Factors That Affect the Use of Accounting Services by Micro and Small Business Enterprises in Dembi Dollo Town Administration, Oromia, Ethiopia

Zewdu Eskezia Gelaye

doi:10.7176/rjfa/11-1-02

Abstract

The main objective of this study was to determine the factors that affect the use of accounting services by micro and small business enterprises in Dembi dollo town administration. To achieve this objective the necessary data was collected from micro and small business enterprise owners by using questionnaires. The study employed a mixed research approach i.e. both quantitative and qualitative research approaches. Stratified random sampling technique was used to select proportional number of samples from the target population of the study. The researcher used both descriptive and binary logistic regression analysis methods to analyze the raw data which was obtained from the respondents. The findings of the study was identified as family involvement with in the business operation and decision making, age of the enterprises, size of the enterprises, education level of the owners and knowledge and skill of the owners to use accounting services affects the use of accounting services by micro and small business enterprises in dembi dollo town administration. Based on the findings of the study, the researcher suggests that dembi dollo town micro and small enterprises office should give a basic business training to the concerned business enterprises about business entity concept, about the Peachtree software and its installation And finally the researcher suggests that the enterprises office should advice the owners of micro business enterprises to upgrade from micro to small because the owners of small enterprises are more likely to use accounting services than micro enterprise owners. Keywords : Accounting services, micro &small enterprises, family involvement, Competence, Inventory turnover period DOI : 10.7176/RJFA/11-1-02 Publication date: January 31 st 2020

Highlights

1.1 Back Ground of the Study Due to the environmental challenges that Small & Medium Enterprises (SMEs) face, SMEs require the assistance of a professional who will be able to identify competitive forces through the use of accounting services
Busieney & Mirie M., (2017) studies on the title of Factors influencing the use of accounting services by www.iiste.org small and medium enterprises and founds that poor knowledge and competence of the owners, high competition among the SMEs, low level of compliance with accounting legislation influences the use of accounting services in Kenya and In addition, the study findings revealed that SMEs did not use accounting services
Busieney & Mirie M., (2017) studies on the title of Factors influencing the use of accounting services by small and medium enterprises and founds that poor knowledge and competence of the owners, high competition among the SMEs, low level of compliance with accounting legislation influences the use of accounting services in Kenya and In addition, the study findings revealed that SMEs did not use accounting services

Summary

Introduction

1.1 Back Ground of the Study Due to the environmental challenges that SMEs face, SMEs require the assistance of a professional who will be able to identify competitive forces through the use of accounting services. A drop in profitability as shown by a profit and loss account would be a likely indicator of new entrants to the already competitive market. A variance analysis report would show how the budgeted compared to actual achieved and the institution of corrective mechanisms. A cash flow report would facilitate the identification of illiquidity. The use of an accountant by SMEs would be a strategic move to forestall the effect of any unseen environmental turbulence. An accountant would help the SME to manage its taxes (Jayabalan et al, 2009)

Objectives

Results

Conclusion