Background: Competence describes actions that will be demonstrated or observed and assessed while competency refers to the skill itself. Following appropriate theoretical and practical training, clinical experience is required to achieve the highest level of clinical competence. It is estimated that many women and newborns die each year due to a lack of qualified health professional around the world. As a result, the purpose of this study was to determine the prevalence and factors influencing clinical competency in the study area. Methods: An Institutional-based cross-sectional study was conducted from 12 August to 12 September 2022, among 403 undergraduate health sciences students of Bahir Dar University. Participants were approached through simple random sampling technique. Data were collected using a pre-tested structured questionnaire through a face-to-face interview, and entered into Epidata version 3.1 and analyzed using SPSS version 22. The prevalence was reported using proportion with 95% CI and summary measures. Predictors were assessed using a multivariable logistic regression analysis model and reported using an adjusted odds ratio (AOR) with 95% CI. Statistical significance was declared at P value less than 0.05. Results: Overall, the prevalence of clinical practice competency was 36.5% [95% CI; 33.5, 39.1]. Students who were provided a logbook (AOR=5.40, 95% CI 2.91, 10.02), adequate clinical cases in the clinical practice placement (AOR=2.72, 95% CI 1.60, 4.60), preceptor show different procedures (AOR=2.50, 95% CI 1.33, 4.71), student’s confidence during conducting procedure (AOR=4.16, 95% CI 1.67, 10.35) and the suitability of the way of teaching to the learning styles of students during skills demonstration (AOR=2.10, 95% CI 1.00, 4.40) were factors statistically associated with clinical practice competence. Conclusions: According to this study, more than three out of every five participants were found to be clinically incompetent. Providing logbooks, adequate clinical cases, preceptors showing different procedures, students’ confidence, and suitability of the way of teaching to the learning styles of students were significantly associated with clinical practice competence. Implementing logbooks, selecting clinical sites, enhancing the confidence of students, preferred teaching/learning styles, and clinical preceptor support were important to improve the clinical competence of students.