Executive Summary

This project deals in “Accounting Practices at SPARSH Hospital, Saheed

Nagar, BBSR.”. Payable Management and Fixed Asset Management is one of the
most important aspects of the organization, as they all deal with the internal
management of the organization. The Accounts payable help to reduce the
liabilities of the companies and sound fixed asset management can lead to a
substantial tax savings in depreciation deductions, poor fixed asset practices can
threaten the accuracy of financial reports, causing re-reporting and negatively
impacting the bottom line. Therefore it needs a careful analysis and proper
management.
Creditor are the liabilities for the company which company have to pay
as soon as possible in this Accounts payable helps the company to pay
off the creditors. On the other hand Fixed Asset Management helps the
company to put tracking and depreciating fixed asset, which is an
important task for the organization.
With an increasing domestic and international competition, SPARSH
HOSPITAL Healthcare L.L.C is using decent policy, in order to
maintain its premium position, with proper control on Accounts Payable
and Fixed Assets Management.
 CHAPTER-I
INTRODUCTION

[2]
For Accounts Payable:

What is Account Payable?

Accounts Payable is a means by which you can monitor the disbursement of

money from you company simply put, Accounts payable records and pays a
company’s bill or liabilities.

When a liability or debt is incurred, the vendor to whom the money is owed issues
an “invoice”. The debt or liability is recorded into Account Payable when you enter
the invoice. On the basis of this Account payable, the company is able to pay off all
their liabilities.

The Accounts Payable Cycle

Accounts Payable is normally operated on a monthly accounting cycle. During the

month you enter and post hand checks as they are issued. Then perhaps weekly, bi-
weekly or even daily, depending on the volume of invoices you receive, you use the
checks processing cycle to create, print and post machine check payment to your
vendors. At the end of the month, print the monthly reports and balance the
accounts payable subsidiary ledger to your General Ledger. Finally, run the close
month process to close accounts payable for the current month and prepare for the
next month’s processing.

Reports can be printed and inquiries used to supply information at any time during
the month.

[3]
For Fixed Assets:
Fixed assets are those assets which are required and held permanently
for a pretty longtime in the business and are used for the purpose for
earning profits The successful continuance of the business depends upon
the maintenance of such assets, They are not meant for resale in the
ordinary course of business and the utility of these assets remains so
long as they are in work order, so they are also known as capital assets.
Land and buildings, plant and machinery, motor vans, furniture and
fixtures are some examples of these assets. Financial transactions are
recorded in the books keeping in view the going concern aspect of the
business unit. It is assumed the business unit has a reasonable
expectation of continuing business at a profit for an indefinite period of
time. It will continue to operate in the future. This assumption provides
much of the justification for recording fixed assets at original; cost and
depreciating them in a systematic manner without reference to their
current realizable value.

It is useless to show fixed assets in the balance sheet at their estimated

realizable values if there is no immediate expectation of selling them.
Fixed resale; so they are shown at their book values (i.e. cost less
depreciation provided) and not at their current realizable values. The
market value of a fixed asset may change with the passage of time, but
for accounting purpose it continues to be shown in the books at its bulk
value, i.e., the cost at which it was purchased minus depreciation
provided up to date. The cost concept of accounting depreciation
calculated on the basis of historical costs of old assets is usually lower
than that of those calculated at current value or replacement value. This
result in more profits on paper, which if distributed in full, will lead to
reduction of capital.

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 CHAPTER-II
OBJECTIVES & SCOPE

[5]
NEED FOR VALUATION OF FIXED ASSETS:

Valuation of fixed assets is important in order to have fair measure of

profit or loss and financial position of the concern.
Fixed assets are meant for use for many years the value of these assets
decreases with their use or with time or for other reasons. A portion of
fixed assets reduced by use is converted into cash though charging
depreciation for correct measurement of income, proper measurement of
depreciation is essential, as depreciation constitutes a part of the total
cost of production.

Learning Objective:
1. Accounts payable: -AP is the short term liabilities that
a business owes to any of the outside company stakeholders.
Accounts payable has a lot of importance when you want to
run your business successfully.

