UNIT-X FINANCIAL MANAGEMENT- planning, audit, .pptx

UNIT X – FINANCIAL MANAGEMENT

Subject: Nursing Management & Leadership
Semester: VI
Author: Mr. Pradeep Abothu, PhD Scholar, Dept. of Child Health Nursing, ASRAM College of Nursing

Inside the Unit:

Definition, Objectives, Elements, Functions, Principles & Scope of Financial Management

Financial planning (budgeting for nursing department)

Proposal for staff, equipment, and supplies for hospital, patient care, and emergency/disaster units

Financial audit

Introduction

Financial management ensures proper planning, organizing, and controlling of financial resources in healthcare institutions. It promotes cost containment, efficient fund use, and better organizational performance to enhance service delivery.

Definitions

Planning, organizing, directing, and controlling financial activities for organizational goals.

Application of general management principles to financial resources – Howard & Upton

Raising and utilizing financial resources effectively – S.N. Maheshwari

Objectives of Financial Management

Ensure adequate funds for smooth functioning

Optimal utilization of resources

Maintain financial stability

Maximize profitability

Support organizational goals

Elements of Financial Management

Cash Flow Management: Track inflow/outflow to meet salaries, purchases, and operations.

Risk Management: Identify and minimize potential financial losses.

Debt Management: Plan and control borrowed funds responsibly.

Asset Management: Maintain and utilize assets efficiently.

Functions of Financial Management

Financial planning

Acquisition of funds

Investment of funds

Financial control (budgets, audits, statements)

Profit maximization

Ensuring liquidity

Risk management

Principles of Financial Management

Consistency, Accountability, Transparency, Viability

Risk-Return Balance, Simplicity, Control, Flexibility

Economy, Future Orientation

Scope of Financial Management

Investment decisions: Allocation for maximum returns

Working capital: Day-to-day cash, inventory, receivables

Dividend decisions: Profits reinvestment or distribution

Liquidity assurance

Profit management

Financing decisions: Loans, donations, grants, retained earnings

Financial Planning (Budgeting for Nursing Department)

Purpose:

Efficient resource utilization

Adequate staff, supplies, and equipment

Planning & control of activities

Reduce wastage

Promote accountability

Steps in Budgeting:

Assess needs (staff, equipment, supplies)

Forecast costs (salaries, training, consumables, maintenance)

Prepare budget proposal (fixed & variable costs)

Approval by administration/finance

Implementation and communication to staff

Monitoring & evaluation (compare actual vs planned expenses)

Factors Affecting Budget:

Patient census & acuity

Staffing & salaries

Cost of supplies/equipment

Hospital policies & financial constraints

Government regulations

Emergencies/pandemics

Role of Nurse:

Participate in budgeting & proposals

Maintain supply/staff records

Moni

1. FINANCIAL MANAGEMENT Mr. Pradeep Abothu, PhD Scholar, Dept. of Child Health Nursing ASRAM College of Nursing

2. Table of contents Definition, Objectives, Elements, Functions, Principles & Scope of Financial Management Financial planning (budgeting for nursing department) Proposal, projecting requirement for staff, equipment and supplies for – Hospital & patient care units & emergency and disaster units Financial audit

3. INTRODUCTION Financial management plays a vital role in healthcare institutions as it ensures proper planning, organizing, and controlling of financial resources. It focuses on cost containment, efficient use of funds, and improving organizational performance for better service delivery.

4. DEFINITIONS Financial management is the process of planning, organizing, directing, and controlling financial activities such as procurement and utilization of funds for achieving organizational goals. “Financial management is the application of general management principles to the financial resources of the enterprise.” - Howard and Upton “Financial management is concerned with raising financial resources and their effective utilization towards achieving the organizational goals.” - Dr. S. N. Maheshwari

5. OBJECTIVES Ensure Adequate Funds: To make sure sufficient funds are available for smooth functioning and to meet both short-term and long-term requirements. Ensure Proper Utilization: To use financial resources optimally, avoiding waste and ensuring funds are used where they generate the most value. Maintain Financial Stability: To keep a healthy balance between income and expenditure, avoiding deficits and ensuring sustainability.

