Research/Technical Note
Assessment of Financial Management Practice of Small Businesses: A Case Study of Saja Administrative Town, Yem Zone, Central Ethiopia Regional State
Addisu Shewaye Mengesha*,
Mezmure Kebede,
Daneal Amentte
Issue:
Volume 9, Issue 1, June 2025
Pages:
1-10
Received:
6 December 2024
Accepted:
19 December 2024
Published:
7 January 2025
DOI:
10.11648/j.ijem.20250901.11
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Abstract: Background: Small business enterprises (SBEs) significantly contribute to local economies but face persistent financial management challenges that threaten their growth and sustainability. Key practices like working capital management, financial reporting, and accounting systems are essential but underutilized in Saja Administrative Town. This study seeks to evaluate these practices and identify critical gaps for improvement. Methodology: The study used a descriptive survey and cross-sectional design, gathering data from 240 individuals representing 68 SBEs through stratified and random sampling. Questionnaires and interviews were used as data collection tools, and SPSS software analyzed the findings to uncover financial management practices and challenges. Results: SBEs in Saja Administrative Town face challenges such as inadequate working capital monitoring, insufficient financial reporting, outdated accounting systems, and poor financial planning. These issues stem from limited expertise, disagreements on financial structures, and lack of stakeholder engagement, highlighting the need for systematic improvements. Conclusion: SBEs' financial management challenges in Saja Administrative Town threaten their sustainability. Addressing issues like inadequate reporting, poor planning, and outdated systems requires interventions such as financial training, improved reporting systems, advanced technologies, better planning, and stakeholder engagement. These changes will enhance their financial management and long-term viability.
Abstract: Background: Small business enterprises (SBEs) significantly contribute to local economies but face persistent financial management challenges that threaten their growth and sustainability. Key practices like working capital management, financial reporting, and accounting systems are essential but underutilized in Saja Administrative Town. This stud...
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