1. Name the 5 management functions discussed in class. POSDC : Planning, Organiz
ID: 2797782 • Letter: 1
Question
1. Name the 5 management functions discussed in class.
POSDC : Planning, Organizing, Staffing, Directing, and Controlling
2. Explain why healthcare organizations hold cash and marketable securities.
3. Define Accounts Payable.
4. What are the 7 steps in the A/R Cycle
5. Explain “management of Working Capital” and why it is important.
6. Describe 3 approaches to manage/slow the A/P cycle.
7. Explain “Safety of Principal” and what investment vehicles offer relative “Safety of Principal.”
8. Explain “lost charges.”
9. Explain how healthcare organizations deal with “emergency replacement” of capital items.
10. Explain the terms “wire transfer” and “lock box.”
Explanation / Answer
2. Health care sector delivers service, which needs daily commitment to cash. The operating cycle is too short as the sector primary caters to B2C and ends up with a positive working capital, with current assests much higher than current liabilities.
3. Accounts Payable are my liabilities on Balance Sheet i.e the money I owe to my creditors. Comprising mainly of short-term debts. Eg- Unpaid bills/invoices
4. Steps to improve AR-
a.) Conservative Credit Policy
b.) Insurance against AR accounts
c.) Diligent follow up systems
d.) Montitor AR accounts pay off
e.) Diligent credit appraisal
f.) Constant Improvement
g.) Collection of allied payments at the inception
5. The firm's aim is to continue its operations seamlessly by efficintly managing short term payables and recievables. Ideal way, is to delay payments and collect the recievables on time. WCM is crucial for any firm as it indicates firm's opretional efficiency by demonstrating whether the firm is able to pay off its operating expenses.
6. Steps to manage AP-
a.) Centralise AP accounts
b.) Strengthening purchase approval process
c.) Constant review and monitor
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