Abstract:
The issue of delayed payments to suppliers is becoming increasingly prevalent on a global scale.
This problem arises due to a range of factors encompassing both organizational and individual
elements, as well as factors related to the suppliers themselves. This study aimed to find out the
causes and impact of late payments to suppliers in LGAs in Tanzania, using Mbinga Town council
as a case study. A descriptive study design and a qualitative approach were applied for this study.
Quantitative data analysis involved a sample of 78 suppliers who experienced late payments in
Mbinga Town Council, utilizing descriptive analysis and multiple linear regression, while qualitative
data for objectives 1 and 2 were analyzed using thematic analysis, reaching saturation point for
sample size. The analysis of suppliers' payment procedures in Mbinga Town Council uncovers a
well-structured and comprehensive approach to financial management, encompassing sequential
payment workflows, meticulous documentation, effective communication, and a commitment to
continuous improvement. However, the study on the causes of late payments to suppliers within the
council identifies several key issues contributing to delays, including prolonged bureaucratic
procedures, budgetary constraints, divergent priorities, inadequate inter-departmental
communication, and accountability shortcomings. Furthermore, the research reveals that late
payments have a substantial impact on Mbinga Town Council's performance, with 62.6% of
variability in performance explained by the considered factors. Poor financial management,
bureaucratic processes, political influences, and skill deficiencies emerge as significant factors
leading to adverse performance outcomes. In contrast, issues related to cash flow, administrative
inefficiencies, and motivation did not attain statistical significance in this context. To address these
issues, LGAs must prioritize transparent and efficient financial management, streamlined
procurement processes, and robust communication with suppliers. Timely supplier payments are
crucial not only for maintaining healthy relationships and service quality but also for upholding the
credibility and effectiveness of local government operations
