Authors : Marie Rose Mukanyandwi; Dr. Claude Rusibana

Volume/Issue : Volume 8 - 2023, Issue 12 - December

Google Scholar : http://tinyurl.com/4b76sfzb

Scribd : http://tinyurl.com/566rsbbj

DOI : https://doi.org/10.5281/zenodo.10496383

Abstract : This study entitled “Effect of revenue management on financial sustainability of SMEs in Rwanda, a case study of SMEs in MUHANGA district. The study was guided by the following specific objectives: to examine the effect of cash flow forecasting on financial sustainability of SMEs in MUHANGA District, to determine the effect of liquidity management on financial sustainability of SMEs in MUHANGA District, and to determine effects of revenue control on financial sustainability of SMEs in MUHANGA District. Among 32,880 SMEs, the study sampled 100 SMEs as sample size. The primary data was collected through structured questionnaires, whereas secondary data through reading and analysis of relevant books, report and journals. The data collected was edited, coded and fed into SPSS software version 23 for analysis. Regression analysis was done to investigate the relationship between the variables under study. The study found out that revenue management has a contribution on financial sustainability of SMEs as it can be seen on this regression equation: Sustainability of SMEs is measured by-3.725- 0.031Cash Flow Forecasting control+0.017Liquidity Management-0.008Revenue Control +0.371 Profitability +0.320 Liquidity Ratio +0.374 Debt Management Ratio. The findings revealed that the level of sustainability of SMEs in Muhanga district in relation to revenue management was very high mean (4.24). The findings indicated that cash flow forecasting control and liquidity management is moderate negatively correlated with r= - 0.05, The cash flow forecasting control and sales growth, liquidity management and revenue control are positively correlated with r=0.02. These findings further indicate that sales growth contributes most towards financial sustainability of SMEs. The researcher brought out the summary based on the findings by demonstrating the effect of revenue management on financial sustainability of SMEs. The research findings revealed that Profitability, Liquidity Ratio and Debt Management Ratio are positively associated with financial sustainability of SMEs in Muhanga district while Cash Flow Forecasting control and Revenue Control are negatively correlated financial sustainability of SMEs . Based on the results, findings and conclusions on the study, the study recommends that the need for SMEs to institute more robust revenue planning practices that will help reduce their effective tax liabilities and therefore improve their financial sustainability. The study also recommends that the Rwanda Revenue Authority should help SMEs to plan their tax liabilities as this helps to encourage more firms to pay taxes rather than evade or avoid taxes.