6. Maximize Profitability: To plan and control expenses in a way that maximizes revenue and improves organizational financial performance. Support Organizational Goals: To align financial planning with institutional mission, vision, and objectives, ensuring resources help achieve quality care and development.

7. ELEMENTS OF FINANCIAL MANAGEMENT Elements of financial management are the key components that help an organization plan, organize, and control its financial activities. Cash flow, risk, debt, and asset management are considered elements (or key components) of financial management. 1. Cash Flow Management: Cash flow management refers to tracking the inflow and outflow of funds within an organization. In hospitals, it ensures that sufficient cash is available to pay salaries, purchase medicines, and meet operational expenses without interruption. 2. Risk Management: Risk management involves identifying and minimizing potential financial losses. In healthcare, this includes planning for sudden rise in treatment costs, equipment breakdowns, or government policy changes that may affect hospital revenue and expenditure.

8. E L E M E N T S

9. 3. Debt Management: Debt management is the process of controlling and planning the use of borrowed funds. It ensures that loans are used for productive purposes, repayments are timely, and interest burden does not harm the hospital’s financial stability. 4. Asset Management: Asset management involves maintaining, upgrading, and efficiently using physical and financial assets like hospital buildings, equipment, and vehicles. Proper asset management maximizes their life span, avoids unnecessary replacement costs, and supports smooth hospital operations.

10. FUNCTIONS OF FINANCIAL MANAGEMENT The functions of financial management help hospitals ensure efficient fund use, maintain stability, support services, and achieve sustainable growth. 1. Financial Planning: Ensures that an organization estimates its future financial needs in advance. It involves preparing strategies to meet short-term and long-term financial requirements efficiently. 2. Acquisition of Funds: Focuses on raising adequate funds from different sources such as equity, loans, grants, or retained earnings. The aim is to secure funds at the lowest possible cost with minimal risk. 3. Investment of Funds: Allocates available funds into profitable avenues. It ensures that money is invested in safe, liquid, and productive projects that maximize returns while maintaining financial stability.

11. 4. Financial Control: Monitors and evaluates financial activities through techniques like budgets, audits, and financial statements. This helps in avoiding wastage, ensuring accountability, and guiding corrective actions. 5. Profit Maximization: Seeks to achieve the highest possible returns for the organization by balancing risk and reward. Profits provide sustainability and help in future expansion. 6. Ensuring Liquidity: Maintains an adequate balance between inflow and outflow of funds so the organization can meet its day-to-day obligations such as salaries, bills, and supplies. 7. Risk Management: Identifies and manages financial risks like inflation, credit risk, and currency fluctuations. Preventive measures ensure financial stability and safeguard resources.

12. PRINCIPLES OF FINANCIAL MANAGEMENT Principle of Consistency – Financial rules, methods, and procedures should remain uniform over time. This ensures accuracy, comparability, and reliability when analyzing hospital accounts or planning long-term financial strategies. Principle of Accountability – Every manager or department handling money should be answerable for its use. This builds responsibility, prevents misuse of funds, and increases trust among staff and stakeholders. Principle of Transparency – Financial statements and reports should be clear and open. Transparency helps stakeholders, administrators, and auditors easily understand the financial condition of the hospital.

13. Principle of Viability – Financial decisions must focus on long-term survival. Hospitals should avoid unnecessary risks or over-spending, ensuring that income can support expenses consistently over time. Principle of Risk-Return Balance – Every investment carries risk, but it should be balanced with possible returns. In hospitals, funds must be invested wisely to secure safe yet beneficial outcomes. Principle of Simplicity – Financial systems should be simple and easy to understand. Complicated methods may confuse staff, whereas a clear budget system supports smooth hospital management.

14. Principle of Control – Regular monitoring and evaluation of financial activities is necessary. Control mechanisms help detect errors, prevent fraud, and ensure money is spent as planned. Principle of Flexibility – Financial plans should be adjustable to unexpected situations, such as emergencies, disasters, or sudden patient demand, without disturbing overall financial stability. Principle of Economy – Resources should be used wisely to reduce waste and increase efficiency. Hospitals must ensure that every rupee spent provides maximum service benefits. Principle of Future Orientation – Financial planning should not only solve current needs but also prepare for future growth. Hospitals must plan for expansion, new technology, and upcoming demands.

