The Financial Management Practices of Small to Medium Enterprises

TitleThe Financial Management Practices of Small to Medium Enterprises
Publication TypeConference Paper
Year of Publication2015
AuthorsMazzarol, T, Reboud, S, Clark, D
Conference Name28th Annual SEAANZ Conference 2015
PublisherSmall Enterprise Association of Australia and New Zealand
Conference Location1-3 July, Melbourne
KeywordsAustralia, financial management, owner-manager, Small Business, SMEs
This paper examines financial management practices in small to medium enterprises (SMEs) from a study of 289 small business owner-managers across 30 industry sectors in Australia and Singapore. The data was collected using a case study survey by MBA students and analysed via three stages: (1) examination of the quantitative survey data; (2) NVivo analysis of the interview data; and (3) Leximancer analysis of the selected coded transcripts. The findings show that SMEs have largely informal and ad hoc financial management practices. Differences by size and financial literacy levels were found. As the firm grows in size and complexity the owner-manager is required to adopt more sophisticated and systematic approaches to financial management. SMEs with higher financial literacy have greater capacity to monitor and control the financial performance of their businesses. Challenges for SMEs negotiating with more powerful players were also identified and approaches to address this issue briefly discussed.