Budgeting process and financial performance of private motor companies in Uganda; a case study of Spear Motors Uganda limited

Abstract

The study examined how budgeting process influences the financial performance of private motor companies in Uganda using the case of Spear Motors Uganda Limited. It was guided by three research objectives; to establish how budgetary planning influences efficient and effective allocation of resources in Spear Motors (U) Limited, to assess how budgetary forecasting influences operational efficiency in Spear Motors (U) Limited, to examine how budgetary coordination influences profitability in Spear Motors Limited. The study used a phenomenological approach and used both qualitative and quantitative approaches; it used a sample size of 66 respondents. The data was presented in tables and narrative texts for responses in the interview guide. Based on the testing of the hypotheses, the following are the conclusions of this study: first of all budgetary planning facilitates 37.7% to efficient and effective allocation of resources in the company, the remaining 62.3% is outside the scope of the study; budgetary forecasting facilitates 44.5% to operational efficiency, the remaining 55.5% is outside the scope of the study and finally, budgetary coordination facilitates 45.1% to profitability while 54.9% is outside the scope of the study. The study recommends that there is need for involvement of all stakeholders into the execution of the budgeting process to improve budget implementation. It is also suggested that SMUL should conduct capacity building to ensure effective budget implementation. Furthermore, there is need for management to maintain appropriate levels and standards of budget preparation and management; this will help management to monitor company growth and performance levels.