The first important reason is that if we don’t exactly know to

whom we owe what we can be fooled by anyone who can
receive repeated payments from us. This usually happens
with businesses when there are no records maintained or the
amount is so much that it becomes extremely difficult to keep
a lid on things. Not knowing the exact date of the payment of
an account payable will result into accumulation of interest
on your company only because of the negligence.

Accounts payable are also important for maintaining the cash

flows. When you are dealing with mass purchases, you often
can negotiate the terms of your accounts payable.

2. Fixed Assets: -Fixed Assets plays very important role in

relating company’s objectives the firms to which capital

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 investment vested on fixed assets. This fixed asset is not
convertible or not liquid able over a period of time the total
owner funds and long-term liabilities are invested in fixed
assets. Since fixed assets playing dominant role in total
business the firms has realized the effective utilization of
fixed assets. So ratio contributes very much in analyzing and
evaluating the performance of fixed assets. If firms fixed
assets are idle and not utilized properly it effects long-term
sustainability of the firms, which may affect liquidity and
solvency and profitability positions of the company. The idle
of fixed assets lead a tremendous in financial cost and
intangible cost associate to it. So there is need for the
companies to evaluate fixed assets performance. Comparison
with similar company and comparison with industry
standards. So chose a study to conduct on the fixed assets
analysis of SPARSH HOSPITAL corporate using ratio in
comparison with previous year performance. The title of the
project is analysis on fixed assets.

Scope of Study:
For Account Payable:-

 Validate all Account Payable invoices

 Review supplier statements and check all invoices

 Review employee expense claims/advances

 Review credit card statements to supporting receipts/vouchers and

journal expenditure
 Run Invoices on Hold, Report to list invoices placed on hold and
then action all holds

[7]
For Fixed assets:

Fixed asset is an asset held with the intention of being used for the
purpose of producing or providing goods or services and is not held for
sale in the normal course of business. Fixed assets often comprise a
significant portion of the total assets of an enterprise, and therefore are
important in the presentation of financial position. Furthermore, the
determination of whether expenditure represents an asset or an expense
can have a material effect on an enterprise's reported results of
operations.

Fixed Assets also need to be capitalized because when it start giving

revenue we have to record it how much a asset is giving the Profit and
how much depreciation we are charging on it.

The project is covered of fixed assets of SPARSH HOSPITAL drawn

from annual reports of the company. The fixed assets considered in the
project are which cannot be converted into cash with one year. Ration
analysis is used for evaluating fixed assets performance of SPARSH
HOSPITAL.

The subject matter is limited to fixed assets it analysis and its

performance but not any other areas of accounting corporate, marketing
and financial matters.

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 CHAPTER-III
HOSPITAL PROFILE

[9]
History

Sparsh Hospital & Critical care is a 100 Bedded multi-specialty state-of-

the-art Hospital in Odisha. It provides comprehensive Healthcare India services.
It is the only hospital in the private sector that has maintained nearly 100% bed
occupancy due to its reputation of providing the highest level of medical services
to patients from Odisha and neighboring states.
The hospital started functioning in 2nd Feb 2007 , it boasts of 100 beds
with one of the largest Intensive Care Units (ICU), most advanced 2 Operation
Theaters, more than 50 consultants and manpower of nearly 400.Hospital attends
to around 30 In-patients and 300 Out-patients daily. The hospital is located in the
heart of Bhubaneswar and is very close to the international airport.
It was established in Sahidnagar on a plot of land approximately 30000
sq.ft. Sparsh Hospital & Critical care continues to maintain its charitable
character in accordance with to the wishes of its founder. Funds generated from
the hospital services are partially utilised for providing free health care to the
poor and needy patients.

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Hospital Profile:

Sparsh Hospitals & Critical Care Private Limited is a Non-govt company,

incorporated on 10 May, 2007. It's a private unlisted company and is classified as
'company limited by shares'.

