Dr. Vernita Davis
Whether we want to believe it or not, finance is one of, if not, the important factors in running a successful healthcare organization. In order for it to be successful, the four elements of financial management should be executed in its entirety. These four components are controlling, planning, organizing, and decision making. When in the planning stage, it is essential to set goals for the healthcare organization along with its execution. It is in the controlling stage that helps to make sure that the goals set are to be carried out. A way that a manager can control an organization is to conduct monthly or quarterly audits. When organizing, there should be a structure set to make sure that everything is running smoothly and is up to code. With decision making, the overall performance of the other three elements and its successes determines the decisions made. For example, if the organization has gone over budget, it is up to the decision making component to evaluate the situation and to see where there can be cut backs. Not only are the four components important but also the generally accepted accounting principles and general financial ethical standards but corporate compliance, ethics or fraud and abuse will be discussed. One must first have understanding of these terms in order to apply them to daily financial practices. Once there is understanding of these terms, then it would be easier to provide a more ethical approach when it comes to the organization’s financial stability.
Generally accepted accounting principles (GAAP) basically are the guidelines that one should follow when trying to establish proper financial documents and reports. With these guidelines to follow, it was easier to maintain the financial reporting’s for all fields, including healthcare. The generally accepted accounting principles were held in the highest regard. The...