Working Capital Management Function In Relation To Performance: A Case Of Small And Medium Enterprises In Sumbawanga Municipality

This study aimed to assess the working capital management function in relation to the performance of SMEs located in Sumbawanga municipality Rukwa Region, Tanzania. It was guided by the Operating Cycle Theory main objective to investigate how the working capital management function is performed in small and medium enterprises, and how it is linked to organizational performance. The study used mixed approach,thusqualitative and quantitative under which convergent parallel design was used. The targeted population is 4000 SMEs. The registered population that fits this study is 100 SMEs. This should be 80, assuming the error margin of 5% (and 95% confidence level) for a population of between 90 and 100. Purposive sampling and simple random sampling were applied. Questionnaires, and Semi-structured interviews were used as data collection instruments. Descriptive statistics and themes were used to analyze data. Likert-scale were used as the tool for data collection, to be analyzed with the Statistical Package for the Social Sciences (SPSS) version 20 software. The findings showed that the Inventory Management Function not well practiced due to inadequate skills on the inventory management hence poor performance; that the SMEsfirms didn’t understand properly the policies that guides credit sales.