Impact of Financial Management Practices on Success of Small Business Enterprises the Case of Woliso Town, South Weest Shewa, Ethiopia

Abstract

The study aims to asses’ financial management practice Impact on small business enterprise in Woliso town. The main objective of the study was to investigate the effect of financial management practices on profitability. The target populations for the study were 135 business organizations found in woliso town. To reach the targeted goal, primary and secondary data were also collected. As to the factor which in inhabit good financial management practices:-Qualified accountants are too expensive to maintain (93%), Accounting records too difficult to understand (87%), Lack of internal accounting staff (73%), the business is too small (73%) were the major factor identified. Lastly, majority of the study show that as financial management practices such as recording, reporting & analysis, working capital management, fixed asset management has positive impact on the profitability (SUCCESS) of the small business and majority of the business firm found in this area. Most Business Enterprises have not appointed financial managers to be in charge of financial management of the company. Therefore, owner of the business should focus on sound financial management practice well. This finding leads to the conclusion that the efficiency of financial management practices and characteristics can bring about higher profitability. Therefore, business organizations can improve profitability by raising the efficiency of financial management practices and characteristics.