The effect of record keeping on financial performance of sme's
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Date
2024-09-18
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Uganda Christian University
Abstract
The study sought to examine the effect that Record keeping could have on financial
performance of SMEs in Kyaliwajjala market, Kiira Division.
The researcher adopted a case study research design utilizing the quantitative
approach. A Case study research design was selected because it enables the in-depth
examination of the study problem with a view of providing rich data and a more
comprehensive understanding of issues and problems applicable to real-life situations
as recommended by Soy, (1997).
The study used quantitative method (through self-administered questionnaires) in data
collection for purposes of triangulation to get accurate and reliable data for the study.
From a sample size of 50 respondents, the researcher chose to use simple random
sampling, focusing on grocery stores, from where a total of fifty respondents were
chosen to represent the sample population.
Completed questionnaires were edited, coded, and entered into and categorized into
themes and analyzed using SPSS 20 for Windows.
Regression analysis was used to test the effect of each construct of Record-keeping on
financial performance. In testing the significance of the model, adjusted R2 was used
to measure the extent to which the variation in financial performance explains each
construct of Record-keeping. Financial statistics were computed at a 95% confidence
level to test whether there is a significant relationship between Record keeping and
financial performance.
The findings from the study reveal that Manual bookkeeping is still prevalent among
small businesses, especially in markets where digital access is limited. However,
manual methods increase the likelihood of errors, such as miscalculations, lost
receipts, or duplicate entries, which can distort financial reports. The study suggested
that transitioning to digital bookkeeping systems is the most effective way
The study therefore concludes that Record-keeping has effect on financial
performance of SMEs and recommends proper record filling, retention and retrieval in
order to improve financial performance of SMEs.