THE IMPACT OF CASH MANAGEMENT PRACTICES ON THE OPERATIONAL PERFORMANCE OF SMES.
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Date
2024-09-13
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UGANDA CHRISTIAN UNIVERSITY
Abstract
The main purpose of this study is to investigate the impact of cash management on the
performance of SMEs with a case study of Haojue Uganda. The study objectives are to examine
the impact of maintaining business records on the operational performance of Haojue Uganda,
to examine the influence of preparing a cash budget on the operational performance of Haojue
Uganda and to examine the influence of accounts receivable management on the operational
performance of Haojue Uganda.
This study adopted a cross-sectional study with a quantitative research design, using a
questionnaire to collect data. The study population involved 36 respondents who were used to
conclude the study. Primary data was collected through the use of questionnaires.
Effective business record management is crucial for enhancing the operational performance of
SMEs. The study found that maintaining accurate records supports cost control, financial
analysis, tax compliance, inventory management, and decision-making. Proper business
records facilitate risk management, enhance transparency and accountability, and contribute to
better stakeholder relations. The study also found that preparing a cash budget significantly
improves the ability to manage liquidity and operational costs effectively, plan for short-term
expenses, and long-term investments, reduce financial stress and improve decision-making
capabilities. Cash budgeting practices streamlined operational processes, improved
relationships with suppliers and customers, and enhanced financial forecasting and planning.
Effective accounts receivable management plays a vital role in improving profitability,
reducing financial strain, and enhancing liquidity.
The researcher suggests that small and medium-sized enterprises should prioritize
implementing efficient accounts receivable management systems through credit control
measures, flexible payment terms, and clear communication with customers. Optimizing
accounts receivable processes can lead to cost savings and improved profit margins, while
accurate forecasting can support better budgeting and financial planning, ultimately helping
SMEs achieve their business objectives. Maintaining a steady cash flow through timely
collection of outstanding invoices is essential for covering operational costs and supporting
business growth