Financial Management Practices and Business Performance of SMEs in Malaysia: A Proposed Model

Abstract

Financial management is concerned with the acquisition of funds and their efficient application within an organization. Also, financial management comprises one of several functional areas of management, but it is crucial to the success of any small business because it focuses primarily on the efficient administration of funds within the organization. The issues surrounding the financial management practices of the small medium enterprises (SMEs) sector have long garnered the attention and concern of researchers. Therefore, this study will discuss the elements of financial management practices (capital structure management, working capital management, financial reporting and analysis, capital budgeting management, and accounting information system) in influencing the business performance among SMEs in Malaysia.