Accounting record keeping practices and growth of small and medium-sized enterprises: Evidence from Wassa Amenfi West Municipality

Abstract

The research aims to examine accounting record keeping practices and its association with growth of SMEs in Wassa Amenfi West Municipality. The specific objectives are: to determine the extent of accounting record keeping practices of SMEs in the Wassa Amenfi Municipal, examine the types of accounting records kept by SMEs in Wassa Amenfi West Municipal, determine whether entrepreneur characteristics affect accounting record keeping practices and assess the effect of accounting records keeping practices on SMEs growth. The research design adopted by the study was a descriptive research. A sample size of 205 out of the population of 453 SMEs in Wassa Amenfi was used. The study found out that accounting record keeping practices is related to the growth of SMEs in Wassa Amenfi West. It was revealed that there is a negative relationship between credit risk and profitability. The findings revealed that, the extent of accounting record keeping practices in Wassa Amenfi West is highly appreciable. The study found that with the exception of the businesses’ income statements, most of the SMEs do not keep records of statements of assets, liabilities and cash flows. Also, the type of accounting records kept are records on debtors. There was also an association between entrepreneurs’ educational level and accounting record keeping practices, accounting record keeping have an effect on the growth of SMEs in the Municipality. It is recommended that SME operators should ensure that they keep every form of accounting records on their business operations since it has an effects on their growth.