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Receivables Management: Key to Service Delivery for Zimbabwe Local Authorities: Evidence from Hwange Local Board
No full textLocal authorities are mandated with the role of providing essential goods and services to the communities they operate in, hence promoting economic development. Provision of such goods and services requires adequate financing in the form of sound working capital. The purpose of this study was to investigate the relationship between receivable management practice, being a significant component of the working capital cycle, and service delivery considering the challenges encountered in the Zimbabwean context for the period 2017 to 2020. The study adopted a mixed methodology approach and a convergence parallel research design. Stratified random sampling was applied in selecting elements for collecting quantitative data using statistical questionnaires while purposive sampling was a means to select elements for collecting qualitative data through in-depth interviews. For this study, the data was analysed using both SPSS and thematic analysis for quantitative and qualitative data respectively. The major findings were that Zimbabwean local authorities use a combination of debt collection strategies but have a weak working capital financial position to support service delivery. More so the study found that there is a lot of political interference in the operations of local authorities as political groups tussle for superiority in the eyes of the voting public, who are consumers of essential goods and services, and this affects debt collection and management. Considering the findings stated, the study concluded that cash flow constraints experienced by local authorities are caused by poor management of the working capital cycle and political interference is a stumbling block to effective debt management practice, a key component of working capital financing. The research recommends the use of a combination of collection strategies, equitable treatment of debtors and the modification of statutes to allow Local Authorities to invest in capital markets.