Financial Management System in Hospital – ROJoson’s Notes

Financial Management System in a Hospital

A hospital needs a structured and comprehensive financial management system to ensure viability and sustainability.

Financial management system deals with the money to collect; accounting of money collected; safekeeping of collected money; and how to use the money.

The simplest organizational structure of a financial management system of a hospital can be as follows:

Financial Chief – overall head of the Finance Unit

Within the Finance Unit, 3 subunits:

  • Accounting
  • Treasury Management
  • Client Account Service

 

Accounting Unit

The Accounting Unit will do the traditional functions of financial accounting which include:

  • methods for recording transactions
  • keeping financial records
  • performing internal audits
  • reporting and analyzing financial information to the management
  • advising on taxation matters

Accounting is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information.

Accounting reveals profit or loss for a given period, and the value and nature of a firm’s assets, liabilities and owners’ equity.

Accounting provides information on

 

Treasury Management

The Treasury Management Unit will do the traditional functions of treasury management which includes management of an enterprise’s holdings, with the ultimate goal of managing the firm’s liquidity and mitigating its operational, financial and reputational risk.

Treasury management includes a hospital’s collections, disbursements, concentration, investment and funding activities.

Cashier is under Treasury.
Client Account Service  
The Client Account Service Unit will do the traditional functions of preparing a statement of account or billing for services rendered to clients.  Clients are mainly patient-clients. They may be other clients like corporate accounts and lessees of hospital spaces..

Billing is under Client Account Service.

PhilHealth, Health Maintenance Organizations, and Companies accounts are under the Client Account Service.

 

Manual of Governance and Operations and Management Systems 

For all the subunits under the Finance Unit, there must be a manual of governance and operations or a structured and comprehensive management system following the ROJoson’s Department Development Framework.

Flow of money from cashier to bank

Cashier Treasurer Officer

 

Collect money Place money in vault (during off-banking hours/days) Deposit in bank

 

Cashier 

Main station

Substation (DEMS)

 

Security from external theft / robbery

Security from internal theft

 

Records of transaction / movement

Personnel

 

Relationship of Accounting, Billing, and Treasury

Accounting
Money Billing Cashier Treasury
Inventory Department Inventory

 

Treasury  (based BOD policies and decisions)

  • Disbursement
  • Investment

 

ROJ@17apr10

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