Assessing cash management in small and medium enterprises: a case of small and medium enterprises in Jinja district

Abstract

The Purpose of the study was to assess cash management in small and medium enterprises in Jinja district basing on the following objectives; to examine the effectiveness of cash management in small and medium enterprises in Jinja district, to find out the challenges faced in cash management by small and medium enterprises in Jinja district, and to recommend possible solution to the challenges faced in cash management by small and medium enterprises in Jinja district This study adopted a cross sectional research design in which quantitative approach was used (Amin, 2015). The sample of 159 was selected using Krejcie and Morgan (1970). Purposive sampling technique was used to select the elements in the sample. Data was collected by the use of questionnaire. The quantitative data was cleaned, edited, coded, entered into the computer and analyzed using the Statistical Package for Social Scientists (SPSS) version 16. Most business persons do not have business plans for their businesses have not attended workshop/seminar/training relating to their business. There are instances where most businesses experience surplus of cash, they do not have cash receipts, do not use cash payments vouchers, do not have their own bank account, do not prepare cash budget, do not segregate cash management roles, and do not bank all the money received in a day. Besides that most businesses lack cash budgeting, have no bank account, experience unrecorded daily cash, experience unrecorded daily cash, have many bad debts, fail to collect some money from its Debtors, and delays to pay off their credit. Nevertheless, there is need for an implementation of basic cash management procedures for proper cash management. Businesses have to allow discounts to debtors, implement proper records management and improve cash flow management among others for proper cash management.