ASSESSING BOOKKEEPING PRACTICES OF SMALL AND MEDIUM SCALE ENTERPRISES
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ASSESSING BOOKKEEPING PRACTICES OF SMALL AND MEDIUM SCALE ENTERPRISES
ABSTRACT
The Nigerian economy is characterised by a huge number of micro enterprises, as well as small and medium-sized enterprises (SMEs). Most SMEs have the advantage of being easily formed because their capital, technology, management, and even utilities requirements are lower than those of large firms.
As a result, the small enterprise sector is one of Nigeria’s largest employers (second only to peasant agriculture) and has been identified as a key sector in job creation, income production, poverty alleviation, and industrial growth.
It is estimated that approximately 30 million businesses in the industry employ between 15 and 16 million people. Despite the immense potential of the private sector, inadequate record keeping has been cited as a barrier to its expansion in Nigeria.
Businesses are unable to maintain track of everyday operations, and banks are hesitant to lend to SMEs due to a lack of financial information. As a result, the purpose of this study is to investigate whether or not SMEs practise accounting, as well as the contributions of bookkeeping to SMEs’ growth in Uyo, Akwa Ibom State, Nigeria.
The study took into account a total population of 450, which included SMEs, 15 banks, and the SMEDAN office in the Local Government Area. From this figure, a simple random sampling procedure was utilised to pick 136 participants for the study.
The chi-square test was used at a significance level of 0.05 in the analysis using SPSS and E-views software. According to the study’s findings, 80.8% of SMEs practiced bookkeeping, with manual systems being the most commonly employed.
However, the recommendations were that SMEDAN be strengthened and adequately resourced by the government in order to provide support services in the area of organising effective training programmes for SMEs operators.
Another study outcome demonstrated that good bookkeeping processes might help SMEs succeed. There must also be extensive publicity in the local dialect through the mass media to raise awareness among SMEs about the importance of keeping accurate records.
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