Cash management and control in a local private hospital : a case study

Abstract

A private hospital is a business and should be managed as a business, being able to face the challenges which it encounters and compete in an ever-increasing globalised world. This 'requirement' has been properly understood in a local private hospital which adopts a sophisticated mechanism for managing and controlling cash, as this is considered as a vital measure of corporate financial health. The role of cash management is to plan, monitor and control the cash flows and the cash position of a company. The importance of cash in terms of its benefits and the actions required might not be fully understood by managers. But the availability of cash makes it convenient for a firm to exploit opportunities and ensure liquidity. Corporate survival and growth may be jeopardised unless sound cash management policies are established and implemented. This study has focused on the cash management and control in a local private hospital so as to identify major strengths and possible weaknesses. The application of the various theoretical principles about cash management has been examined thoroughly and an assessment as to whether they are relevant for the Hospital was continuously made. The study also puts forward various recommendations on how management can improve the Hospital's cash position, particularly by adopting a proactive approach and a continuous review of the cash function.