The Effect of Book Keeping on The Performance of Finanacial Institutions. Case Study of Iqtgum Cooperative Savings and Credit Society (Sacco)

ABSTRRACT

The topic of the study was to assess the effects of book keeping on the performance of financial institution. The researcher used the case study of Kitgum cooperative savings and credit society

(SACCO). The study was guided by three objectives (i) To find out the effects of account preparation on performance of financial institution; (ii) To find out the effect of inventory and budget control on performance of financial institution; and (iii) To find out the effect of record keeping on the performance financial instituti~ns.

Data was collected from 36 respondents using self administered questionnaires as the key data collection instruments. The finding revealed that book keeping is primarily necessary for the

better financial performance of an organization, it fmiher also indicated that proper book keeping minimizes to the loss of organization funds, minimizes corruption, it all provides information for easy follow up when a need a rises. The study also revealed that book keeping played a fundamental role in the performance of financial institution. Because it enabled proper

accountability for the assets, proper accountability of all the cash payments and receipts made on the basis of proper documentation and it also helped the management in ensuring that they were

working towards the achievement of their objectives. According to the findings, the researcher recommends the following; The managem.ent of Kitgum SACCO should improve on the

enforcement procedures that are attached to bookkeeping by ensuring that any transaction that any transactions should be properly recorded in the final books of accounts, this was based on

the information that was obtained concerning account preparation and performance. On maintenance of financial records, the management should provide a safe custody of all the

documents of Kitgum SACCO and this can be achieved by filling all the relevant documents and putting them in a safe place to avoid them being stolen of being accessed by illegal persons.

Concerning budgetary and inventory control, the management of Kitgum SACCO should aim at operating a surplus budget to avoid being affected by a deficit budget by ensuring that the incomes are more than the expenditures. The management should also adopt bettei· inventory control methods and should specify clearly the procedure they follow in giving and ordering for materials, therefore it can apply methods like ·the LIFO, and FIFO.

TABLE OF CONTENT

DECLARA 1'ION .......................................... ............................................................................ i

APPROVAl~ .................................................................................................................................. ii

DEDI(:A'fiON ......................................................................................................................... iii

ACKNOWLEDGEMEN1' .......................................................................................................... iv

I~IS1' OF 1'ABLES .......................................................................................................................

(:IIAP'fER ONE: IN1'RODUC1'ION .......................................................................................... !

1.0 Introduction .......................................................................................... .' ................ 1

1.1 Background to the Study ........................................................................................................... 1

1.1.1 I-Iistorical Perspective ............................................................................................................. 1

1.1.2 Theoretical Perspective ............ ; .............................................................................. 2

1.1.3 Conceptual Perspective ........................................................................................................... 2

1.1.4 Contextual Perspective ........................................................................................................... 3

1.2 Problen1 staten1ent. .................................................................................................................... 4

1.3 Objectives ofthe study .............................................................................................................. 5

1.3.1 General objective ........................................................................................................ 5

1.3 .2 Specific objectives ................................................................................................................ 5

1.4 l~esearch questions ..................................................................................................................... 5

1.5 Scope ofthe study ................................................................................................................... 5

1.5.1 Content scope .......................................................................................................................... 5

1.5.2 Geographical scope ................................................................................................................ 5

1.5 .3 Ti1ne scope ............................................................................................................................. 6

1.6 Significance ofthe study ....................................................................................................... 6

1 . 7 Conceptual fra1ne work ............................................................................................ 7

CHAP1'ER TWO: LITERATURE REVIEW ............................................................................. 8

2.0 Introduction ................................................................................................................................ 8

2.1 Related Literature Review ......................................................................................................... 8

2.1.1 Accounting book keeping Concept. ........................................................................................ 8

2.1.2 Types of Bookkeeping ............................................................................................................ 9

2.1.3 Duties of a book keeper. ....................................................................................................... I 0

2.1.4 Problems associated with double bookkeeping .................................................................... 11

2.2 Theoretical Review ................................................................................................................ I 2

2.3 Conceptual Review .................................................................................................................. 13

2.3 .1 Effects of account preparation on performance of financial institutions .............................. I 3

2.4 Effect of inventory and Budget control on performance of financial institutions ................... 15

2.5 Effect of Maintenance of financial records on performance of financial institutions ............. 19

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2.5.1 Importance of record keeping ............................................................................................... 20

CHAPTER THREE: METHODOLOGY ................................................................................. 22

3.0 Introduction .............................................................................................................................. 22

3. I Research design .................................................................................................................... 22

3.2 Target population ................................................................................................................. 22

3.3 Satnple size ............................................................................................................................. 23

3. 4 San1pling techniques ............................................................................................................. 23

3.5 Research instrtunent ............................................................................................................... 24

3.5.1 Questionnaires ................................................................................................................. 24

3.5.2 Before administration of questionnaires ............................................................................... 24

3.5.3 During administration of questionnaires .............................................................................. 24

3.5 .4 After administration of questionnaires ................................................................................. 24

3.6 Interview n1ethod .............................................................................................................. 25

3. 7 Sources of data .......................................................................................................................... 25

3.7.1 Prin1ary data .......................................................................................................................... 25

3.7.2 Secondary data ................................................................................................................. 25

3.8 Measuring the validity and reliability ..................................................................................... .25

3. 9 Analysis of data ....................................................................................................................... 26

3.10 Ethical consideration ........................................................................................................... 26

3.11 Limitations of the study ....................................................................................................... 27

3.12 Solutions to the problems .................................................................................................... 27

CHAPTER FOUR: PRESENTATION AND INTERPRETATION OF THE FINDINGS .. 29

4.0 Introduction ............................................... : .............................................................................. 29

4.1 Variance in the targeted and actual respondents ..................................................................... .29

4.2 Demographic characteristics of the respondents ..................................................................... 29

4.3 Presentation of other findings .................................................................................................. 36

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ............. 39

5.0 Introduction .............................................................................................................................. 39

5.1 sun11nary ............................................................................................... .' .............. 39

5.3 Conclusion ............................................................................................................................... 40

5.4 Recon1endations ................................................................................................................... 40

5.3 Areas for ftniher study ......................................................................................................... 41

REFERENCES ............................................................................................................................ 42

APPENDICES: ............................................................................................................................ 45