Company's authorized capital stands at Rs 100.0 lakhs and has 60.000004%

paid-up capital which is Rs 60.0 lakhs. Sparsh Hospitals & Critical Care Private
Limited last annual general meet (AGM) happened on 29 Sep, 2017. The company
last updated its financials on 31 Mar, 2017 as per Ministry of Corporate Affairs
(MCA).

Sparsh Hospitals & Critical Care Private Limited is majorly in Community,

personal & Social Services business from last 13 years and currently, company
operations are active. Current board members & directors are GHANASHYAM
BISWAS, BIDHUBHUSAN NAYAK, DEBABRATA DHIR, SATYABRATA
DHIR and PRIYABRATA DHIR .

Company is registered in Cuttack (Orissa) Registrar Office. Sparsh Hospitals

& Critical Care Private Limited registered address is PLOT NO-A/407 SAHID
NAGAR BHUBANESWAR OR 751007 IN.

[11]
SPARSH HOSPITALS & CRITICAL CARE PRIVATE LIMITED DETAILS

CIN U85110OR2007PTC009323
Date of Incorporation 10 May, 2007
Status Active
Company Category Company limited by Shares
Company Sub-category Non-govt company
Company Class Private
Business Activity Community, personal & Social Services
Authorized Capital 100.0 lakhs
Paid-up Capital 60.0 lakhs
Paid-up Capital % 60.000004
Registrar Office City Cuttack
Registered State Orissa
Registration Number 9323
Registration Date 10 May, 2007
Listing Status Unlisted
AGM last held on 29 Sep, 2017
Balance Sheet last updated on 31 Mar, 2016

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Vision:
To create an enduring legacy in medical care and well-being using state-of-the art
technology and processes that stand for the ultimate in care.
To differentiate ourselves among our competitors as the most patient friendly and
easiest healthcare institution to navigate, meaning :
 Customer service

 Quality

 Compassion

 Excellence

 Safety

 Efficiency

Mission:
We are committed to :
 Setting the standard for excellence in the delivery of patient care, patient
safety, and the quality of the healthcare experience.

 Providing exemplary clinical setting for educating the healthcare delivery

professionals who will form the collaborative healthcare delivery tear of
tomorrow.

 Leading in the introduction of innovative methodologies for healthcare

delivery and quality improvement.

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  Provide comprehensive, caring & cost effective medical treatment of global
standard, through a team of highly qualified & committed medical
professionals with state of the art medical equipment.

 Fulfill of social responsibility to the underprivileged by providing free or

subsidized medical treatment.

Message:

Dr. Priyabrata Dhir

(Chairman-cum- Managing Director)

Dr. Priyabrata Dhir a general physician by profession has initiated the

movement after a successful tenure as an Assistant Surgeon at BSR Bhilai
Cancer Institute for more than three years . Dr. Priyabrata Dhir is the Chairman-
cum-Managing Director of the Company. He had completed his MBBS from
College of Medical Science, Kathmandu University, Nepal in 2002 including
one year rotator internship from SCB Medical College, Cuttack. He has garnered
adequate experience & exposure in clinical field by serving in different capacities
in NTPC General Hospital, BSR Cancer Hospitals & Research Institute, Bhilai
and Hemalata Hospital, Bhubaneswar. His skill & exposure shaped him as a
specialist in Onco surgery & treatment. He had the dream to have his own
hospital & the same was fructified in 2007 in shape of Sparsh. He is the pivotal of
Sparsh Hospital & has been stewarding the Sparsh Brand to the nook & corner
of the State. He is a great leader & a well known social worker who is being duly
epitomized in his contribution to the society in the field of health.

[14]
SPARSH Hospital Philosophy:
Setting the standard for excellence in the delivery of patient care, patient
safety, and the quality of the healthcare experience. Providing exemplary clinical
setting for educating the healthcare delivery professionals who will form the
collaborative healthcare delivery tear of tomorrow.

