ACCOUNTING FOR SMALL BUSINESS ORGANIZATIONS

Category:

Description

ACCOUNTING FOR SMALL BUSINESS ORGANIZATIONS

Zotorvie, J. (2017). A study of Financial Accounting Practices of Small and Medium Scale Enterprises (SMEs) in Ho Municipality, Ghana. International Journal of Academic Research in Business and Social Sciences, 7(7). Doi: 10.6007/ijarbss/v7-i7/3075

This article by Justice Stephen Tetteh Zotorvie reveals the accounting practices of small business within the municipality of Ho in Ghana. The article demonstrates that small business organizations in this country do not follow the standard accounting practices, which are required for proper managed of any business. The research revealed that majority of the business did not keep proper records. As such, manager of these businesses were not able to tell if their businesses were making profits or losses. In total, 225 small business owners were involved in the research (Zotorvie, 2017). The article also states that some managers of these businesses were not able to high qualified accountants who could help in preparing the required financial statements. Moreover, the managers themselves lacked the prerequisite skills and knowledge needed in preparing financial statements as well as filing of tax returns to the relevant authorities.  Through, this article it comes clear that small businesses in the town of Ho in Ghana have great problems in keeping proper financial records which could help in determining whether the businesses are making profits or losses. The article recommends for proper training of managers of small business in areas such as book keeping as well as accounting practices.ACCOUNTING FOR SMALL BUSINESS ORGANIZATIONS

Agyei-Mensah, B. (2010). Financial Management Practices of Small Firms in Ghana: An Empirical Study. SSRN Electronic Journal. Doi: 10.2139/ssrn.1597243

 

This article examined accounting practices of small businesses in Ghana. The research conducted sought to find out how small businesses operated with regard to keeping proper books of records as well keeping the required financial records (Agyei-Mensah, 2010).  The study showed that there were major accounting issues with regard to these small businesses. For example, the study revealed that the employment procedures used were not effective since most of the businesses employed family members who were not required to sign any contract. The capital was also raised from family members and friends, which applied across to all the small businesses. Additionally, the managers who were the owners of the businesses did not take any salary. There was also mix-up between personal and business transactions. Therefore, establishing the way the businesses were performing was a hard. The managers could not tell whether their business were making losses, were growing or if they were making losses. On the side of authorities, it was equally hard to determine the amount of taxes that the small businesses were supposed to pay. Lack of proper book keeping as well as sound accounting practices in these organizations made it hard to decide on how to tax them and give them advice on how to improve their performances. The article calls for proper training and avoiding mixing business and non-business transactions. Through such measures, the businesses will be able to perform better and the owners will easily know where their businesses are headed in terms of making losses or generating profits.

T.E, O. (2013). The Impact Of Accounting System On The Performance Of Small And Medium Scale Enterprises In Nigeria – A Survey of SME’s In Oyo State – Nigeria. Www.Ijbmi.Org, 2(9).

This article examined the impact of accounting system on small and medium sized business organizations in Nigeria. The research was designed to find how accounting system was affecting small and medium businesses. From the research conducted, it was revealed that seventy-four percent of those involved in the study stated that they recognized that when small and medium business organization adopted sound accounting systems it led to better performance of these business organizations. Furthermore, the respondent also agreed that having proper accounting records made the process of decision-making easier. The managers were able to make more sound business decisions using the available accounting records. Thus the article demonstrates that effective accounting system is vital for better performance of small and medium business enterprises in Nigeria (T.E, 2013).ACCOUNTING FOR SMALL BUSINESS ORGANIZATIONS

Husin, M., & Ibrahim, M. (2014). The Role of Accounting Services and Impact on Small Medium Enterprises (SMEs) Performance in Manufacturing Sector from East Coast Region of Malaysia: A Conceptual Paper. Procedia – Social and Behavioral Sciences, 115, 54-67. Doi: 10.1016/j.sbspro.2014.02.415

The article “The Role of Accounting Services and Impact on Small Medium Enterprises Performance in Manufacturing Sector from East Coast Region of Malaysia by Mohd Azian Husin and Mohamed Dahlan Ibrahim sought to find how accounting practices were affecting the performance of manufacturing sector. The small and medium enterprises lack enough expertise, which is a major problem in these organizations. They are usually forced to outsource accounting services. Even though these businesses use services of professionals, the managers in most cases do not know how to use the information contained in the reports. They do not know how to use the data contained in the report. As such, they are not convinced of the usefulness of the accounting and financial reporting standards. The article states that sound accounting practices are vital for and effective in helping manufacturing business in making the best possible decisions. They are also helpful in helping in maintain proper records for future reference (Husin & Ibrahim, 2014).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Agyei-Mensah, B. (2010). Financial Management Practices of Small Firms in Ghana: An Empirical Study. SSRN Electronic Journal. Doi: 10.2139/ssrn.1597243

Husin, M., & Ibrahim, M. (2014). The Role of Accounting Services and Impact on Small Medium Enterprises (SMEs) Performance in Manufacturing Sector from East Coast Region of Malaysia: A Conceptual Paper. Procedia – Social and Behavioral Sciences, 115, 54-67. Doi: 10.1016/j.sbspro.2014.02.415

T.E, O. (2013). The Impact Of Accounting System On The Performance Of Small And Medium Scale Enterprises In Nigeria – A Survey of SME’s In Oyo State – Nigeria. Www.Ijbmi.Org, 2(9).

Zotorvie, J. (2017). A study of Financial Accounting Practices of Small and Medium Scale Enterprises (SMEs) in Ho Municipality, Ghana. International Journal of Academic Research in Business and Social Sciences, 7(7). Doi: 10.6007/ijarbss/v7-i7/3075