Working capital management of small and medium enterprises in Cebu

This paper aims to assess the necessity to have an efficient working capital management within SMEs. In reality, SMEs practically focus only on its cash receipts together with its bank account position. Majority of SMEs lack an established standard credit policy, many of it also have a least concern for working capital and financial position. It was revealed that various components in working capital management like cash flow and accounts receivable management, accounts payable and inventory management greatly affect the liquidity and profitability of SMEs. Due to the mismanagement of its working capital, some SMEs struggle in order to survive in the industry. It is advisable for SMEs to give credit on its working capital management by conducting and implementing a customary credit policy to ensure better internal control and financial control system. Hence, the significance of working capital management promotes stable, liquid and profitable SMEs