[15]
 CHAPTER-IV
RESEARCH METHODOLOGY

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1. Research objective: -

Account payable:

My objective is to find out a short-term liquidity measure

used to quantify the rate at which a company pays off its
suppliers. Accounts payable turnover ratio is calculated by taking
the total purchases made from suppliers and dividing it by the
average accounts payable amount during the same period.

𝑇𝑜𝑡𝑎𝑙 𝑆𝑢𝑝𝑝𝑙𝑖𝑒𝑟 𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑠

Accounts Payable Turnover =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑐𝑐𝑜𝑢𝑛𝑡𝑠 𝑃𝑎𝑦𝑎𝑏𝑙𝑒

The measure shows investors how many times per period the
company pays its average payable amount.

Fixed Assets:

 The study is conducted to evaluate fixed assets performance of

SPARSH HOSPITAL.

 The study is conducted to evaluate the fixed assets turnover of

SPARSH HOSPITAL.

 The study is made to known the amount of capital expenditure

made by the company during study period.

 The study is conducted to evaluate depreciation and method of

depreciation adopted by SPARSH HOSPITAL.

 The study is conducted to known the amount of finance made by

long-term liabilities and owner funds towards fixed assets.

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  Study is conducted to evaluate that if fixed assets are liquidated.
What is the proportion of fixed assets amount will contribute for
payment of owner fund and long term liabilities.

 The study is evaluate is giving adequate returns to the company.

2. Research Methodology:-

Both for FIXED ASSETS and ACCOUNT PAYABLE:

The data used for analysis and interpretation form annual reports of the
company that is secondary forms of data. Ratio analysis is used for
calculation on purpose.

The project is presented by using table’s graphs and with their

interpretations. No survey is undertaken or observation study is
conducted in evaluating ‘ACCOUNTING PRACTICES’ performance of
SPARSH HOSPITAL.

3. Limitations:-

Both for FIXED ASSETS and ACCOUNT PAYABLE:

 The study period of 45 days as prescribed by university.

 The study is limited unto the date and information provided by

SPARSH HOSPITAL and its annual reports.

 The report will not provide exact fixed assets status and position in
SPARSH HOSPITAL; it may vary from time to time and situation
to situation.

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 This report is not helpful in investing in SPARSH HOSPITAL
either through disinvestments or capital market.

 The accounting procedure and other accounting principles are

limited by the company changes in them may vary the fixed assets
performance.

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 ACCOUNT PAYABLE PROCESS OF SPARSH HOSPITAL

Accounts Payables is nothing but a Liability which has to be paid by the

company for the goods that they have purchased or services that they
have availed from a Vendor. The Firm is Accountable or responsible to
pay for the goods purchased or services that they have availed.

Accounts payable best practices in controlling accounts payable with the

intention of contributing positively to cash flow and bearing jointly
beneficial relationships with suppliers. The hope between a company
and its suppliers seems to be shaken by accounts payable actions there
by upsetting supplier relations. On the other hand, paying your bills on
time improves your relationship with the supplier. An improved
relationship with suppliers is essential to a company since they supply
priceless trade credit, and also offer ideas for new methods and products,
which are considered as important role in customer service.

As SPARSH HOSPITAL follows centralized Accounting, which is why

Payable is also centralized in SPARSH HOSPITAL healthcare. So, the
procedure is different from other companies.

The procedure of Accounts Payable in SPARSH HOSPITAL is as

follows:

a) Collecting invoices from all section

b) Checking

c) the accuracy of invoices with GRN, PO and also the approval of

the H.O.D

d) Preparing files for processed and un paid invoices for necessary

accounting

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 e) Writing accounts heads in each invoices

f) Arranging invoices alphabetically and put Document Numbers

g) Entering the bills in to computer and checking all the invoices

accounted as correct or not.

h) Copies of invoices generated in H.O sending to various affiliates

i) Preparing payment advices for each suppliers

j) Party reconciliation

k) Proper filing of invoices

l) Checking of GRN list monthly to ensure all the purchase are

entered

m)Proper Bill matching with payment vouchers

n) Preparing monthly expenses details for Trading & Reliance

COLLECTING INVOICES FROM ALL SECTION:

In this step Accounts payable department collect all the
invoices from various branches of SPARSH HOSPITAL
Healthcare. The document which I show is of Al Ain branch.

