"KEYWORD" is a weird format for a Hill cipher, aren't you confused with the Playfair cipher? There you work with a 5x5 matrix where I and J are often conflated into I (as 26 is one too big) and the key-square is filled with a key word.
This is what you seem to be describing.
In the Hill cipher, the key is a 2x2 matrix over some $\mathbb{Z}_n$, often with $n=26$, which is inconveniently non-prime, not a word. No I and J merging are needed there; we can choose any $n \ge 26$ and add extra characters (like spaces) for convenience.
Back to your question, which I think is probably Playfair: the convention is to remove final padding (often X or Z), needed to create bigrams and then context determines whether a received I means I or J. Spaces also need to be filled in, or maybe X is used for that too. It's one of the disadvantages of hand systems with built-in limitations like this.