ABSTRACT A number of small scale enterprises are coming up significantly but their operation is shmi lived because the small business operators are not keen on keeping their business records which are useful in the evaluation of the performance. Small businesses are uniquely susceptible to disaster or incomplete records results in huge taxes being levied on small business operators denying them a chance to access loans, grants and funding. Records are essential elements of an organization in this competitive world; for any business to succeed; it needs to have accurate reliable and timely records. Therefore records are paramount to every organization whether small or big as they help businesses to raise funds from donors, investors, and the general public to portray the true image of the business. It is seen that most companies and small business operators in Africa are found not keen on keeping records which quite often make tax assessment difficult. Business records are considered as a basis for business men to accurately analyze the performance of their firms in order to make appropriate decisions concerning their business. This paper will attempt the following; types of records kept by small scale businesses, importance of record keeping in small scale enterprises, Performance indicators among small scale enterprises, relationship between record keeping and the performance of small scale enterprises, the challenges faced due to poor record keeping, possible solutions and give recommendations.
TABLE OF CONTENTS
DECLARATION ......................................................... : ........................................................... i
APPROVAL ........................................................................................................................... ii
DEDICATION ....................................................................................................................... iii
ACKNOWLEDGEMENT ..................................................................................................... iv
ABSTRACT ........................................................................................................................ viii
CHAPTER ONE ...................................................................................................................... 1
INTRODUCTION ................................................................................................................... 1
1.0 INTRODUCTION ............................................................................................................. 1
1.1 BACKGROUND ............................................................................................................... 1
1.2 Statement of the problem ................................................................................................... 2
1.3 The purpose of the study .................................................................................................... 3
1.4 Objective of the study ......................................... · ............................................................... 3
1.5 Research Questions ............................................................................................................ 3
1.6 Scope of the study .............................................................................................................. 3
1.6.1 Subject scope .................................................................................................................. 3
1.6.2 Geographical scope ......................................................................................................... 3
1.7 Significance of the study ................................................................................................... 4
1.8 Conceptual framework ....................................................................................................... 5
CHAPTER TWO ...................................................................................................................... 6
LITERATURE REVIEW ........................................................................................................ 6
2.0 Introduction ........................................................................................................................ 6
2.1 r mportance of record keeping in small scale enterprises ................................................... 6
2.1.0 Record keeping ................................................................................................................ 6
2.1.1 Importance ofrecord keeping in small scale enterprises ................................................ 6
2.1.2 Accounting records ................................................. : ....................................................... 7
2.1.3 The accounting process/ cycle ............... '. ............... : ........................................................ 7
2.1.4 Accounting report ........................................................................................................... 8
2.1.6 Features of small scale enterprises ................................................................................. 9
2.1. 7 Definition of business performance ................................................................................ 9
2.1.8 Book keeping and business performance ....................................................................... 9
2.1.9 Book keeping and financial management .............. : ........................................................ 9
2.1.10 Book keeping and taxation ......................................................................................... 10
2.2 Performance indicators among small scale enterprises ................................................... 10
2.2.1 Performance indicators ................................................................................................. I 0
2.2.2 Business growth ............................................................................................................ I 0
2.2.3 Growth in productivity ............................... : ................................................................. 11
2.3 Relationship between record keeping and the performance of small scale enterprises ... 12
2.4 Conclusion ....................................................................................................................... 13
CHAPTER THREE ............................................................................................................... 14
METHODOLOGY ................................................................................................................ 14
3.0 Introduction ............................................................•......................................................... 14
3 .1 Research design ......................................................... : ..................................................... 14
3.2 Study Population ....................................................... : ...................................................... 14
3.3 Sample Size ..................................................................................................................... 14
3 .4 Source of data ..................................................................................................... ' ............. 14
3.4.1 Primary data source ...................................................................................................... 14
3.4.2 Secondary data source .................................................................................................. 15
3.5 Data collection methods and instruments ...... .' ................................................................. 15
3.5.1 Questionnaires .............................................................................................................. 15
3.5.2 Documentary Review ................................................................................................... 15
3. 7 Data processing and analysis ........................................................................................... 15
3.8 Limitations of the study ..................................... .' ............................................................. 15
CHAPTER FOUR ....................................................... : ......................................................... 16
PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS ..................... 16
4.0 Introduction ...................................................................................................................... 16
4.1 Demographic characteristics ............................................................................................. 16
4.1.1 Gender. .......................................................................................................................... 16
4.1.2 Age bracket ................................................................................................................... 17
Table 2: showing the age composition of respon~ents .......................................................... 17
4.1.3 Education level ............................................................................................................. 17
Table 3: showing the level of education attained by the different respondents ..................... 17
4.1.4 Working experience ...................................................................................................... 18
Table 4: showing working experience ofrespondents .......................................................... 18
4.2 Record keeping ................................................................................................................ 18
4.2.1 Credit sales and purchase records ........................... ,. ..................................................... 18
4.2.2 Cash sales and purchase records ................................................................................... 19
4.2.3 Expense ledger ................................................................................................. ,. ............ 20
4.2.4 Stock and asset records ................................................................................................. 20
4.3 Customers ........................................................................................................................ 21
4.3.1 Factors that affect business performance ..... ,. ................................................................ 22
4.4 The relationship between records keeping and business performance ........................... .23
4.4.1 Receipts ......................................................................................................................... 23
4.4.2 Vouchers ....................................................................................................................... 23
4.4.3 Cash books .................................................................................................................... 24
4.4.4 Income statements ........................................................................................................ 24
4.5 Record keeping on business performance ................. : ..................................................... 24
4.6 The relationship between records keeping·and performance of business enterprises .... .25
CHAPTER FIVE ................................................................................................................... 26
DISCUSSION, CONCLUSION AND RECOMMENDATIONS .......................................... 26
5.1 Introduction ...................................................................................................................... 26
5 .2 Summary of findings ....................................................................................................... 26
5.3 Conclusion ........................................................................................................................ 27
5.4 Recommendations ............................................................................................................ 27
5.5 Areas for fu1iher study ..................................................................................................... 28
REFERENCES ...................................................................................................................... 29
APPENDICES ........................................................................................................................ 31
APPENDIX I QUESTIONNAIRE ........................................................................................ 31
APPENDIX II INTRODUCTORY LETTER ................. : ..................................................... 36
