Genove, Ericka A.

LAB MAN M-4:30-6:30

BMLS II-II 04-13-20

Lecture topic: Laboratory Financial Management

Research examples of financial management and develop a laboratory budget

Financial management is an essential action for any organization to manage financial

resources. A financial manager conducts some activity like financial planning, organizing,
directing and controlling organizational funds. Financial management is what financial
manager do to achieve organizational goals and objectives. It is important to know the
financial management functions of a financial manager to manage resources. It helps you to
take a decision about financial planning and management using business resources.  A
good manager is a good planner, organizer, director and controller of inflow and outflow of
funds. The ultimate objectives of a financial manager are to maximize organizational value.

Examples of financial management:

Subjective example/s:

 When a company engages in proper financial management it improves the transparency

and speediness of payable and receivable management in any of their systems or
organizations. Hence, a faithful relationship is build up with supplier and customer. One
example is managing a laboratory expenses reserved for organizational resources. It
helps to minimize organizational expenses. Financial management doesn’t support
maximizing prepaid expenses. It helps them how to reduce prepaid expenses. This
management helps them to determine a value of assets and management of those
assets. Whether the expenses are targetted or in lined for technological advances and
equipments. When the procurement of fund reduces costs, the efficiency of production
will increase. It will enhance organizational profitability. Timely management of funds
helps them to reduce the costs of a fund and increase the value of the organization.

 Managers in an organization are in need to decide on the amount of investment

available out of the existing finance, on a long-term and short-term basis. Long-term
investment decisions or Capital Budgeting mean committing funds for a long period of
time like fixed assets. These decisions are irreversible and usually include the ones
pertaining to investing in a building and/or land, acquiring new plants/machinery or
replacing the old ones, etc. These decisions determine the financial pursuits and
performance of a business. Short-term investment decisions or Working Capital
Management means committing funds for a short period of time like current assets.
These involve decisions pertaining to the investment of funds in the inventory,
cash, bank deposits, and other short-term investments. They directly affect the liquidity
and performance of the business.

 Example of financial management held in a start up business management especially

financial managers are very much responsible for the financial strength of the business
organization. They prepare all the reports including investment plans and strategies for
the long-term achievements of their business organizations. So we can conclude that
financial management is very vital for any start-up business to plan, organize, operate,
control and monitor financial resources for achieving the ultimate goals as well as
objectives.

 After determining the requirement of capital funds, a decision has to be made regarding
the type and proportion of different sources of funds. At this stage, the financial manager
has to evaluate the appropriate mix of debt and equity capital and various short and
long-term debt ratios. The main objective is to maximize shareholders wealth with a
 minimum cost of capital.

 An example of financial management is when a finance manager has to make

estimation with regards to capital requirements of the company. This will depend upon
expected costs and profits and future programmes and policies of a concern.
Estimations have to be made in an adequate manner which increases earning capacity
of enterprise.

 Financial manager will have several options from which he can raise capital for the
company. He will choose that option which will provide greater earning possibility in less
cost. He will compose leverage to maximizing the shareholder’s value.

 Finance manager has to make decisions to manage finances with regards to cash
management. Cash is required for many purposes like payment of wages and salaries,
payment of electricity and water bills, payment to creditors, meeting current liabilities,
maintainance of enough stock, purchase of raw materials, etc.

 Financial manager has to be remaining alert all the time about financial activities and
business position. Any flaws in the financial aspect can affect the overall business
decision. So the manager should continuously monitor the financial activities of the firm.

Situational example:

 Company X is willing to introduce a new product. For this, the CEO employs a financial
manager to perform all financial activities. Now the manager has to identify the sources
of funds needed for producing the new product. Then he should determine and evaluate
the cost of financing. He will allocate the fund using financial planning. And after gaining
profit he will distribute the profit to the designated stakeholders.

 According to Brown, in the field of medicinal proposes, because science is the most
important part of a grant proposal and will largely determine whether it is funded, many
investigators write the scientific sections first. But writing the budget first can have
advantages. Edward Giniger, an associate member of basic sciences at the Fred
Hutchinson Cancer Research Center (FHCRC) in Seattle, prefers to put together a
rough budget before he writes the proposal: "I determine my budget first. Then I propose
a coherent set of experiments that fit the budget." The budget-first approach helps keep
the proposed work in line with the available money.

 If an organization is consistently overspending their monthly supply budget and cannot

seem to reduce costs, then they may need a second grant. Smaller grants that cover
supplies are available from a number of agencies, and some are specifically targeted at
new investigators. A small grant can also be a springboard to a second larger grant in
the future. "Try to get at least one small grant," advises Nancy Hollingsworth, an
assistant professor of biochemistry and cell biology at the State University of New York,
Stony Brook. Hollingsworth's lab receives support from both an NIH R01 and a Basil
O'Connor Starter Award from the March of Dimes. "It's very hard to grow on a single
R01," she says. "Your second, smaller grant can include specific aims not addressed in
your main grant. Later, you can try for a second R01 or large research grant from
another agency that is based on these independent aims."
Laboratory Budget sample by : Genove, Ericka A.
Reference/s:
Flexible Budget Approach. Retrieved from: https://www.chegg.com/homework-help/questions-and
-answers/centrico-medical-laboratory-government-sponsored-charity-located-island-ste-lucretia-
labor-q25309727
COST CONTROL REPORT
Laboratory Budget Proposal
For the Month Ended March

Actual Static Budget Budget

Variance
Laboratory Samples Php 54,500.00 Php 43,750.00 Php 16,00.00
Collected:

Variable costs:
Medical Supplies Php 865,750.00 Php 627,900.00 Php 244,950.00
Laboratory tests Php 953, 750.00 Php 784,450.00 Php 189,450.00
Refreshments for staff and Php 112,900.50 Php 95,000.00 Php 24,300.50
volunteers
Administrative supplies Php 27,500.50 Php 32,500.00 (Php 9,250.50)

Total Variable cost Php 1,959,901.00 Php 1,539,850 Php 449,450.00

Fixed Cost:
Staff Salaries Php 1,065,000.00 Php 1,065,000.00 0
Equipment depreciation Php 166,850 Php 149,500.00 Php 16,500.00
Rent Php 150,050 Php 150,050.00 0
Utilities Php 28,400 Php 26,000.00 Php 2,050.00

Total Fixed Cost Php 1,410,300.00 Php 1,390,550.00 Php 18,550.00

Total Cost Php 3,370,201.00 Php 2,930,400.00 Php 468,000.00

Reference/s:
Laboratory Finance Manager. Accumen Company. Retrieved from: https://www.chisolutionsinc.com
/services/laboratory-management/laboratory-finance-business-manager/

https://www.managementstudyhq.com/financial-management-meaning-objectives-functions.html