Accounting Records Keeping and Growth of Small and Medium Enterprises in Kumasi Metropolitan

Abstract

Small and medium enterprises constitute about 90% of the Ghanaian economy. This study explored accounting records keeping and growth of small and medium enterprises in Kumasi Metropolitan Assembly. The target population of the study was the owners or managers of small businesses in Kumasi Metropolitan Assembly. This study adopted a descriptive survey research approach. The study used stratified random sampling methods to sample the respondents. The study considered a total sample size of 200 small business operators and an interview with 1 personnel in NBSSI in Kumasi Metropolitan Assembly. It was found out that the most SME operators in Kumasi Metropolitan keep the following books altogether; sales book, purchases book, cash book and employees payroll. The research revealed that some businesses in the Metropolitan do not keep accounting records because they do not see the need (33.3%) and at the same time they want to keep secrets of their business from their competitors (28.6%). Also, some cited accounting system being expensive to operate and, some SME operators stated lack of the requisite accounting skills. In addition, the findings showed that accurate accounting record keeping of SMEs transactions is essential to the growth of the enterprises in determining their profit/loss level, acquiring credit facilities from banks, ability to have some document to back up their tax records and able to make efficient financial decisions of their business. The challenges of keeping of accurate records were highly blamed on cost constraints (58.2%), difficulty in maintaining the system (21.5%) and non-availability of skills personnel (8.2%). Following this, the study recommended that the appropriate authorities in the metropolitan concerned should come up with an efficient program for training the SMEs owners or managers. Additionally, the research recommends that a policy be made to make it mandatory for the SMEs owners or managers to keep records of their business transactions.