Cash Management Practices and Financial Performance of Small and Medium Enterprises (SMEs) in Jordan

Abstract

This study examined empirically the cash management practices and its effect on the financial performance of SMEs in Jordan. However cash shortage is a chronic challenge to these firms, and cash management is very crucial to the survival and growth of small and medium enterprises.

To meet the objective of this study, the researcher sampled  firms operating in various sectors of economic activity. A structured questionnaire was used to collect primary data from the respondents which were analyzed to generate frequencies and percentages.

The study revealed that only (32) percent from SMEs kept track of Cash Receipts and payment. and the majority (67%) of respondents have no knowledge about cash control procedures. The study concluded that cash management practices have influence on the financial performance of SMEs. The researchers recommend to the need to  for SME managers to embrace efficient cash management practices  as a strategy to improve their financial performance .

Keywords: Cash management, cash surplus, cash deficit, cash control, small and Medium  enterprises.