ASSESMENT OF FINANCIAL MANAGEMENT SYSTEM: THE CASE OF ETHIOPIAN SHIPPING AND LOGISTICS SERVICE ENTERPRISE

Abstract

This study investigated the financial management system that takes place in Ethiopian shipping and logistics service enterprise multimodal sector with the objective of identifying different causes that are affected the delay of payment and collection invoices. Descriptive Research Design approach used to describe the situations. Both probability and non probability techniques were used to select respondents and data gathered from both primary and secondary sources. Stratified and simple random and purposive sampling was used to select the study participants. Questionnaires, direct observation and interview were used for data collection. Descriptive statistics such as: percentage, mean value, and frequency were employed for data analysis. Based on the data analysis the following findings were forwarded. The finding show that the company’s current payment and collection system was based on paper work. From this perspective the payment and collection system and procedure were not faster rather that needed more employees’ effort and takes more time to perform payment and collection invoices. When payment and collections invoices preparation delay; the company’s transaction also cannot be faster and that affects the overall profitability. The main finding shows there was no E- payment, repetitive unnecessary documents, delay of payment and receivables, ERP not applied properly, and there were no sophisticated system to expedite the transaction. In general the researcher recommended that the enterprise should decrease or avoided paperwork,apply E-payment, and improve the financial activities system and procedures to speed up the transaction and to increase the profit margin.