Effect of Financial Management Practices on the Business Efficiency of Small And Medium Enterprises in Nigeria

Abstract

The purpose of this study was to determine the effects of financial management practice on the business efficiency of small and medium enterprises in in Nigeria. This involved modern financial management practices. Small and Medium Enterprises play a very significant role in the process of industrialisation and sustenance of economic growth encouragement of entrepreneurship, employment generation, reduction of poverty and contribution to gross domestic product (GDP) in many countries, Nigeria inclusive. They perform that vital role through innovation and production of various goods and services which empower the process of sourcing such funds as well as the effective utilization and efficient management of the funds constitute major challenges of the involvement of well trained professionals accountants to attract at the main objectives of this research was to establish relationship between financial management practices and the business efficiency of small and medium enterprises in Kaduna – Nigeria. The independent variables of the study are working capital management, investment decision, financial decisions, accounting information system and financial reporting and analysis. A descriptive research design was used to analyse data. Advanced statistical analysis was conducted using both inferential and descriptive statistical analysis and regression analysis model. Sample of 230 questionnaires were administered. The study was conducted in Kaduna-Nigeria being a former headquarters of Northern Nigeria is a cosmopolitan area and have numerous small and medium enterprises. The findings revealed that, financial management practices have a significant influence on the business efficiency small and medium enterprises in Kaduna-Nigeria i.e., is therefore, recommended that the government in Nigeria need to introduce new policies through agencies that will encourage SMEs in Nigeria to live and train professional financial experts in their firms. The research also recommends that SMEs should always use the modern financial techniques in keeping financial records.