CHECKING THE ACCURACY OF INVOICES WITH GRN, PO AND

ALSO THE APPROVAL OF THE H.O.D:
In this step employee check the accuracy of GRN and PO
that the amount which GRN and PO is showing is correct and matched

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or not. There is one more document is required that is Approval of Head
of Department (H.O.D).

PREPARING FILES FOR PROCESSED AND UN PAID INVOICES

FOR NECESSARY ACCOUNTING:
In this step the employee makes an separate file for the
processed and unpaid invoices. After that, they do proper accounting
treatment for it.

WRITING ACCOUNTS HEADS IN EACH INVOICES:

In this step employee put every transaction in their prescribed
Accounting head.

ARRANGING INVOICES ALPHABETICALLY AND PUT

DOCUMENT NUMBERS:
In this step employee put the entire document in the
alphabetical order and also put the document numbers on every Invoice.
This helps the employee to find the invoice whenever they need it.

ENTERING THE BILLS IN TO COMPUTER AND CHECKING ALL

THE INVOICES ACCOUNTED AS CORRECT OR NOT:
After all the above steps, in this step the employee put all the
invoice transaction in the computer in their respective accounting head.
After that they have to check that the entire amount which you
accounted is correct or not.

COPIES OF INVOICES GENERATED IN H.O SENDING TO

VARIOUS AFFILIATES:
In this step all the invoices were sent to all the different
branches of SPARSH HOSPITAL healthcare. In which they cross check
all the data that all those data is accounted correctly. This step is done
because this company follows the centralized control.

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PREPARING PAYMENT ADVICES FOR EACH SUPPLIER:
In this step H.O employee makes the payment advice in
Excel sheet. Accordingly, they pay their debt to their suppliers. Actually
it is a Statement on which the Account payable employee gives advice to
the company on how much amount they have to pay to whom.

PARTY RECONCILIATION:
In this part account payable made the suppliers
reconciliation. In this they make tally their account with the supplier
account or if there is any omission then that value comes under the
Reconciliation Account.

PROPER FILING OF INVOICES:

After the reconciliation next step is to make a proper filing of
all the invoices because in reconciliation we record those values which is
not appear in the supplier or SPARSH HOSPITAL statement. After
payment of those omitted values proper filing is mandatory.

CHECKING OF GRN LIST MONTHLY TO ENSURE ALL THE

PURCHASE ARE ENTERED:
Now, in this step monthly list of GRN is checked with the
Books of SPARSH HOSPITAL by the Employee to know there is no
omission or wrong entry.

PROPER BILL MATCHING WITH PAYMENT VOUCHERS:

In this step the employee have to match the entire bill with
the payment vouchers.

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PREPARING MONTHLY EXPENSES DETAILS FOR TRADING &
RELIANCE:
This is the last step of Account payable procedure, in this the
Account payable employee prepares the detail monthly expenses which
is done by the trading and Reliance Department.

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DIAGRAM FOR ACCOUNTS PAYABLE

Invoice sent
to H.O

st
1 QC (Whether
No Sent wrong
all invoices invoices to
belong to related validator
company)

Yes
2nd QC*
Segregate and save (Invoices
invoices in specific folder saved must be
for required validation equal to
invoices

Invoices approved by validator

(with expense account number
and cost center)

3rd QC*
Book invoice in
(Account
accounting software number and cost
according to validation center must be
same as given by
validator)

Invoice is
No
approved for
payment

Yes
Make Payment by using approved
bank account

Change status to
Complete QC* = Quality Check

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 FIXED ASSETS CAPITALIZATION PROCEDURE

1. Budget for capital Expenditure

2. Identify the suppliers

3. Select quotation

4. Raise PO to the lowest quotation

5. Receive the Item/ Install

6. Once commissioned then capitalized

7. Charge depreciation

BUDGET FOR CAPITAL EXPENDITURE:

It is the first step in fixed assets capitalization, in which we
make the Budget for capital expenditure. In this budget we estimate how
much that asset cost to the company and how much we pay for that fixed
asset.

