Micro and Small enterprises is a very important segment that continues to contribute enormously for the economic development of the country and to the state of Manipur in particular. The success and failure of these enterprises depends a lot on the efficient management of its financial resources. Working capital management which is very much a part of the financial management is also a key factor as the functioning of most of these enterprises depend mainly on their working capital. This paper therefore attempts to study the financial management practices followed by the Micro and Small Enterprises (MSEs) in Manipur and to make an awareness about the importance of financial management practices in their business conduct. For the purpose of the study both primary and secondary data are used. Secondary data were collected from the related available literature like books, articles, magazines, MSME annual report, directory of MSME Manipur, etc. Primary data is obtained by distributing structured questionnaire to the owner/manager of the sample enterprises. The results of the study revealed that the financial management practices followed by the Micro and Small enterprises in Manipur are only fire-fighting in nature and no standardised rules or procedures are followed in managing their finance. The study suggested that a standardised financial management practices should be adopted by these enterprises which will enable them to measure and compare their performances.