Financial Management

Tanyanika McMillian

South University

Financial management

Financial management refers to the process through which organizations come up with those techniques and methods that enable them to manage their financial resources (Paramasivan, & Subramanian, 2009). It is the process through which firms make sure that they identify those ways and strategies that will make it possible for them to effectively allocate their resources to the different departments that exist. It is, therefore, the responsibility of the company through the management team to make sure that they work towards making sure that the company achieves efficiency and effectiveness. The hospital has an average of 150 employees who are affected by the financial issue.

The selected organization is a hospital that exists in the health industry. The main function of the hospital is to provide care and services to the patients to maintain a healthy society. The financial issue that was looked into is the negative impacts of the budget due to unskilled nurses, lack of information, and understaffing. Budgets refer to the form of planning that enables organizations to manage and control the available financial resources to make sure that the hospital achieves quality care and a healthy society (Stanton, & Rutherford, 2004).

Role of the interviewees

The interview was conducted to the Chief Finance Officer and the accountant who are in a better position to explain more about financial management. The roles of the two are to make sure that they identify the available funds and discuss how to allocate the funds to the different departments that exist. Also, they are believed to set up the budgets for the organization enabling them to continuously view and follow up the organizational financial performance.

How long has the organization tried to address this issue?

It has been identified that the organization has been facing this problem for a period of five years according to the Chief Finance Officer. The hospital has not been in a position to come up with the best means and methods that will help eliminate the issue to be in a position to gain success. The problem has continued to exist because of the lack of skilled and experienced personnel with the ability to closely monitor and control the use of funds.

What measures have been taken to address this issue in the past?

Some of the measures that have been put in place include searching the skilled and experienced personnel who will assist in the management of the funds. Also, the Chief Finance Officer and accountant have been working together to make sure that they recruit a supervisor for the finance department whose responsibility will be to oversee the day to day activities of the hospital. The third measure has been to create training and development programs to train the employees on how to use the budget towards the management of the funds. Also, the Chief Finance Officer has directed the employees on providing weekly reports based on how they use the funds allocated to them.

What future steps have been planned to address this issue?

The company intends to always make sure that they involve some of the employees as they prepare the budgets so as to make sure they come up with the best budgets. Also, the organization plans to install an accounting system that will be in a position to control all the funds and make sure that all details are kept up to date enabling them to manage the funds easily. Also, the organization intends to employ more finance officers so as to make sure that they help one another towards the achievement of the goals and objectives. Also, the organization aims at identifying more sources of funds that will be in a position to fund all the activities.

What problems does the organization foresee as blocks to addressing this issue?

However, it is clear that problems and difficulties are part and parcel of our lives. It is difficult to operate effectively without having some problems at some points. Therefore, some of the problems that exist are that it may be difficult to identify the most skilled and experienced individuals from the society. Another block is that the hospital might not be in a position to fund all the additional steps such recruiting more employees due to poor employee retention. Therefore, the firm may face the problem of inadequate financial resources (Berger, 2008).

Also, another foreseen block is the issue of advanced technology that requires the accounting system to be continually updated to meet the present requirements. Also, there are occasions where the organization may employee individuals that maybe from a different culture from that of the firm, which has a potential for friction with employees. Therefore, it will be difficult to make it possible for the employees to accept and appreciate the organizational culture. Also, there could exist issues of interpersonal conflicts that may prevent the achievement of the goals.

How did your perception of the financial issue differ from the perception of those who are actually working on finances in the organization?

My perception of the impact of the budget was differently because I have always believed that budgets are the reasons why organizations excel. I believe that as long as an organization has a budget it will always continue to excel. However, it was differently from the Chief Finance Officer and accountant’s argument who made it clear that health centers have to put more efforts towards the effectiveness of the budget (Aiken, Clarke, Sloane, Lake, & Cheney, 2008). They explained that a budget acts as a direction which requires firms to closely monitor and control the organizations’ activities for the budget to be successful.

References

Aiken, L. H., Clarke, S. P., Sloane, D. M., Lake, E. T., & Cheney, T. (2008). Effects of hospital care environment on patient mortality and nurse outcomes. The Journal of nursing administration, 38(5), 223.

Berger, S. (2008). Fundamentals of health care financial management : a practical guide to fiscal issues and activities. San Francisco: Jossey-Bass.

Paramasivan, C. & Subramanian, T. (2009). Financial management. New Delhi: New Age International (P) Ltd., Publishers.

Stanton, M. W., & Rutherford, M. K. (2004). Hospital nurse staffing and quality of care. Rockville: Agency for Healthcare Research and Quality.