15. SCOPE OF FINANCIAL MANAGEMENT The scope of financial management refers to the wide range of activities involved in planning, organizing, controlling, and monitoring financial resources. In hospitals, it ensures funds are properly allocated for patient care, staff salaries, medical equipment, and emergency needs. Investment Decision: This involves deciding where to allocate funds for maximum returns. In hospitals, this may include investing in advanced medical equipment, infrastructure, or new services that improve efficiency and generate income. Working Capital Decision: It refers to managing day-to-day financial needs like cash, inventory, and receivables. In hospitals, this ensures smooth operations such as paying staff salaries, purchasing drugs, and maintaining supplies.

16. Dividend Decision: This concerns how profits are distributed. In healthcare organizations, decisions may involve reinvesting earnings into hospital development or distributing profits to stakeholders depending on the institution’s policy. Assures Liquidity: Liquidity means having enough cash or assets to meet immediate expenses. Hospitals must always ensure they can pay for emergency needs, unexpected patient surges, or sudden equipment repairs. Profit Management: Profitability is essential for sustainability. Hospitals need to balance costs and revenue by minimizing waste, improving efficiency, and charging reasonable fees while ensuring quality services. Financing Decision: This involves deciding the source of funds—whether from loans, donations, government grants, or retained earnings. Hospitals must choose financing methods that minimize costs and risks while supporting growth.

17. FINANCIAL PLANNING (BUDGETING FOR NURSING DEPARTMENT) Financial planning in the nursing department involves estimating, allocating, and controlling resources to ensure smooth functioning of patient care services. Since nursing accounts for the majority of hospital expenditures (staff salaries, supplies, and equipment), effective budgeting is essential for balancing cost control with quality care.

18. Purposes of Budgeting in Nursing Department To ensure efficient utilization of available financial resources. To provide adequate staff, supplies, and equipment for safe patient care. To act as a guideline for planning and controlling departmental activities. To reduce wastage and prevent unnecessary expenditures. To evaluate financial performance and promote accountability among staff.

19. Steps in Budgeting for Nursing Department Assessment of Needs – Estimate staffing, equipment, and supply requirements based on patient load and acuity. Forecasting Costs – Predict expenses for salaries, training, drugs, disposables, and maintenance. Preparation of Budget Proposal – Draft a detailed budget plan including fixed and variable costs. Approval – Submit to hospital administration/finance for review and sanction. Implementation – Allocate resources and communicate plans to staff. Monitoring and Evaluation – Compare actual expenses with planned budget; analyze variances and make corrections.

20. Factors Affecting Nursing Department Budget Patient census and acuity levels. Staffing needs and salary scales. Cost of medical supplies and equipment. Hospital policies and financial constraints. Government regulations and reimbursement systems. Unexpected events (e.g., pandemics, emergencies).

21. Role of Nurse in Financial Planning Participate in estimating departmental needs and preparing budget proposals. Maintain records of supply usage and staffing hours. Ensure cost-effective utilization of resources without compromising care quality. Monitor variances and report deviations to administration. Educate and involve nursing staff in cost-containment practices. Act as a link between finance and clinical teams to balance quality and cost.

22. PROPOSAL FOR PROJECTING REQUIREMENT FOR STAFF, EQUIPMENT AND SUPPLIES Proper planning of staff, equipment, and supplies is essential to ensure quality healthcare delivery. A proposal for requirement projection enables administrators to allocate resources efficiently, avoid shortages, and maintain readiness in routine and emergency situations.

23. Hospital (Overall Level) Staff : Based on INC and NABH guidelines , nurse–patient ratio is usually 1:6 in general wards , 1:1 in ICU , and 1:4 in high-dependency areas . Adequate administrative, technical, and housekeeping staff are also projected. Equipment : Hospital-wide requirements include diagnostic machines (X-ray, ultrasound), central oxygen supply, ventilators, biomedical waste management units, and IT systems for records. Supplies : Procurement plans include drugs, IV fluids, linen, cleaning agents, and infection-control kits in bulk for uninterrupted services.

