Financial Management Practices among Small and Medium Scale Enterprises in the Sunyani Municipality

Small and medium-scale enterprises (SMEs) are recognized as the foundation upon which the development of developing and middle-income nations can be built, and Ghana is no exception. They create numerous employment opportunities and incomes for the majority of people living in urban areas, which constitute a major source of overall national output. In view of this, the study was designed to examine the financial management practices among SMEs in the Sunyani Municipality for efficient and effective management of their scarce resources. The study employed a quantitative approach in collecting and analyzing the data from the field. In all, 60 respondents from the different types of SMEs in the Sunyani Magazine area took part in the study. The respondents included both owners and managers of the SMEs. A major feature in analyzing the financial management practices of SMEs was the measure of the rate at which businesses put in mechanisms to effectively plan their finances. This was measured in various components with the use of close-ended questionnaires to respondents. The owners of SMEs were therefore asked to rate their entities on the extent to which financial planning techniques were used and the sources of finance. The study established that SMEs in the study area did not effectively make financial plans in the long term, such as investments in non-current assets, shares, and stocks, as well as in real estate ventures. The SMEs need to set up reliable accounting information systems, report and analyze their financial problems on a regular basis, and lobby for policies that make it easier for SMEs to get low-cost capital. Given that SMEs are known to make significant contributions to national economic growth, it is imperative that they continue to grow.

Small and medium-scale enterprises (SMEs) are recognized as the foundation upon which the development of developing and middle-income nations can be built, and Ghana is no exception. They create numerous employment opportunities and incomes for the majority of people living in urban areas, which constitute a major source of overall national output. In view of this, the study was designed to examine the financial management practices among SMEs in the Sunyani Municipality for efficient and effective management of their scarce resources. The study employed a quantitative approach in collecting and analyzing the data from the field. In all, 60 respondents from the different types of SMEs in the Sunyani Magazine area took part in the study. The respondents included both owners and managers of the SMEs. A major feature in analyzing the financial management practices of SMEs was the measure of the rate at which businesses put in mechanisms to effectively plan their finances. This was measured in various components with the use of close-ended questionnaires to respondents. The owners of SMEs were therefore asked to rate their entities on the extent to which financial planning techniques were used and the sources of finance. The study established that SMEs in the study area did not effectively make financial plans in the long term, such as investments in non-current assets, shares, and stocks, as well as in real estate ventures. The SMEs need to set up reliable accounting information systems, report and analyze their financial problems on a regular basis, and lobby for policies that make it easier for SMEs to get low-cost capital. Given that SMEs are known to make significant contributions to national economic growth, it is imperative that they continue to grow.