Enhancing Cash Management Practices in SMEs through ICT: Insights from Ghana

Abstract

Purpose: This paper critically examines the impact of ICT utilisation in moderating the nexus between cash management and SME performance in Ghana. Design/methodology/approach: A descriptive survey design was adopted. Questionnaires were used to collect quantitative data from 200 SMEs in the Berekum East Municipality, Ghana. The respondents were SME owner-managers. SmartPLS 4 was used to analyse the moderating effect of information and communication technologies on cash management and SME performance. Research Limitations: The cross-sectional design employed in the study limits the ability to track changes over time. Reliance on self-reported data through questionnaires raises concerns about response bias and social desirability bias. Findings: The results revealed that ICT use positively moderates the link between cash management and SME performance, validating the pecking order theory that leveraging ICT solutions optimises internal funds and mitigates liquidity risks. Practical implication: The findings corroborate the pecking order theory, which suggests that SMEs can significantly benefit from utilising ICTs and implementing efficient cash management practices to enhance and sustain their performance and viability. Social implication: The adoption of ICT by SMEs can also bridge the digital divide, creating a more inclusive economy that promotes social fairness and long-term sustainable development by making technology accessible to smaller enterprises. Originality/value: This study is the first in Ghana’s SME setting and thus contributes to the scholarly literature by highlighting the significance of ICT utilisation in the relationship between cash management and SME performance. It proposes actionable strategies to bolster cash management through practical ICT application, thereby fostering business performance and sustainable growth.