Effects of Financial Record Keeping on the Financial Performance of Small Enterprises in the Sekondi Takoradi Metropolis

Abstract

ABSTRACT The study examined the effect of financial record-keeping on the financial performance of small enterprises in the Sekondi-Takoradi metropolis. The study employed the quantitative research approach. A total of 288 small enterprises who have registered with the Ghana Enterprises Agency in the Sekondi-Takoradi Metropolitan Assembly office formed the population. The Statistical Product and Service Solutions software and SMART Partial Least Square softwares were employed for the data analysis given the techniques embedded in these applications. Out of the number, 165 small enterprises were selected as the sample. The study revealed that small enterprises in the Sekondi-Takoradi metropolis are challenged greatly with mixing up records in relevant books, high cost of employing accountants, failure to predict income and expenditure for budgeting purposes, inability to keep up to date financial records in a realistic manner, and lack of knowledge on how to keep financial records. The level of performance of small enterprises is best described as being moderately improved especially when it comes to receiving money from clients/customers on time, effective allocation of resources, and receiving goods from suppliers on time. Only storage and retrieval practices made statistically significant positive contributions to predicting the positive moderate improvement in the performance of small enterprises in the metropolis. It was recommended that training programs should be organized by accounting firms operating in Ghana for owners and managers of small enterprises so that such enterprises could ingrain in their operations, proper record-keeping practices, systems, and protocols to better position them.