CASH MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF SMALL AND MEDIUM SIZED ENTERPRISES IN NAIROBI CITY COUNTY, KENYA”
Abstract
The significance of SMEs in economic development cannot be overlooked. Hence, the study examined the effect of cash management practices on financial performance of SMEs in Nairobi. The study focused on 19,672 SMEs in CBD. The sample size was 392.The pilot study was conducted on SMEs from Westlands and Langata sub-Counties. The results established that cash budgeting, cash control and cash forecasting are positively related to financial performance. Hence, SMEs should consider promoting budgeting in their operations. SMEs can make informed decisions about managing their finances, such as when to make payments or invest in new equipment. In addition, it iwa recommended that SMEs has to emphasize cash control. Further, it was recommended that SMEs should ensure there is cash flow forecasting. SMEs can anticipate and plan for potential shortfalls or surpluses, which can help them make more informed financial decisions and avoid financial difficulties. To increase financial performance, SMEs should make cash flow forecasting a regular part of their financial planning and management.
Key Words: Cash Management, Cash Budgeting, Cash Control, Cash Forecasting
CITATION: Onyango, G. O., & Muchira, B. W. (2023). Cash management practices and financial performance of small and medium sized enterprises in Nairobi City County, Kenya. The Strategic Journal of Business & Change Management, 10 (1), 754 – 771.
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DOI: http://dx.doi.org/10.61426/sjbcm.v10i1.2578
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