Financial Management of Health Care Organizations

Topics: Finance, Management, Ethics Pages: 5 (1316 words) Published: August 27, 2012

Financial management of health care organizations

Healthcare managers participate in various important roles that allow them to form and maintain flourishing organizations. Managers ought to be aware of the decisive elements of management and the generally accepted accounting principles. At the same time, they must realize, stick to, and put into effect the general financial ethical standards. Successful management of finances of healthcare is one of countless tests that mug the organization. Revenues and expenses of the organization are essential because they establish the external and internal finances of the company. The indispensable skills needed to administer the finances of the health care organization are to plan, budget and handle the revenue sets. When doing this, the elements that need to be considered are planning, controlling, organizing and directing, and decision making. Generally accepted accounting principles and financial ethical standards Accounting professionals must tolerate the ethical standards that regulate the kind of business they conduct, who they serve, and how they use their skills. The generally accepted accounting principles and financial ethical standards are: Going concern

The principle of going concern specifies that the business unit will maintain its regular operations and will not finish its business maneuvers (Agtarap-San, 2011, p. 6). Conservatism
The principle of conservatism offers that if there is a preference amongst a number of options, the accountant has to choose the one that will lead to the less positive outcome on the consequences of actions and financial settings (Agtarap-San, 2011, p. 6).

Competence is considered the key ethical principles that finance professional have to support. To be competent, financial professionals and accountant must carry on their education by learning latest information that can have an effect on their performance. Separate business entity

The principle of separate business entity affirms that the business entity has a persona separate and discrete from its owners (Agtarap-San, 2011, p. 7). Consistency
The principle of consistency affirms that accounting principles, methods, rules, and procedures have to be applied in the similar way every year so that it can improve the comparability and uphold the reliability of the financial statements (Agtarap-San, 2011, p. 7). Full disclosure

The principle of full disclosure presents that any accounting information and other pertinent information have to be recognized and clarified in the financial statements so that it can provide enhanced information thus not be confusing to the users of the information (Agtarap-San, 2011, p. 7). Materiality

From the principle of materiality, businesses are compelled to unveil in their financial statements significant information that might impinge on the verdict of a rationally well-versed person in making an assessment that may be subjective by understanding the material information (Agtarap-San, 2011, p. 8).

Matching of costs and revenues
The principle of matching of costs and revenues provides that revenues have to be documented in the identical accounting phase as expenses, costs or expenditures are spent (Agtarap-San, 2011, p. 8). Monetary measurement

The principle of monetary measurement means that money is the suitable unit of measure used in recording financial transactions and reporting financial statements (Agtarap-San, 2011, p. 8). Objectivity

The principle of objectivity provides that financial information replicated in the accounting records and in the financial statements is evenhanded and demonstrable by purpose and reasonable corroboration of documentary verification (Agtarap-San, 2011, p. 8). Realization

The realization principle identifies that changes in assets, liabilities, revenues, costs,...
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