Effectiveness of working capital management by micro enterprises of Tororo Central Market

Abstract

The study aimed at finding out the effectiveness of working capital management by the micro enterprises of Tororo Central Market. The objectives that guided the study were; to find out the effectiveness of cash management, Accounts Receivable Management, Accounts Payable Management, and inventory management by the microenterprises of Tororo Central Market. The study was a cross-sectional survey with an evaluative research design. The study population consisted of micro-entrepreneurs in Tororo Central Market. The study used questionnaires as the main data collection instrument. Data collected was edited and analysed with the use of The Statistical Package for Social Sciences, version 25 from where statistics such as frequencies, percentages, were derived. The study found that cash management posed a huge challenge in the microenterprises in Tororo Central market. The study also revealed that microenterprises appeared to manage their accounts receivables and accounts payables effectively. While the microenterprises investigated moderately managed their inventories. From the findings, the study concluded that most of the microenterprises in Tororo Central Market don’t manage their cash effectively, they need to adapt suitable and proper techniques of managing their accounts receivables while their owners and managers need to evaluate their accounts payable management practices to determine if they are optimising on the possible benefits that can be derived from payables. Decision-makers for the microenterprises need also to acquire a better appreciation of inventory budgets, inventory safeguarding and inventory-related challenges which they can then implement and manage for better profitability. The study recommended that the owners and managers of microenterprises need to be made aware of the benefits of having a bank account and various services that may be accessed from banks through organising for them regular training workshops.