Accounts Receivable Management Practices and Financial Performance of Public Technical, Vocational Education and Training Institutions in Baringo County, Kenya

Fees receivables owed by students and sponsors constitute some of the largest current assets of public Technical, Vocational Education and Training (TVET) institutions in Kenya, while delays in capitation and scholarships make the collection of fee receivables a key financial issue for such institutions. This study assessed the impact of receivables management processes on the financial performance of public TVET institutions in Baringo County, Kenya, and whether management competence moderates this relationship. A descriptive cross-sectional survey was undertaken among 144 employees in the finance, procurement and administration departments selected via stratified random sampling among 224 employees in 16 public TVET institutions in Baringo County; 117 participated (81.25%). The process of receivables management was assessed via analysis of credit policies, bad debts, collection processes and ageing (α = 0.740). Audited financial statements for 13 institutions for fiscal year 2021/22 to 2023/24 facilitated ratio analysis. Data analysis involved correlation and hierarchical moderated regression. Receivable policies were commonly practiced (M = 4.07, SD = 0.866) although there was a weak positive correlation that was not significant with financial performance (r = 0.165, p = 0.076). Controlling for management of cash, inventory and accounts payable and the competence of management, the management of receivables was negatively and significantly related to financial performance (β = -0.420, t = -4.110, p < 0.001) showing a suppression effect that was associated with its high correlation with management competence (r = 0.634). Management competence was not a moderator (B = 0.090, p = 0.476). Audited ratios revealed a drop in receivables turnover from 2.66 to 2.31 and an increase in collection period from 137 to 158 days.