EFFECTS OF CASH MANAGEMENT ON SERVICE DELIVERYAMONG PARASTATALS IN UASIN GISHU COUNTY, KENYA

Abstract

Effective cash management enables management to deal with rapidly changing economic and competitive environments, shifting customer demands and priorities, and restructuring for future development. This study aims at investigating the effects of cash management on the service delivery in Parastatals in Uasin Gishu County. The study established the effects of cash collection technique on service delivery, effects of cash disbursement on the service delivery and effects of cash flow forecasting on the service delivery in Parastatals in Uasin Gishu County. This study was guided by Baumol – Allouis –Tobin (BAT) and Servqual models. The study targeted 13 Parastatals in Uasin Gishu County the unit of analysis were two accountants, two assistant accountants and two account clerks were investigated giving a total of seventy eight respondents. Data for the study was collected using a semi-structured questionnaire. Multiple regressions were used to determine the effect of cash management on service delivery. Study findings indicated that cash collection technique positively and significantly affect service delivery in Parastatals (β1=1.03, p-value = 0.000). Similarly, cash disbursements (β2 = 0.423, p-value = 0.00) cash flow forecasting (β3 = 0.340, p-value = 0.007) had significant and positive effect on service delivery in Parastatals. The significance level was at α = 0.05). Thus, the study inferred that cash collection technique, cash disbursements and cash flow forecasting have a significant effect on service delivery. Therefore the quality of cash documentation should be clearly understood in order to enhance cash collection. Parastatals should have an accounting section, separate from the cashier section in order to enhance efficiency and transparency. Managers must submit invoices to the Parastatals to increase the amount of liquid cash in order to increase financial viability. Parastatals should prepare their cash budgets on monthly basis to estimate cash flows and have a database of daily cash flows, as a means of identifying patterns and monitoring.