Dr. Sunday Simon
Department of Accounting, Faculty of Administrative Sciences and Economics,
Tishk International University, Erbil, Iraq.
Email: [email protected]
DOI: 10.23918/ICABEP2021p42
Abstract
Purpose –The purpose of this study was to explore the foundational understanding of working capital management (WCM).
Design/methodology/approach – This paper adopted an interpretative approach to determine the WCM practices of firms. The qualitative data were generated through semi-structured interviews conducted with two finance directors and eight managers and analysed using thematic analysis.
Findings – The findings reveal that, although customer credit worthiness, shifting payment periods, and customer-supplier relationships are vital to WCM, they are by no means as important as encouraging an open dialogue with customers and suppliers on financial capabilities and risk evaluation. This practice will allow managerial expertise to grow along with the ability to use analytics to draw action-based insights that will aid efficient and effective management of collection periods. This will delay payments and facilitate adherence to terms when it is economical to do so, and simultaneously ensure optimal inventory level maintenance.
Research limitation/implications – Future research could combine face-to-face interviews and focus group discussions with more respondents from more regions.
Practical implications – The insights captured highlight practical issues that can be addressed to help firms meet both their present and future financing needs, run their day-to-day operational activities, and enhance both operational and financial performance.
Originality/value – This study addressed the literature gap by employing semi-structured interviews to explore the role WCM plays in the developing world. The use of a qualitative method offers new insights into the foundational understanding of WCM.
Keywords – Working capital management, firm performance, interviews, Nigeria.
ICABEP2021
International Conference on Accounting, Business, Economics and Politics
3rd joint conference organized by the collaboration of the Faculty of Administrative Sciences and Economics,
Tishk International University, College of Administration and Economics, Salahaddin University-Erbil, and
University of Szczecin, Poland.