24. Patient Care Units Staff : Each unit plans according to its specialty. Example: Pediatrics may need more nurses due to intensive care requirements, while surgical wards need skilled perioperative nurses. Equipment : Beds with side rails, infusion pumps, suction apparatus, BP apparatus, and monitors are essential. WHO recommends at least one functional BP apparatus per 10 beds . Supplies : Daily consumables like dressings, syringes, catheters, PPE, and patient diet supplies are budgeted according to census and bed occupancy.

25. Emergency and Disaster Units Staff : Requires extra trained staff for mass casualty incidents. As per WHO’s disaster preparedness, a reserve pool of nurses and doctors should be identified . Equipment : Portable ventilators, defibrillators, triage tags, field tents, and oxygen cylinders are essential. Supplies : Large stocks of IV fluids, blood products, first-aid kits, PPE, and burn kits are maintained. NABH standards recommend periodic mock drills to assess supply adequacy.

26. Conclusion: Projecting requirements in hospitals ensures quality, safety, and preparedness . By aligning staffing, equipment, and supplies with national standards (INC/NABH) and global recommendations (WHO) , hospitals can maintain efficient patient care in routine and emergency situations.

27. FINANCIAL AUDIT A financial audit is the process of systematically reviewing and verifying an organization’s financial records to ensure accuracy, transparency, and compliance. In hospitals, it helps track proper utilization of funds for patient care, equipment, and staff salaries.

28. “A financial audit is an independent examination of financial information to express an opinion on whether the financial statements are prepared in accordance with the applicable financial reporting framework.”- IAASB “A financial audit is an official inspection of an organization’s financial accounts, typically by an independent body.” - Oxford DEFINITIONS

29. PURPOSES OF FINANCIAL AUDIT To ensure proper use of hospital funds and resources. To maintain accuracy and reliability of financial statements. To prevent fraud, misuse, and errors. To ensure compliance with government rules and healthcare policies. To improve financial accountability and transparency in the hospital system.

30. Internal Audit – Conducted by the hospital’s internal team to check routine financial activities. External Audit – Conducted by an outside agency for independent evaluation. Statutory Audit – Mandatory audit as per legal requirements (e.g., government hospitals). Operational Audit – Examines efficiency of operations, not just accounts. Forensic Audit – Done when financial fraud or misuse is suspected. TYPES OF FINANCIAL AUDIT

31. PROCESS OF FINANCIAL AUDIT Planning and Preparation: Define the audit objectives, scope, timeline, and methods. Review previous reports and prepare necessary audit tools. Risk Assessment: Identify high-risk areas prone to errors, fraud, or non-compliance, such as payroll, purchases, or patient billing. Collection of Evidence: Gather and examine financial records, statements, invoices, vouchers, receipts, and bank documents to support audit findings.

32. Testing and Verification: Reconcile accounts, verify transactions, check authorizations, and ensure compliance with accounting standards and hospital policies. Analysis and Evaluation: Compare budgets with actual expenses, detect discrepancies, assess internal controls, and identify inefficiencies or financial mismanagement. Reporting: Prepare a detailed audit report highlighting findings, errors, discrepancies, and recommendations for improving financial management. Follow-Up: Ensure recommended corrective actions are implemented and monitor improvements for future compliance and efficiency.

33. BENEFITS OF FINANCIAL AUDIT Enhances accountability and trust. Improves efficiency in fund utilization. Identifies and prevents financial errors and fraud. Helps in better budgeting and planning. Provides credibility to hospital management for stakeholders.

34. ROLE OF NURSE IN FINANCIAL AUDIT Maintaining accurate patient care and supply records. Reporting proper usage of drugs, equipment, and consumables. Assisting in cost tracking of nursing procedures and interventions. Supporting transparency by providing documentation for audits. Ensuring resources are not wasted and used effectively for patient care.

