When the internal audit is being carried out, there are several problems that will be discovered by the internal auditors. One of the problems that will be discovered is the inappropriate keeping of accounts receivables. Accounts receivable should be kept in an appropriate manner to allow the hospital make some follow-ups on the accounts that have not been settled. Due to the inadequate knowledge, then it might be impossible to keep appropriate records of the accounts receivable. When the records of the accounts receivable are not kept properly some of the patients might take advantage of the situation and not pay the money, they are being owed by the hospital (Bell 23). In case, the services that have been rendered for are not paid for, then the hospital might not be in a position to run its operations effectively. Thus, it would be important for the hospital to carry out internal auditing to determine this problem and appropriately remedy the situation.
Another problem that might be identified while carrying out the internal audit is the poor management of the cash flows. It is important for the hospital to put in place good cash flow management strategies. If the hospital is not able to manage its cash flows in an appropriate manner, then it will be faced with a myriad of challenges. It would be difficult for the hospital to prepare its financial statements such as incomes statements and balance sheet (Bell 48). Inadequate management of cash flows might result into an inability to cover expenses, finance capital projects and inability to pay its creditors. In the case of a hospital, poor management of cash flows may result in an inadequate procurement of goods such as drugs as the suppliers might not be willing to supply the drugs due to poor payments of the goods supplied to the hospital.
The hospital can hire billing specialists who have adequate experiments in cash management to address problems associated with billing. Such personnel will be in a position to ensure that accounts receivable are adequately managed. The hospital can also introduce technology to manage digitally its cash and also carry out its operations adequately (Foster 29).
For the hospital to process the bills promptly, it should introduce strategies that allow strict management of the billing and procurement processes. One of the strategies is to introduce billing technology. Technology is changing and any organization that embraces it is in positions to ensure its billing operations are timely managed. Technology will ensure that accounts receivable are duly followed and in case there is a problem, it will be identified and addressed at their early stages (Foster 47). It is also important for the hospital to ensure billing and procurement managements are up to date. Good management of the billing process eliminates the problems associated with it. Late billing is not a sole problem but it is a problem associated to several personnel in the hospital. The financial managers are also responsible for the late billing since they should carry out routine financial management. The patients might also be responsible for late billing since they might have delayed paying for the services rendered. If the patients refuse to pay as a result of the hospitals poor upfront about the costs, then it can write the pending debts. It is important to come up with updated strategies of reducing the late billing immediately the bad debts are written off. This is necessary to eliminate the future problems associated with the billing process.
Works Cited
Bell, Edward C. Choosing an Accounts Recievable System for a Commercial Property Management Company. Berkeley: U of California, 2003. Print.
Foster, David A. Analysis, Design, and Implementation of a Computerized Accounts Recievable Management Package. Berkeley: U of California, 2006. Print.
