Analysis of cash management in health care centers in Uganda. A case study of Norvik Hospital

Abstract

The study analyses cash management in the health care centers in Uganda, a case of Norvik Hospital. Cash management involves cash planning, cash collection and cash disbursement in operation, investing and financing activities to achieve growth of SMEs. Resource Based View (RBV) postulated by Barney’s (1991) and Cash Conversion Theory (Blinder & Maccini, 2001) support the cash management in the hospital. The study was guided by three research objectives; to find out the determinants of cash management at Norvik Hospital, to establish the challenges associated with cash management at Norvik Hospital, and to design appropriate strategies for cash management at Norvik Hospital. The study used a descriptive research design with a quantitative approach. The unit of analysis was Norvik Hospital and the unit of inquiry were staff at the hospital. Primary data was collected from 48 participants using the questionnaires and analyzed with SPSS version 20. Results revealed that major determinants of cash management were projection of cash receipts, determination of cash payment, effective budgeting for cash, clear procedures for remitting cash in the hospital activities, and formulation of independent cash receipt point from invoicing enhance cash management at the hospital. The dominant challenges were lack of cash budgeting, poor supervision of cash receipts and cash payments, poor attitude towards computerized cash management systems, poor credit controls hinder cash management at Hospital. The strategies to improve cash management were regular reconciliation of cash receipts and cash payment, use of cash discounts, use of modern cash management techniques such as Tally, Quick books, segregation of duties, and monitoring and supervision of cash flows for proper planning support cash management at hospital. The study recommends that integration of computerized cash management system, segregation of duties; coupled with supervision and evaluation of cash flow projection support cash management at the hospital.