Payment Delays and Financial Performance of Construction Firms in Vihiga County, Kenya

Abstract

The purpose of this study was to establish whether payment delays affected financial performance of construction firms in Vihiga County. The study employed cross sectional research design. Stratified simple random sampling and census survey designs were employed with a view of obtaining a sample size of 32 construction firms. The study relied on secondary data from financial reports. Data collected was screened then coded and finally entered into Statistical Package for Social Sciences, SPSS Version 25 and analyzed using both descriptive and inferential statistics using multivariate analysis. The findings were presented in tabular format, whereas explanation was in prose. The Findings were that there was no statistical significant effect between delayed payments and financial performance, probably other factors such as management style and strategies could have affected the two variables. The conclusion is that payment delays do not affect financial performance. Other recommendations include academicians and researchers to formulate a theory that well describes why there exist no effect between payment delays and financial performance. Finance managers of construction firms should institute strategies to mitigate payment delays as they can simultaneously affect other critical business operations apart from financial performance.