35. Introduction 01

36. Our idea Introduction The “our idea” part of a pitch deck should include an explanation of your product/service, how it works, and what the customer value is. You should also explain the market opportunity for your product/service The introduction of your company in the pitch deck should include a brief overview of who you are and what you do. It should also include a brief description of why your product or service is unique and the value it provides to customers Our company

37. Main ideas of a pitch deck Presentation Investors A great presentation for a pitch deck should be concise, clear and easy to understand. Visual elements such as charts, graphs, images, and videos can help to make the presentation engaging When it comes to picking investors for a pitch deck, it's important to research potential investors and understand their preferences, goals and interests The value of a product is determined by how much customers are willing to pay for it. It's a combination of factors, including the quality of the product, its features, and how well it meets customer needs Value

38. Stay ahead of trends Key ideas in market opportunity Analyze existing customer needs and identify gaps in the market to find new opportunities Utilize technology and customer feedback to come up with novel solutions that meet your customer’s demands or needs Monitor changes in the marketplace, such as shifts in consumer behavior or emerging technologies, to stay competitive and capitalize on new opportunities and trends Identify times of year when demand for certain products may spike, such as holidays or special occasions, and use these times to target customers or maximize sales Research new markets Innovative solutions Seasonal spikes

39. Six recommendations Structure your pitch deck clearly and make sure all the important points are easy to understand Incorporate visuals or graphics to illustrate your message and keep the audience engaged Include impactful stories, statistics, or facts that will help your audience remember your message afterwards Practice presenting your deck beforehand with friends or colleagues for feedback, then use this input to refine it further Keep it simple Use visuals Keep it short A good pitch deck should be concise and clear; avoid trying to cram in too much information A pitch deck is an overview of your business; focus on key points that get the most important ideas across Make it memorable Test & iterate Main points

40. Estimated delivery time per unit 9h 55m 23s 333,000 Users bought our product 386,000 km Avg. distance travelled by logistics team

41. 4,498,300,000 Number of users analyzed in our market research

42. Revenue by quarter Q4 October - December Q3 July - September Q2 April - June Q1 January - March Follow the link in the graph to modify its data and then paste the new one here. For more info, click here

43. Competition comparison Features Value Pricing Trial Competence Share Company A Fuel economy Special offers $23,000 No Low 8% Company B Design Reliability $27,000 No Low 5% Company C Performance Repairs $30,000 Yes High 20% Company D Safety features Marketing $24,000 No High 22% Company E Technology Customers $32,000 Yes Low 10% Company F Comfort Best prices $15,000 Yes High 30% Company G Customization Brand name $45,000 No Low 5%

44. Product infographic Visuals Price Availability Features Users Updates Showcase the design of your product Share the cost and price with investors When is the product expected to be ready? What makes you product unique? Speak about the target audience Do you plan on updating it?

45. Timeline of your presentation Provide a brief overview of the pitch deck's content Engage the audience with a compelling introduction Identify the customer's pain points and challenges Describe how your product or service can solve the problem Highlight the unique value proposition and benefits of your specific solution Analyze the target market size, growth potential, and competition briefly Explain your financial needs and briefly outline your funding allocation End with a clear and concise call to action

46. Organizational chart John Doe CEO Jane Smith Department Head Mark Willson Department Head Steven Ander Manager Sarah Williams Manager Richard Taylor Manager Emma Miller Manager William Young Employee James Scott Employee Michelle García Employee Brian Clark Employee Alan Turner Employee

47. Market size overview $100M $20M $5M Outer circle Include the total size of the market, which represents the entire potential customer base for the product or service Middle circle Identify the target market for the product or service, which may be a subset of the total market. This could be based on factors such as demographics, geography, or specific needs Inner circle Indicate the current market size, which represents the portion of the target market that the company has successfully captured

48. Roadmap infographic Initiative Objective Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Understanding Analyze and understand the needs of your target audience Conduct research Research existing products in the industry and analyze how successful they are Brainstorm ideas Generate ideas based on user feedback and research findings Develop a prototype Create a basic version of the product to show investors Test for usability Put the prototype through rigorous testing processes to ensure that it meets user requirements Analyze feedback Understand the opinion of the users who tried your product

