Accounting practices and performance of Small Medium Enterprises
Loading...
Date
2024-09-24
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
UCU
Abstract
The purpose of this study was to investigate the relationship between accounting
practices and the performance of Small medium enterprises in the study context.
SMEs are recognized as essential contributors to essential contributors to economic
development. Despite their importance, they face challenges therefore the study
explored how the accounting practices can improve SMEs providing actionable insights
for business owners, policy makers and other stakeholders. The study was guided by
three objectives which included: to examine the role of book keeping in performance
of small medium enterprises in the study context, to examine the role of budgeting on
to performance of small medium enterprises in the study context, to examine the role
of financial reporting in the performance of small medium enterprises in the study
context. The research employees across sectional survey design and gather
qualitative data. The study population comprises of 60 respondents with a sample size
of 52. A structured questionnaire was used to collect primary data on accounting
practices employed by these businesses and their impact on performance indicators
such as profitability, sales growth and overall business sustainability
Key findings revealed a strong positive relationship between accounting practices and
SMEs performance. Respondents agreed that proper bookkeeping enhances financial
accuracy, facilitates better debt management, and enhances budgeting and financial
forecasting all of which contribute to improve financial decision making. Effective
budgeting was found to help SMEs set realistic profitability targets, allocate resources
efficiently, and manage financial risks. Financial reporting was found to improve
transparency, stakeholder confidence, and decision-making processes, contributing to
the overall growth and sustainability of SMEs.
The study emphasizes the significance of adopting reliable and ethical research
practices, including expert-reviewed questionnaires and adherence to confidentiality
and informed consent. This research provides valuable insights into how sound
accounting practices can drive SMEs performance and long term success. These
include the need for SMEs to invest in professional accounting services, implement
formal budgeting processes and adopt digital tools for bookkeeping and financial
reporting. These measures would not only improve operational efficiency but also
increase profitability and long term sustainability
Description
Dissertation