Abstract Small Scale Industries (SSIs) play a significant role in employment generation, regional development, and economic growth. However, their sustainability largely depends on effective working capital management due to limited access to external finance and dependence on internal funds for daily operations. This study examines the working capital management practices of SSIs with a focus on cash, inventory, and receivables management. The research adopts a descriptive and analytical approach using primary data collected through structured questionnaires from 34 SSI owners/managers selected through simple random sampling. The findings reveal that SSIs actively prepare cash budgets, conduct periodic reconciliations, and maintain strong inventory control systems. Nevertheless, gaps exist in the utilization of budgets for decision-making, segregation of financial duties, preparation of inventory budgets, and collection of receivables. While ageing schedules and receivable reviews are commonly practiced, enforcement of collection policies remains weak. The study suggests strengthening internal controls, promoting budgeting practices, enhancing financial literacy, and adopting digital financial tools to improve efficiency. Overall, effective working capital management is essential for enhancing liquidity, profitability, and long-term sustainability of SSIs, and policy support along with managerial capacity building can significantly improve financial performance in this sector.
Nadaf et al. (Sat,) studied this question.