Certain Aspects of the Management Accounting System for Small and Medium-Sized Enterprises

Oleg A. Diegtiar,Yuriy O. Tararuyev,Tetiana O. Suslova,Oleksandr V. Bezuhlyi,Tetiana V. Romanchenko

doi:10.13189/ujaf.2021.090321

Abstract

The importance of sustaining small and medium-sized enterprises (SMEs) around the world is increasing rapidly each year. In modern days many countries try to develop methods to preserve this type of companies given recent global crisis. SMEs in the Ukrainian economy account for 99.98% of the total business population. Relevance of this study consists in the significant role of the SMEs in the structure of national economy and their importance in development of the modern domestic economic systems. Objectives of the study are to determine prospects, shortcomings and features of establishing management accounting practices (MAPs) in SMEs. The problem of the study consists in fragmentation of the knowledge in the literature relating to management accounting practices in small and medium sized enterprises and problems of establishing them, due to restriction of resources and particularly wide gap between management accounting theory and practice compared to larger companies. Trends in the small and medium-sized enterprises in the structure of the national economy and their role in the development of the domestic economic system can be predicted on the basis of several reviewed cases. This confirms the relevance of the analysis of the management accounting system of economic entities in order to determine financial reserves to ensure economic activity in a crisis. Automated parametric control systems have been developed and proposed for implementation as elements of management accounting in order to provide processes for planning, monitoring and controlling of operational processes, as well as provide information and analytical support for management decision-making as a result of this study.

Highlights

In the context of crisis events in the economy, associated with negative trends in the level of financial and economic support for business processes through quarantine, caused by the coronavirus epidemic, as one of the urgent global challenges for the world economy, an important aspect of management ensures the strategic path of development of the enterprise in an unstable external environment [1; 2]
The high tax burden is a significant problem for the development of small and medium-sized enterprises in Ukraine, which especially significantly affected the development of business in the conditions of lower revenues and higher costs for marketing events, which is associated with the complication of consumer search processes in the conditions of transition to the “online” [3; 4]
Significant challenges in implementing management accounting system in small and medium-sized enterprises are: lack of financial capabilities and understanding of the effectiveness of the implementation of the management accounting system by business owners, as well as understanding the prospects of management accounting to provide opportunities for strategic development; economic instability, which affects significantly the processes of planning and control of actual and planned indicators of the financial and economic activity of the enterprise; the specificity of small and medium-sized enterprises indicates that they are unable to perform a number of functions that could ensure greater efficiency in their management accounting, in particular, influence pricing limits, demand or supply for their own products or services

Summary

Introduction

In the context of crisis events in the economy, associated with negative trends in the level of financial and economic support for business processes through quarantine, caused by the coronavirus epidemic, as one of the urgent global challenges for the world economy, an important aspect of management ensures the strategic path of development of the enterprise in an unstable external environment [1; 2]. In the context of crisis events and high financial risks, the establishing of a management accounting system for small and medium-sized enterprises is of particular relevance in order to ensure the effectiveness of the management functions of planning, organizing and controlling operational processes, as well as to provide a strategic vector for the development of economic entities in case of instability and the need for organizational transformations. The theme of improving the efficiency of management accounting has always been of high relevance and attracted the attention of researchers, which is associated with the need to transform the management system in accordance with the requirements and changes of the external environment for the economic entity. Despite the authors' attention to the issue of building a management accounting system due to significant changes in the external environment, it is necessary to modernize approaches to establishing a management accounting system [9,10,11]

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