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The working-capital management practices of small medium and micro enterprises in the Cape Metropole
Author(s)
Tabot, Enow Samuel
Date Issued
2015
Type
Thesis
Publisher
Cape Peninisula University of Technology
Abstract
The broad aim of this research was to investigate the working-capital
management practices of Small Medium and Micro Enterprises (SMMEs) in the
Cape Metropole. The study was motivated by a lack of research on the workingcapital management practices of SMMEs. Data was collected by means of a questionnaire that comprised closed-ended questions. The findings of the study indicate that most SMMEs manage their cash effectively; however only a minority hold cash for speculative purpose, invest their surplus cash profitably and use computers to manage cash. By contrast, only a minority of the SMMEs sell on credit. Of those that do, only a minority review their credit criteria annually, send reminders to debtors, charge interest for delayed payment, send prompt statements and use computers to manage their receivables. Likewise, only a minority of the SMMEs purchase on credit. Of those that do, a majority pay promptly to take advantage of discounts and thus only a minority settle their accounts on the last date allowed. Interestingly, most of the SMMEs that purchase on credit use computers to manage their payables. Only a minority of the SMMEs perceive a lack of skills, resources, personnel and time as factors that inhibit them from managing their workingcapital effectively. The findings of this study provide invaluable insights on the weaknesses in the working-capital management practices of SMMEs, which could be used to inform future endeavours of the Government when establishing interventions meant to
improve the survival rates of these entities. The findings may also assist SMMEs
to gauge and review their working management practices, particularly their
receivables and payables, with a view to optimising the benefits derived from
these components of working-capital.
management practices of Small Medium and Micro Enterprises (SMMEs) in the
Cape Metropole. The study was motivated by a lack of research on the workingcapital management practices of SMMEs. Data was collected by means of a questionnaire that comprised closed-ended questions. The findings of the study indicate that most SMMEs manage their cash effectively; however only a minority hold cash for speculative purpose, invest their surplus cash profitably and use computers to manage cash. By contrast, only a minority of the SMMEs sell on credit. Of those that do, only a minority review their credit criteria annually, send reminders to debtors, charge interest for delayed payment, send prompt statements and use computers to manage their receivables. Likewise, only a minority of the SMMEs purchase on credit. Of those that do, a majority pay promptly to take advantage of discounts and thus only a minority settle their accounts on the last date allowed. Interestingly, most of the SMMEs that purchase on credit use computers to manage their payables. Only a minority of the SMMEs perceive a lack of skills, resources, personnel and time as factors that inhibit them from managing their workingcapital effectively. The findings of this study provide invaluable insights on the weaknesses in the working-capital management practices of SMMEs, which could be used to inform future endeavours of the Government when establishing interventions meant to
improve the survival rates of these entities. The findings may also assist SMMEs
to gauge and review their working management practices, particularly their
receivables and payables, with a view to optimising the benefits derived from
these components of working-capital.
Additional information
Thesis (MTech (Cost and Management Accounting))--Cape Peninsula University of Technology, 2015
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212304356_Tabot_ES_MTech_Cost_Man_Bus_2016.pdf
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Thesis
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