Abstract
Small and Medium Enterprises (SMEs) are important catalysts of economic growth, creating employment opportunities and contributing to the gross domestic product (GDP) of their respective countries. Unfortunately, SMEs suffer from a high failure rate due to SME managers’ lack of managerial knowledge and skills. SME managers also do not use performance measures which are important in business management and provide support to the managers in decision-making processes. This study contributes to the existing knowledge by determining that the use of a performance measurement tool is important in SMEs, as it can help to improve their performance and chances of survival. Accountants have the knowledge and skills to help SMEs to measure their performance and to achieve their business objectives. Accountants calculate financial ratios, explain the results and provide advice to SMEs. They, however, do not develop a Balanced Scorecard, although they perceive it to be beneficial to the SMEs.
Highlights
Small and medium enterprises (SMEs) play an important role in the global economy
Accounting practitioners can update their knowledge through seminars and training courses or by reading academic journals and articles published by professional bodies like South African Institute of Business Accountants (SAIBA)
The purpose of this study was to determine whether accountants assist SME managers in South Africa in using performance measurement tools
Summary
Small and medium enterprises (SMEs) play an important role in the global economy. SMEs are recognised as economic growth drivers, locally and globally. According to Abor and Quartey (2010:223), SMEs contribute roughly 50% of South Africa’s GDP, and 60% of those employed in South Africa are employed by SMEs. The classification criteria applied in determining whether an enterprise is to be classified as a SME or not, can vary from number of employees and annual turnover to gross fixed assets or number of products produced in a year (South African Revenue Service [SARS], 2010; Income Tax Act No 58 of 1962). The National Small Business Amendment Act No 26 of 2003 has numerous criteria to define a SME, but in general a business is classified as a SME if that business has fewer than 50 full-time employees, a total annual turnover of R13m or less and total gross assets of less than R5m
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