Question

The importance of management accounting

The three pillars of accounting are planning, contrlk and decision making. Suppose you are general manager of a company dedicated to hospital cleaning services. Your goal for next year is to extend cleaning services to offices and houses. What questions should you answer in the planning and control stages to reach this goal and what financial information would you need to establish a budget ?; The answer includes how management accounting can help you in making decisions regarding the extent of cleaning services.

Answer 1

General Manager of a company , dedicated to Hospital Cleaning services – How management accounting can help to make decision regarding the extent of cleaning Services :

Before start cleaning services , need to make proper plan . Need to ensure following point :

1. The staff time available for cleaning, supervision and monitoring
2. Staff Training
3. Ensure accountability , manage and minimise risk
4. Comprehensive Policies and procedures , developed in collaboration by providers and users

While doing planning and control test , need to ensure :

1. Assuring Quality –
2. Infection control – ensure that every one should maintain “ Standards for environmental cleanliness in Hospital”
3. Supervision and monitoring
4. Staff turnover and absence
5. Reviewing and comparing domestic services

As a general manager , he needs to ensure that Hospital Housekeepers are responsible for sustaining a sterile environment in all areas of the Hospital by cleaning rooms , making beds , replenishing linens and maintaining floors .

General Manager should follow following diagram in case of Cleaning Services :

Medical Superintendent – officer In charge – Senior Officer – Sanitary Inspector – Sanitary attendance – Machine Operator – Store keeper – Plumber

General Manager has to make Work Planning – Work schedule should be as detailed and complete as possible – The Optimal resourcing of sanitation services is a priority for all healthcare providers

Next step would be Environment cleaning – this mainly includes Hand hygiene , use of personal protective Equipment ( PPE) , standardised clinic protocol

Also important to look into Vulnerability of the patient / Residential population as well as probability of Contamination of items and Surfaces

While doing planning and control establishment , General manager has to do Risk analysis also . GM has to categorise risk into three parts – 1) High risk area 2) Moderate risk area and 3) Low risk area

Under High risk area – consistently maintain high cleaning standard . High risk area includes operational Theatres ( OT) , ICU , Emergency department , surgical word etc .

Moderate risk area includes – laboratory area , Blood bank Laundry area etc ..

Financial information to meet above Planning and control activity -

Financial Consideration for hospital cleaning services – mainly includes :

1. Investment in Quality
2. Tools
3. Innovation
4. Workforce
5. Commercial models
6. Training and Education

Financial information / hospital accounting is a particular system of accounting which accumulates , communicates and interprets historical and projected economic date that are useful for the purpose of ascertaining the financial position and operating result