IDENTIFY THE SUPPLIERS:

After estimating the budget, now we proceed to inviting the
supplier’s to whom we purchase the assets. There are lots of supplier’s
with their quotations but at different prices.

SELECT QUOTATION:
Now, after getting the quotation, company selects the best
price from those quotations.

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RAISE PO TO THE LOWEST QUOTATION:
In this step we choose the lowest quotation, on which we
raise the PO (Purchase Order) to Purchase the assets.

RECEIVE THE ITEM/ INSTALL:

In this step, after issuing the purchase order the asset is being
received by the company from the supplier or if it is machinery then it
need to be installed.

ONCE COMMISSIONED THEN CAPITALIZED:

In this step, after when the machinery is installed or any other
assets is being purchased and that asset or machinery is ready to use.
Then we say, that asset is being capitalized.

CHARGE DEPRECIATION:
This is the last step, in this we start charging depreciation on
assets. This depreciation is charged by 2 methods.
1. Straight line method
2. Written down value method

But, SPARSH HOSPITAL uses the written down value method on their
assets.

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 CHAPTER-V
FINDINGS, SUGGESTIONS &
CONCLUSION

[28]
 FINDING

Finding for Accounts Payable

 Company’s debt has compared to its assets is shrinking, which is

generally a good sign.

 SPARSH HOSPITAL takes 15 days to pay off its suppliers, this

shows a good sign

Finding for Fixed Assets

 Regarding the fixed assets to net worth it has observed that it has
been decreased slightly to 89.07.

 Regarding the fixed assets it has been observed that the fixed asset
has decreased.

 The company has AED 0.1 as a long term debt for every Dirham it
has in assets.

 Current funds are used in the fixed assets, which is quite

satisfactory

 Regarding the fixed assets as a percentage of current liabilities it is

observed it is decreased over the Years.

 Regarding the fixed assets to total assets it has been observed that
there was Decrease.

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 SUGGESTIONS & RECOMMENDATIONS:

Suggestion and Recommendation for Accounts Payable are as follow:

 The company should adopt the automatic recording of Accounts

payable entries

 The company should adopt the decentralized way of recording

Accounts payable entries.

Suggestions for efficient management of fixed assets of SPARSH

HOSPITAL are:

 The SPARSH HOSPITAL should follow the NPV method or IRR

method both at a time rather than following only NPV method.

 The SPARSH HOSPITAL should analyze and measure a list of

projects for evaluation.

 The SPARSH HOSPITAL capital budgeting policies should be

achieved in the forthcoming Years.

 SPARSH HOSPITAL must concentrate on other diversification

and takeover.

 SPARSH HOSPITAL must be expanded with profit making units

with low cost.

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 CONCLUSION:

Conclusion for Accounts Payable:

By using this Account Payable System user can get following items.

 Discover the latest timesavers for processing payables

 It is more effective internal controls for reducing duplicate

payments, fraud and wasteful spending

 Turn your AP department into a profit center!

 Streamline the entire payment process with simple techniques –

and dramatically boost your efficiency

 Build safety nets into your processing system that guarantee bills
get paid on time

Conclusion for Fixed Assets:

 After analyzing the financial position of NEW MEDICAL

CENTRE (SPARSH HOSPITAL) and evaluating its fixed assets
Management or capital budgeting techniques in respect of ratio
analysis. The following conclusions are drawn from the project
preparation.

 The progress of the SPARSH HOSPITAL shows that the company

is in good condition as its Long Term Debt to Total Assets Ratio is
quite satisfactory. The financial position of SPARSH HOSPITAL
regarding investment it has been increasing from 100%.

[31]
 BIBLIOGRAPHY

www.wikipedia .com

www.Investopedia.com

http://www.heka-finance.com/

http://www.accountingtools.com

http://www.SPARSH HOSPITAL.ae/

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