The Impact of Financial Management Practices on the Performance of Small and Medium Size Enterprises in Adjumani Town Council

Abstract

The study investigated the impact of financial management practices on the performance of small & medium enterprises in Adjumani town council. the study was guided by the following objectives; to Examine the impact of bookkeeping on the performance of small and medium-sized enterprises, to Examine the influence of financial planning on the performance of small and medium-sized enterprises and to Examine the impact of working capital management on the performance of small and medium-sized enterprises in Adjumani Town Council. The research design employed for this study was across-sectional survey design taking on quantitative approach. The correlation analysis revealed that performance of the SME had a positive correlation with book keeping, with a Pearson correlation coefficient of r= 0.105, Performance of SME has also shown a positive correlation with financial planning with a Pearson correlation coefficient of r= 0.215, significant at the 0.01 level (p = 0.002), and SMEs performance also had positive correlation with working capital management indicated by a Pearson correlation coefficient of r= 0.274, significant at the 0.01 level (p = 0.001).. The financial management practices were responsible for 35.2% variation in the performance of the SMEs at Adjumani. It was concluded that financial management practices had significant influence on the performance of small & medium enterprises in Adjumani town council.