Working Capital Management Practices in the Retail Business of Fertilizer and Agricultural Chemicals in Chachoengsao Province

Abstract

This study examines the working capital management process and the financial problems faced by fertilizer and agricultural chemical retailers in Chachoengsao Province. This research was a survey using a qualitative research methodology. In-depth interviews were used to collect data from a sample group of 15 fertilizer and agricultural chemical retailers, eight males and seven females, aged 42-68, and had been in the business for 8-34 years. Content analysis was performed to analyze the data. The results found that entrepreneurs had managed their working capital in all four areas: cash management, inventory management, debtor service, and creditor management. However, most did not manage working capital in accordance with the principle of working capital management, such as not preparing a cash budget, not regularly checking inventory, making agreements with debtors only in a verbal form not in a written form, and not having a system for recording income and expenses. The financial problems found were cash shortages, inventory shortages, stockpiling, bad debts, and defaults on payments to creditors, caused by entrepreneurs’ lack of knowledge and understanding of the importance of working capital management. They preferred to use traditional management practices rather than developing better management processes. Therefore, relevant government agencies are recommended to organize training to provide entrepreneurs with knowledge and awareness of the importance of effective working capital management for small businesses to increase competitiveness and reduce the risk of financial problems.