CASH MANAGEMENT IN MEDIUM SCALE ENTERPRISES IN GHANA

CASH MANAGEMENT IN MEDIUM SCALE ENTERPRISES IN GHANA

ABSTRACT
The main thrust of this study is to unveil the working capital management practices of small
and medium scale enterprises in the Western Region of Ghana. A well designed and
implemented working capital management is expected to contributes positively to the
creation of a firms values.
The study used descriptive and analytical sample survey for the representation and the
analysis of the findings. The result shows that 87.4% of the entrepreneurs functioned as sole
proprietors, whiles 14.1% as partnership and the remaining 1.5% as cooperative societies.
The results again shows that 46.1% received credit from suppliers and the average credit
period given by SMEs to their credit customers ranged between seven to sixty days(7-
60days).From the study , two main problems faced by SMEs in dealing with credit
customers are late payment and bad debts.
The results shows that 52.8% of the respondents use note books to represents cash books
whiles non(0%) of the respondents use computer inventory control. 65.3% of the
respondents have bank accounts for their businesses. Personal savings accounted for about
35.7% of the start up capital and SMEs consider inflation /price increases to be more
problematic than even high debtors turnover period and low stock turnover.
Consequently ,it is recommended that there should be greater collaboration between the
Business Advisory Centres(BACs) and the various associations of SMEs for the financial
training of the entrepreneurs.
The SMEs should establish organizations and groups like civil society organizations,
regional, district ,community and interest groups to jointly organise and sponsor training
programmes for their accounting personnel. There is also the need for SMEs to identify their
investment priorities particularly those that are crucial in sustaining their businesses in the
long run. They should sacrifice a chunk of their funds to finance and achieve these priorities
that will enable them to generate extra cash or profits to plough back into other sectors of
their industries.
It is also recommended that SMEs should prepare budget at each time they intend to embark
on major expenses. This will forestall unnecessary, unwanted, overestimated and
underestimated expense. There is also the need for SMEs to formulate credit policy for their
enterprise and to create a re-order level policy for their institution that will create an enabling
environment for them to request for their supply of moderate and high quality stocks.

TABLE OF CONTENT

Title page- – – – – – – – – i
Approval page – – – – – – – -ii
Dedication – – – – – – – – -iii
Acknowledgement – – – – – – – -iv
Abstract – – – – – – – – – -v
Table of content – – – – – – – -vi

CHAPTER ONE
INTRODUCTION – – – – – – – -1
1.0 Background of the study – – – – -1
1.1 Statement of the problem – – – – -5
1.2 Purpose of the study – – – – – -6
1.3 Significance of the study – – – – -8
1.4 Research questions – – – – – -9
1.5 Scope of the study – – – – – – -10

CHAPTER TWO

LITERATURE REVIEW – – – – – – -11

CHAPTER THREE

Research methodology – – – – – – -39
Design of study – – – – – – – -40

CHAPTER FOUR

Presentation, analysis and interpretation of data – -48

CHAPTER FIVE

Summary of findings – – – – – – -60
Conclusion – – – – – – – – -61
Recommendations – – – – – – – -62
Suggestions for further research – – – – -64
References – – – – – – – – -65
Appendix I – – – – — – – – -68
Questionnaire. – – – – – – – -69

CASH MANAGEMENT IN MEDIUM SCALE ENTERPRISES IN GHANA

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