Proper accounting record keeping and performance of SMEs within the cape coast metropolis

Abstract

Scholars argue that the low performance of SMEs partly results from their inability to keep proper accounting records. Yet, extant literature addressing the effect of accounting record keeping on the performance of SMEs in the Ghanaiancontext is scanty. To bridge this gap, the present study sought to assess the effect of accounting record keeping on the performance of SMEs in the Cape Coast Metropolis. The study employed the quantitative research approach, descriptiveexplanatory research design, and cross-sectional survey design. Out of a sample size of 341, 288 completed and valid questionnaires were retrieved hence a response rate of 84.46%. The multi-stage sampling technique was used in selecting samples for the study. A semi-structured questionnaire was employed for data collection and it was self-administered. Descriptive and inferential statistics were used to analyse the data. Consistent with expectations, the study found that SMEs operating within the Cape Coast Metropolis scored low on the adequacy level of accounting record keeping. To add, the study revealed that the low adequacy level of accounting record keeping led to low performance among SMEs operating within the Cape Coast Metropolis. Additionally, it was discovered that the SMEs were faced with challenges that greatly hamper proper accounting record keeping. The study recommends that institutions that are responsible for improving the performance of SMEs, such as Business Advisory Services, National Board for Small Scale Industries, and Ghana Chamber of Commerce should provide support services to these enterprise’s in the area of proper accounting record keeping.