A large number of SMEs’ managers in Tanzania are said to have neglected an important role of preparing and using financial information in decision making. As a result, they have been pursuing poor financial decisions which are regarded to be the main cause for poor performances and increase in failure rates of their undertakings. Specifically, the study analysed the purpose and practice of preparing financial information, its utilization and, perceived importance in the day-to-day management of SMEs. The study adopted a survey design where SMEs falling under service industry (i.e. tourism, marketing and advertising, transportation, health and insurance) were randomly selected to compose a total sample of 140 enterprises. The study used both primary and secondary information; where primary information was collected through survey questionnaires. Statistics and descriptive analysis were applied to explain the survey phenomena. The results of the study show that very few SMEs internally prepare and utilize financial information; most these information are prepared purposely to meet the requirements of financiers, business registration and revenue authorities. Moreover, most of SMEs prepare financial information by using external financial experts; they do not have enough internal resources. Conclusively, SMEs’ managers do not consider financial information to be important towards their decision making.