An Assessment of Book Keeping Practices Among Small and Medium Scale Enterprises in Kumasi Metropolis

ABSTRACT

The relevance of keeping proper books of accounts and sound accounting practices has been emphasized in achieving proper financial management in Small and Medium Scale Enterprises. In this study, we investigate the recording of proper books of account by SMEs in Kumasi (Ghana) through information based on responses to a close- ended questionnaire from 90 SMEs in Kumasi.

We report that majority of SMEs’ owners were academic inclined, and also had at least an average level of accounting. This then contributed to the reason why most of these SMEs kept proper books of account.

It is therefore recommended that SMEs operators should obtain basic accounting knowledge to help them keep some records appropriately and where possible engage the services of SMEs accounting Professionals who will help the business keep proper accounting record and prepare the needed financial report at a least cost for the business, financial intermediaries and for other stakeholder usage. Since most of the respondents seem not to support attempts of making it mandatory to maintain proper accounting records and subsequently produce final accounts, we recommend that accounting record in SMEs become mandatory. The government should put measures in place to ensure that proper records keeping are kept by SMEs which will ensure that business declares the accurate income generated. In ensuring this, the necessary legal measures and adequate monitoring must also be put in place to ensure its compliance.