Effect of budgetary control on financial performance of selected small and medium-sized entreprises in the transport industry

Abstract

The current study sought to investigate the effect of budgetary control on financial performance of selected small and medium-sized enterprises in the transport industry in Accra. The specific objectives of the study were: to ascertain evidence of budgetary control practices in the selected firms; to examine the relationship between budget planning and financial performance; analyse the effect of monitoring and control on financial performance; and to examine the relationship between budgetary control and financial performance. Data on financial performance were sourced from financial statements of the selected firms, while data on budgetary control were sourced from questionnaires administered to employees in the selected firms, signifying that, both primary and secondary data sourced were employed. Research approach was quantitative and research design was explanatory. The multi-stage sampling method was adopted to select samples for the study. The selected firms were Aaron‟s Home Removals, Secure Travel and Tours, De-Genesis Travel and Tours Limited, Grassroots Tours Ghana, Silverwhite Groopp Inc., Netplink Travel Consult, Educate Global Limited, Africa Express Travelling and Tour Agency, West Travel and Tour, and Easy Travel Consult. Data collected were analysed using both descriptive and inferential statistical techniques, using Statistical Package for Social Sciences Software for windows, version 22. Multiple regression analysis revealed a positive significant relationship between budgetary control and financial performance in the selected firms. The study, therefore, concluded that better planning and control helps to improve the financial health of small businesses in the transport industry, potentially reducing business failures and job losses. The study recommends that staff should be trained on other budgetary control techniques, such as participatory budgeting, to enhance business decision making and improve efficiency and productivity. Future research should consider modelling the moderating role of financial knowledge in the relationship between budgetary control and financial performance in small businesses.