EFFECT OF ACCOUNTS PAYABLE MANAGEMENT PRACTICES ON LIQUIDITY OF PUBLIC TECHNICAL TRAINING INSTITUTIONS IN RIFT VALLEY REGION, KENYA
Mutai Amos Kipkemoi - Student, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Kimani E. Maina - Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
Technical training institutions in Kenya play a strategic role in providing highly skilled artisans, craftsmen, technicians and technologists with the expectation of bringing about economic growth. For a TVET institution to run well, it should have enough liquidity capabilities. However, there has been occurrence of the liquidity problem in TVET institution. This has led to none payment of suppliers on due date, shortage of practical materials used by students in workshops, shortage of food for boarding students, none payment of salaries to none teaching staff, delayed salaries for part time lecturers and early closure of TVET institution each term. Specifically, the study intended to determine the effect of accounts payable management practices on liquidity of public technical training institutions in Rift Valley Region, Kenya. This study was guided by transaction cost theory which is aligned to objective of the study. The study adopted census survey because the numbers of respondents were very few. Accessible population was 38 respondents comprising of 19 principals and 19 accountants. Questionnaires were self-administered. The pilot test was administered using five questionnaires to public technical training institutions in Nyanza region. The content of validity of the data collection instrument was determined through discussing the research instrument with the research supervisor. Cronbach's alpha coefficient above or equal to 0.70 was considered sufficient for reliability test. The data collected was analyzed, with respect to the study objectives, using both descriptive and inferential statistics. Descriptive statistics include frequencies, percentages, mean, standard deviation and variance. Inferential statistics included product moment correlation analysis and multiple regression. The study findings indicated that accounts payable management practices (β = 0.428; ρ < 0.05) was significant to liquidity of public Technical Training Institutions in Rift Valley Region. The study recommended that the principals and stakeholders of TVET institution should negotiate for better terms of credit with their suppliers, this elongates the accounts payable.
