Budgetary Control and Financial Performance of Manufacturing SMEs in Osun State, Nigeria

A Quantitative Approach

  • O. O. Fasesin Department of Accountancy, Osun State Polytechnic, Iree, Nigeria
  • R. Ogunrinade Department of Business Administration and Management, Osun State Polytechnic, Iree, Nigeria
  • Ola T. Olalekan Department of Business Administration and Management, Osun State Polytechnic, Iree, Nigeria
  • G. T. Ayo-Oyebiyi Department of Banking and Finance, Osun State Polytechnic, Iree, Nigeria
  • Ademola Samuel Sajuyigbe Department of Business Studies, Landmark University, Omu-Aran, Nigeria
DOI: https://doi.org/10.34624/ijbi.v2i3.31531
Keywords: Budgetary Control, Sales Budget, Cash Budget, Purchasing Budget, SME, Performance

Abstract

The study determines the various types of budgets used by SMEs and determines the influence of budgetary control on financial performance of SMEs in Osun State, Nigeria. The sampling method used was purposive, while semi closed ended questionnaires were sent to 250 SME operators/managers to collect information on the different types of budgeting used, budget control, and financial performance of their SMEs. A total of 200 completed questionnaires were completed and returned to researcher. The results of simple percentage reveal that approximately 60% of small businesses used budgets, while approximately 40% of small businesses do not. It was further revealed that most SME operators frequently used types of budgets such as sales budget and cash budget, capital budget, and inventory budget while the least frequently used budgets were marketing budget and personnel by the SMEs in Osun State Nigeria. The results also confirm that the majority of SMEs review their budgets, prepare their budgets, and review their financial performance on a monthly basis. Additionally, regression analysis of the model showcases that budgetary control has a significant influence on financial performance of SMEs.  This implies that budget control is a powerful management tool that helps managers carefully analyze all existing operations, and assists SMEs to improve financial performance and sustainability amid global competitive environment. Subsequently, the study recommends that SMEs should organize seminars, workshops, and short courses on the different types of budgets available to make effective decisions terms in terms of an organization's desired performance in pursuing short-term goals. This allows small businesses to accelerate their operational plans and focus on achieving their desired goals.

Published
2023-09-30
How to Cite
Fasesin, O., Ogunrinade, R., Olalekan, O., Ayo-Oyebiyi, G., & Sajuyigbe, A. (2023). Budgetary Control and Financial Performance of Manufacturing SMEs in Osun State, Nigeria. International Journal of Business Innovation, 2(3), e31531. https://doi.org/10.34624/ijbi.v2i3.31531
Issue
Volume 2 Issue 3 (2023)
Section
Accounting

Copyright (c) 2023 O. O. Fasesin, R. Ogunrinade, Ola T. Olalekan, G. T. Ayo-Oyebiyi

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