Abstract

Small and Medium-sized Enterprises (SMEs) play a critical role in Nigeria's economic development by contributing to employment generation, poverty reduction, and industrial growth. However, poor financial control and weak performance management mechanisms have hindered their sustainability and growth. This study proposes a conceptual framework for financial control and performance management tailored to Nigerian SMEs. The framework integrates key financial management practices, strategic planning, and performance measurement tools to enhance financial sustainability, operational efficiency, and long-term competitiveness. The study adopts a qualitative approach, drawing insights from existing financial control theories, performance management models, and SME financing frameworks. The proposed framework consists of four core components: (1) Financial Planning and Budgeting, which ensures proper resource allocation and cost control; (2) Internal Financial Control Mechanisms, including risk assessment, fraud prevention, and compliance monitoring; (3) Performance Measurement and Key Performance Indicators (KPIs) to track financial health, profitability, and efficiency; and (4) Technology-Driven Financial Management, leveraging digital tools, financial analytics, and automation to improve financial decision-making and reporting accuracy. The framework addresses common financial challenges faced by Nigerian SMEs, such as poor bookkeeping, limited access to credit, high operational costs, and ineffective financial decision-making. By implementing robust financial control mechanisms and performance management strategies, SMEs can improve cash flow management, enhance profitability, and mitigate financial risks. Furthermore, the adoption of financial technology solutions can optimize accounting processes, ensure transparency, and provide real-time financial insights. This study contributes to the literature on SME financial management by offering a structured and adaptable framework that aligns with the Nigerian economic context. The findings provide valuable insights for SME owners, financial managers, policymakers, and stakeholders seeking to improve financial control practices and performance outcomes. Future research should empirically validate the framework using case studies and industry-specific applications to enhance its practical relevance.