Financial Management Practices of Small Firms in Ghana: An Empirical Study

Abstract

The contribution of small firms to the national budget seems to be negligible as a result of their inability to prepare financial reports. The factors that motivate the sample firms in the Ashanti Region of Ghana in pursuing sound financial management practices are: - Pressure from bankers (90%) - Pressure from external accountants (80%) - Pressure from providers of capital (70%) The factors that prevent them from practising sound financial management practices were: - Qualified accountants too expensive to maintain (93%) - Accounting records too difficult to understand (87%) - Lack of internal accounting staff (73%)