49. KPI dashboard Product Units Revenue Returns Item 1 500 2,000,000 40 Item 2 1,000 50,750 10 Item 3 250 1,500,000 300 Item 4 500 2,000,000 40 Item 5 1,000 50,750 10 Item 6 250 1,500,000 300 Item 7 500 2,000,000 40 Item 8 1,000 50,750 10 $4,000,000 $100,000 $5,000 Revenue General costs Profit Follow the link in the graph to modify its data and then paste the new one here. For more info, click here

50. Thanks! Do you have any questions? [email protected] [phone] yourwebsite.com Please keep this slide for attribution

51. Icon pack

52. Alternative resources Here’s an assortment of alternative resources whose style fits that of this template: Vectors Gradient geometric background

53. Resources Did you like the resources in this template? Get them at our other websites: Vectors Business landing page template Photos Representations of user experience and interface design Icons Icon Pack: Finances | Filled

54. Instructions for use If you have a free account, in order to use this template, you must credit Slidesgo by keeping the Thanks slide. Please refer to the next slide to read the instructions for premium users. As a Free user, you are allowed to: Modify this template. Use it for both personal and commercial projects. You are not allowed to: Sublicense, sell or rent any of Slidesgo Content (or a modified version of Slidesgo Content). Distribute Slidesgo Content unless it has been expressly authorized by Slidesgo. Include Slidesgo Content in an online or offline database or file. Offer Slidesgo templates (or modified versions of Slidesgo templates) for download. Acquire the copyright of Slidesgo Content. For more information about editing slides, please read our FAQs or visit our blog: https://slidesgo.com/faqs and https://slidesgo.com/slidesgo-school

55. As a Premium user, you can use this template without attributing Slidesgo or keeping the " Thanks " slide. You are allowed to: Modify this template. Use it for both personal and commercial purposes. Hide or delete the “Thanks” slide and the mention to Slidesgo in the credits. Share this template in an editable format with people who are not part of your team. You are not allowed to: Sublicense, sell or rent this Slidesgo Template (or a modified version of this Slidesgo Template). Distribute this Slidesgo Template (or a modified version of this Slidesgo Template) or include it in a database or in any other product or service that offers downloadable images, icons or presentations that may be subject to distribution or resale. Use any of the elements that are part of this Slidesgo Template in an isolated and separated way from this Template. Register any of the elements that are part of this template as a trademark or logo, or register it as a work in an intellectual property registry or similar. For more information about editing slides, please read our FAQs or visit our blog: https://slidesgo.com/faqs and https://slidesgo.com/slidesgo-school Instructions for use (premium users)

56. This presentation has been made using the following fonts: Poppins ( https://fonts.google.com/specimen/Poppins ) Albert Sans ( https://fonts.google.com/specimen/Albert+Sans ) #1e255f #ffffff #6b34c0 #cd5afd #fd22ad #23a9d7 #80d8b7 #fecd31 #ff7d51 Fonts & colors used

57. Create your Story with our illustrated concepts. Choose the style you like the most, edit its colors, pick the background and layers you want to show and bring them to life with the animator panel! It will boost your presentation. Check out h ow it works . Storyset Pana Amico Bro Rafiki Cuate

58. You can easily resize these resources without losing quality. To change the color , just ungroup the resource and click on the object you want to change. Then, click on the paint bucket and select the color you want. Group the resource again when you’re done. You can also look for more infographics on Slidesgo. Use our editable graphic resources...

59. JANUARY FEBRUARY MARCH APRIL MAY JUNE PHASE 1 PHASE 2 Task 1 Task 2 Task 1 Task 2 JANUARY FEBRUARY MARCH APRIL PHASE 1 Task 1 Task 2

60. You can resize these icons without losing quality. You can change the stroke and fill color ; just select the icon and click on the paint bucket/pen . In Google Slides, you can also use Flaticon’s extension , allowing you to customize and add even more icons. ...and our sets of editable icons

61. Educational Icons Medical Icons

62. Business Icons Teamwork Icons

63. Help & Support Icons Avatar Icons

64. Creative Process Icons Performing Arts Icons

65. Nature Icons

66. SEO & Marketing Icons