow
that can help in covering the initial cost of the project (Yip et al., 2019).
“Accounting Rate of Return Method”
It is defined as an accounting method that is used to extent the revenue that is anticipated
to be received from the principal amount invested. It also helps in expressing the overall net
accounting profit that usually arises from the investment whilst setting a precise percentage of
the capital investment. This method is also known as the return on investment or return on
capital (Boisjoly et al., 2021).
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“Discounted Cash Flow Techniques”
It is defined as the techniques that helps in calculating the existing value of the cash flows
that will be expected in the future. The following are some of the confidential that are present
under the discounted cash flow techniques:
Net present value (NPV)
Internal rate of return (IRR)
Profitability index (PI)
Discounted payback period (DPP)
Net Present Value
NPV is defined as the most popular method that is used for investment evaluation. It is
defined as the sum of reduced future cash incursions & depletions that usually relates to the
project. This technique helps in laying out the importance of the value of money along with the
techniques that are present with the objective of the company since it helps in maximising the
wealth of the shareholder’s. Moreover, the weighted average cost of capital (WACC) is also
defined as the disregarding factor that can be used for future cash flows in the net present value
method. Therefore, it is important for the company to approve the project if the NPV is positive
(Schönborn et al., 2019).
Internal Rate of Return (IRR) Method
It is defined as the disregarding rate, which helps in bringing the reduced future cash
flows which are present at balance with the initial investment. In short, it is also defined as the
discounting rate because of which most of the companies either make a loss or make a profit. It
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may also be known as the rate which yields on investment along with the bordering effectiveness
of capital (Finkler et al., 2022).
Profitability Index
The profitability index focuses on defining how the company will earn per dollar of
investment. The present value of the anticipated future cash flow is also divided by the initial
outflow which helps in giving the profitability index (PI) of the project. This method is also
considered one of the easiest techniques for investment appraisal (Shahid et al., 2019).
Recommendation
In order to make the financial resources of the Anchor Trusts strong along with making a
clear understanding that related to the financial system and processes that help in assisting the
Anchor, along with making the changes to the system and therefore, it will also help enhancing
the quality along with the effectiveness of the service (Shahid et al., 2019). It also helps in
explaining the monetary organisation which comprises of different inter-relationship, which is
present among different monetary foundations along with their process. Therefore, to improve
the financial management in the healthcare organizations, since it also helps in enhancing the
eminence of the health and social care, along with the imbursement, profit cap and also thus
helps in classifying the foreign companies and also focuses on accusing which is related to the
treatment (Haldane et al., 2021).
Impartiality and brilliance also liberate the NHS etc. Payment by results is also included
by the different governmental policies that help in transferring the risk along with the
responsibility from the different governmental policies to the healthcare providers (Hill et al.,
2021). It will also help the healthcare providers to improve the services that will help in attaining
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excellent value for the money. The PBR system will also help in ensuring that the services
provided should also meet the standards that are also required with the anticipated results, hence
the users will be getting the value for the money and thus will also help in satisfying the services.
Therefore, it will be important to train the staff whilst focusing on hiring a new employee to
diminish the charge and also preserve experienced and skilled staff (Yip et al., 2019).
Conclusion
It has been concluded that financial resources are considered as the most effectively used
method by most Anchor Trusts that can help in avoiding the financial shortfall and thus also
focuses on carrying out the informed decisions that are related to the Anchor Trusts since it will
also help in improving the healthcare service providers since it should also help in accompanying
the different proficient processes that help in managing the financial resources that can be used
to give the best services to the patients who are seriously ill. The commission is regulated by the
government to ensure the proper norms that can help in getting the proper qualities whilst
ensuring the services to the patients.
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Campos, P.A. and Reich, M.R., 2019. Political analysis for health policy implementation. Health
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Finkler, S.A., Calabrese, T.D. and Smith, D.L., 2022. Financial management for public, health,
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