Effect of use of budgets on expense management by Micro and Small Businesses in Nairobi West area

Abstract

The purpose of this research was to determine the impacts of budgets on the growth of total expenses of MSBs in Nairobi West. The research employed the use of descriptive research method focusing on a proportion of 30 MSBs taken as a sample of the 170 MSBs in Nairobi West shopping centre. Primary and secondary data were used effectively for this research. Primary data was collected through administration of a structured questionnaire with the selected respondents. The study employed the use of regression model to show the relationship existing between dependent and independent variables. The findings of the study showed that budgets have a strong positive impact on financial performance on manufacturing firms as measured by expense management. The study suggests promoting successful execution of the budget through capacity building, rigorous prioritization of systems and processes, and near assessment monitoring. Therefore, a clear link between the planning process and the budget process must be formed between manufacturing companies.