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The Usefulness of Cash Budgets in Micro, Very Small and Small Retail Enterprises Operating in the Cape Metropolis

Author

Listed:
  • Almaree KEMP

    (Cape Peninsula University of Technology, Cape Town, South Africa)

  • Anthea BOWMAN

    (Cape Peninsula University of Technology, Cape Town, South Africa)

  • Berenice BLOM

    (Cape Peninsula University of Technology, Cape Town, South Africa)

  • Charl VISSER

    (Cape Peninsula University of Technology, Cape Town, South Africa)

  • Danelle BERGOER

    (Cape Peninsula University of Technology, Cape Town, South Africa)

  • Dominique FULLARD

    (Cape Peninsula University of Technology, Cape Town, South Africa)

  • Geraldine MOSES

    (Cape Peninsula University of Technology, Cape Town, South Africa)

  • Sheri-Lee BROWN

    (Cape Peninsula University of Technology, Cape Town, South Africa)

  • Johan BORNMAN

    (Cape Peninsula University of Technology, Cape Town, South Africa)

  • Juan-Pierré BRUWER

    (Cape Peninsula University of Technology, Cape Town, South Africa)

Abstract

The concept of Small Medium and Micro Enterprises (SMMEs) were introduced by the South African government by way of the Small Business Act No. 102 of 1996. Here SMMEs are defined as small business entities that are managed by one or more owner(s) while operating in any sector or sub-sector of the national economy. The main roles of SMMEs are to alleviate poverty, reduce unemployment and uplift the South African economy. South African SMMEs are responsible for employing more than half of the national workforce and are believed to contribute up to 34.8% towards the national Gross Domestic Product. Unfortunately an estimated 80% of South African SMMEs fail within their first 5 years of existence; particularly due to the realisation of micro economic factors and macroeconomic factors. Included in micro economics factors which influence SMMEs is the utilisation of formal financial performance measures. For this research study the main objective of this paper was to establish the extent to which cash budgets (a formal financial performance measure) assist SMME leaders to make sound business decisions in the Cape Metropolis. The study was descriptive in nature and quantitative research methods were used to collect data from 51 SMME leaders. All respondents had to adhere to a set of pre-determined delineation criteria. From the analysed data it is evident that SMME leaders (managers and/or owners) regard cash budgets as important to make sound business decisions however, respondents made limited use thereof.

Suggested Citation

  • Almaree KEMP & Anthea BOWMAN & Berenice BLOM & Charl VISSER & Danelle BERGOER & Dominique FULLARD & Geraldine MOSES & Sheri-Lee BROWN & Johan BORNMAN & Juan-Pierré BRUWER, 2015. "The Usefulness of Cash Budgets in Micro, Very Small and Small Retail Enterprises Operating in the Cape Metropolis," Expert Journal of Business and Management, Sprint Investify, vol. 3(1), pages 1-12.
    • Handle: RePEc:exp:bsness:v:3:y:2015:i:1:p:1-12
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    References listed on IDEAS

    as
    1. Avika Mungal, 2014. "The Perceptions of Small Businesses in the Implementation of Cash Management Techniques," Journal of Economics and Behavioral Studies, AMH International, vol. 6(1), pages 75-83.
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    Citations

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    Cited by:

    1. Juan-Pierré BRUWER & Luyolo SIWANGAZA, 2016. "Is the Control Environment a Basis for Customised Risk Management Initiatives in South African Small, Medium and Micro Enterprises?," Expert Journal of Business and Management, Sprint Investify, vol. 4(2), pages 105-117.
    2. Makomborero Bure & Robertson K. Tengeh, 2019. "Implementation of internal controls and the sustainability of SMEs in Harare in Zimbabwe," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 7(1), pages 201-218, September.
    3. Alfian & Murti Galuh Tresna, 2017. "The Influence of Company’s Age and Owner’s/Manager’s Education on the Use of Accounting Information in Small and Medium Enterprises," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 3(2), pages 64-71.
    4. Juan-Pierré Bruwer & Lindiwe Mabesele & Vincentia Benting & Joël Cloete & Chante Jacobs & Jade Marais & Kgosi-e-tsile Rabolao & Marianne Spangenberg, 2021. "The Theoretical Link Between Cash Flow Statement Usage and Decision Making In South African Small, Medium and Micro Enterprises," International Journal of Business Research and Management (IJBRM), Computer Science Journals (CSC Journals), vol. 12(4), pages 191-204, August.

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    More about this item

    Keywords

    cash budgets; budgets; financial performance measures; SMMEs;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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