Health Care Financial Accounting Essay

Financial solicitude is a very severe process across the commerce system of ruless. The increasing competition, complexness of business, rising expectations of investors etc arse lure any organization to use un good financial counselling tactics to build their books look snap off. But this can be super chaotic In future. Health bursting charge organizations ar especially prone to such practices because of the fundamental financial pressure and critical nature of business operations.The employment of this paper is to discuss the different aspects of the financial watchfulness, customaryly accepted account statement principles and the suggested good practices in this regard. Financial centering is not merely a record of debits and credits. It is a measure of the health of an organization. The four elements of financial management consist of planning, control, organizing and directing, determination making. The business operations essential be plotted and the manage ment must be puff up aw ar of all the business aspects. The management needs to note a systematic process to make ethical decisions in sync with the goals of the organization.It must be ensured that sufficient caudex is available to perform business operations in time. The management must have the control of business operations and thus the financial activities. The management needs to ensure that each part of the organization is adhering to the goals established for it. The management needs to decide how effectively the resources can be used to turn over the goals. This helps in maintaining the financial health of the organization. There is always a speculation of a financial situation in an organization when a difficult decision is to be taken.Such circumstances require prompt decision making capability along with the understanding of the consequences of the decisions. In addition to the complexity of financial management, there be general accepted invoice principles. The g eneral accepted business relationship principles also referred to as (GAAP). Generally Accepted report Principles be not any written rules. They are just the recommended accounting practices to maintain accurate, circus and consistent financial reporting. Financial Accounting Standards come on (FASB) and International Accounting Standards Board (IASB) have worked together to come appear with GAAP.They revise the recommendations as and when required (Investopedia, n. d). Though every nation is drop off to adhere to any accounting system that GAAP is internationally followed to allow the interaction of organizations and their financial reports at international level. Ethics in financial management is very essential in all types of organization but it is even more important in health care organizations. A primary reason is that patients and their families are vulnerable to unethical practices. They deserve honesty in the financial aspects. The boards, executives, clinicians and the staff are equally creditworthy in this process.Another reason is that the health care organizations bear extreme financial pressure and it becomes very difficult for the finance department to prompt a balance between the facilities and expenses. If the financial health of the organization declines, it sets up a negative spiral of loss of business. There have been some(prenominal) incidents of unethical financial management practices because of the increasing complexity of business operations. Therefore, some(prenominal) standards of ethical practice and conduct are suggested to avoid any cheating(prenominal) and dishonest incident.There are several financial circumstances that repugn the management to take right decision in a prompt manner. There may be quick unethical measures available that may settle the problem temporarily. But the management must not follow such measures as they may prove chaotic in longer run. They must take the ethical financial decisions. In a 2004 discussion articles that discusses compromising situation.. This articles states, The financial pressures experienced by most healthcare organizations are intense. Not surprisingly, financial statements receive frequent and persistent scrutiny.Declining financial transaction makes the organization and its management team look bad. If financial covenants arent met, a hospitals bond rating may be down-graded, resulting in reduced access to low-cost capital and other serious financial ramifications. For whatever reason, the board, management team, and external constituencies may want to make the rime look better. The heat is on the CFO to do the books differently (Tyler, 2004). In this example, the CFO is responsible to be honest. Manipulating the books the make the number look better would unethical.However, the CFO must make ethical financial decisions. Another example of good ethics is a business leaders sincerity. A business organization can have positive as well as negati ve circumstances. It is very easy to rejoice the positive results but the otherwise is tough. The leaders must be sedate enough to articulatio humeri the responsibility of the negative incidents. They should also be capable of setting risque standards of financial ethics in their organizations. It affects the hierarchy and thus the overall ethical health of the organization is positively influenced.For example, the Healthcare Group Purchasing pains Initiative (HGPII), an organization dedicated to promoting the highest ethical standards and practices for the healthcare group buying industry, announced steps that will allow for even more transparency. They are activating a formal process to ensure prompt and fair resolution of supplier complaints regarding a group purchasing organizations (GPO) purchasing process and they are implementing an Independent Advisory Council to have extracurricular observers make sure they are doing everything possible in terms of ethical standard (Fre eman, 2010).Finally it can be concluded that planning, control, organizing and directing, and decision making constitute the financial management. There are generally accepted accounting principles (GAAP) that recommend the best practices to avoid unethical financial reporting. Moreover, there are several examples of ethical conduct for financial aspects. As healthcare organizations are financially very much pressurized and involve a very unfit real time business model, they need to be more sincere in financial management.