Edith Sarah Chebet2023-10-202023-10-202023-09-20https://hdl.handle.net/20.500.12311/1241This is a dissertation.A study was carried out to determine the impact of managerial accounting practices on financial performance in small and medium enterprises in Uganda, taking a case of Mbale Town. An explanatory study design was used and 52 respondents were selected to participate in the study using convenience sampling procedure. Data was collected using questionnaires. The study found that managerial accounting practices were not well or fully adopted by SMEs. For instance, although 18 (34.6%) agreed that they planned for overhead expenditure to cover a specific period of time, 40 (76.9%) strongly agreed that they controlled the custody and usage of expendable and consumable overhead materials, 30 (57.6%) agreed that wage deduction against defaulting employees for misuse and wastage of overhead materials and labour hours, most 34 (65.4%) did not have insurance cover on valuable overhead materials. The study further found that the financial performance of SMEs remained negative as most 25 (48.1%) of the respondents disagreed that they had not gained more customers/territory ever since the SME was launched, 32 (61.5%) had not managed to report a profit for 2 or 3 consecutive quarters of the financial year while 28 (53.8%) had not been able to realize a Return on Investment (ROI) which could be partly attributed to poor adoption of management accounting practices as recommended. The study found that there was a positive relationship between managerial accounting practices and financial performance of SMEs. Although 40 (76.9%) of the respondents disagreed that MAPs lead to better employee performance, 30 (57.7%) disagreed that MAPs lead to better employee commitment, most 30 (57.7%) agreed that MAPs lead to better financial management, 25 (48.1%) agreed that MAPs lead to better cost management, 40 (76.9%) strongly agreed that MAPs lead to better prevention of fraud and financial loss and 20 (38.5%) agreed that MAPs lead to achievement of organizational objectives which should act as an incentive for SMEs to fully adopt management accounting practices for day to day running of their enterprises. In conclusion, the study found that management accounting practices were not fully adopted and used by most SMEs which greatly affected their performance and survival. The key recommendations included full adoption of all management accounting practices as well as SME owners receiving some training in these aspects for better SME management and performance.enDissertation