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There are generally accepted principles and ethical codes that must be followed when dealing with finances, and healthcare facilities must be successful in this aspect for the facility to operate smoothly. This paper will discuss the four elements of financial management, some generally accepted principles and ethical standards, and provide examples of when these principles are used.
Four elements of financial management There are four major elements that can be discussed when dealing with the Issue of financial management In the healthcare profession, the first of which Is planning. In the world of healthcare technology Is an ever changing aspect; therefore, It Is necessary for organizations to make planning a priority. There are always going to be new and better ways to provide patient care, so management must be concerned with providing that care by financially planning for technology and equipment upgrades.
The second element of financial management is controlling, which is basically the follow through within the departments of the planning process. It is necessary for managers to take the time to make sure staff and department managers are up to date with changes and are properly implementing those changes. One way of doing this would be to compare previous and current reports to find the areas of the organization that are not being effective (Baker & Baker, 2011 The third element Is organizing and directing.
This Is an Important aspect of uncial management because it Is necessary for a manager to effectively use the resources wealth the organization to Insure that the planning process Is being followed through with (Baker & Baker, 2011). By providing the supervision necessary, cay to clay operations can run smoothly Ana walkout any situations Tanat could cost the facility large amounts of money. The fourth and final element is decision making, which could be looked at as the most critical element for a financial manager.
During the planning process, many efferent options can be proposed, and it is the financial manger’s decision of which path to take after analyzing and evaluating all of the research. This can be a very difficult task when it comes to making big decisions that could affect the entire facility; therefore, it is important to incorporate all of the other elements as well to make the decision making process clearer. Principles In recent years both the Financial Accounting Standards Board and the US Securities Exchange Commission have produced papers on the desirability of reminisces-based accounting standards (Lillian, 2012).
There are many different standards that can be used in the financial process, including consistency and materiality. Consistency is a term used to describe the way a facility compares time periods to insure a constant history within the organization. This will allow a better projection of future financial standards. Materiality refers to the accuracy of the financial reports being researched. It is extremely important for managers to be as accurate in reporting as possible to decrease the possibility for future mistakes.
According to Lillian, 2012, in principles-based systems litigation plaintiffs will have a more difficult time proving their case, because they would have to prove both falsehood and concurrent knowledge, which is a difficult task. This is important due to the fact that healthcare litigation is a growing problem, whether legitimate or not; therefore facilities need to insure that they are making every attempt to avoid litigation. Another, difficult task in financial management, according to Carling & Paper, 1999, is the use of outside companies.
In certain instances, when outside financial groups re used, all of the information may not be relayed effectively causing difficulty in future planning. It is important for financial managers to be knowledgeable on the numbers being presented by outside companies to insure the most accurate assessment possible. Conclusion The healthcare financial manager has the very specific and difficult task of keeping the facility running smoothly day to day and also planning for the financial future of the facility. This is the reason that principles and standards are created to help provide guidelines.
By following the elements of financial management and the nearly accepted principles, the tasks at hand can become less cumbersome.