Accounting Record Keeping Practices in Small and Medium Sized Enterprise’s (SME’s) in Sri Lanka

M. W. Madurapperuma; P. M. C. Thilakerathne; I. N. Manawadu

doi:doi:10.11648/j.jfa.20160404.14

| Peer-Reviewed

Accounting Record Keeping Practices in Small and Medium Sized Enterprise’s (SME’s) in Sri Lanka

M. W. Madurapperuma, P. M. C. Thilakerathne, I. N. Manawadu

Published in Journal of Finance and Accounting (Volume 4, Issue 4)

Received: 12 April 2016 Accepted: 6 May 2016 Published: 14 June 2016

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

Small and Medium Enterprises (SMEs) play vital role in many countries including Sri Lanka, because of its role for the country's economic growth. This study discovers the level of awareness towards the importance of Accounting Record Keeping Practices and its information usage in the business. The research design is based on a survey methodology using a sample of systematically selected SMEs in Gampaha District in Sri Lanka. The target population comprised of 100 SMEs operating retail shops, manufacturing firms and supplier’s of various services in Gampaha district in Sri Lanka. It was concluded that the most of the SMEs do not keep complete accounting records because lack of accounting knowledge and the cost of hiring professional accountants. As a result, there is an inefficient use of accounting information to support financial performance measurement by SMEs. This made it difficult for the entrepreneurs to calculate their business profit efficiently. Lack of keeping of accurate records was highly blamed on the lack of skills in this field by the owners or managers. The study further revealed that the owners and managers of SMEs were highly willing to learn more about how to keep accurate records of their business transactions. The results of the study also revealed that majority of the SMEs encounter problems of lack of accounting knowledge. This study recommended that that the responsible authorities should come up with an effective programme for training for SMEs entrepreneurs.

Published in	Journal of Finance and Accounting (Volume 4, Issue 4)
DOI	10.11648/j.jfa.20160404.14
Page(s)	188-193
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

Accounting Practices, Accounting Information, Record Keeping, Small and Medium Enterprises (SME), Sri Lanka

References

[1]	Bohman, H., & Boter, H. (1984). Planning in small and medium sized firms - The challenges and premises of the strategic planning: Department of Business Administration and Economics, Umea University Sweden.
[2]	Cooley, P. L., & Charles, E. Edwards. (1983). Financial Objectives of Small Firms. American Journal of Small Business, 8 (1), 27-31.
[3]	Cooper, D. R., & Schindler, P. S. (2003). Business Research Methods (8th edition). USA: McGraw-Hill.
[4]	Cooper, D. R., & Schindler, P. S. (2006). Business Research Methods (9th edition). USA: McGraw-Hill.
[5]	auda, A., & Azeko, I. (2015). An Assessment of Financial Records Keeping Behaviour of Small Scale Businesses in Ghana: A Case Study of Bolgatanga Municipality, International Journal of Finance and Accounting, 4 (3), 187-194.
[6]	European Commission, E. (2008). Enterprise and Industry Directorate-General: Find Report of the Expert Group: Accounting system for small enterprises - Recommendations and good practices.
[7]	Germain, P. J. (2010). Top 10 Small business book keeping Tips. from http://ezinearticles.com
[8]	Howard, P. (2009). Good Recording Important for Sucessful Business: Angelo State University.
[9]	Ismail, N. A., & KIng, M. (2005). Firm performance and AIS alignment in Malaysian SMEs. International Journal of Accounting Information systems, 6 (4), 241-259.
[10]	Keasy, K., & Short, H. (1990). The Accounting Burdens facings small firms: an emprirical research note. Journal of Accounting Business Research, 20 (80), 307-313.
[11]	Maseko, N., & Manyani, O. (2011). Accounting Practices of SMEs in Zimbabwe: An Investigative study of record keeping for performance measurements - a case study of Bindura. Journal of Account and Tax, 3 (8), 171-180.
[12]	McMahon, R. G. P. (1999). Putting SME financial reporting into Theoritical and Practical perspective.. In R. p. s. 98-10 (Ed.). Flinder University South Australia, Adelaide.
[13]	Moore WC, Petty JW, Palich CH, Longernecker JG., 2008. Managing small business: An entrepreneurial emphasis, 14^th ed.
[14]	Ntim, A. L., Evans, O. Anthony, F. (2014). Accounting practices and control systems of small and medium size entities: A case study of Techiman municipility. Journal of Finance and Accounting. 2 (3), 30-40
[15]	Tucker, D., & Seluck, S. S.,. (2000). Which factors affec t entrepreneurial intentions of University Students? Journal of European Industrial Training, 33 (2), 142-159.
[16]	Wichman, H. (1983). Accounting and Marketing - Key small business problems. Journal of Small Business, 7 (4), 19-26.
[17]	Wichman H (1983). Accounting and marketing – key small business problems Journal of Small Businesses. Volume 7 (4): 19-26.38.
[18]	Yousef, A. S. (2013) The use of accounting information by Small and Medium Enterprises: A Case study of South district of Jordan: Journal of Finance and Accounting, Volume 4 (6) 2222-2847.
[19]	Zhou L., (2010). The Research on Issues and Countermeasures of Accounting Information of SMEs. International Journal of Business Management, Volume 5 (3): 223-225.
[20]	Zindiye S, Roberts-Lombard M, Herbst G., 2008. An empirical investigation into the factors affecting the performance of SMEs in the manufacturing sector of Harare, Zimbabwe. Fort Hare University.

Cite This Article

Plain Text BibTeX RIS

APA Style

M. W. Madurapperuma, P. M. C. Thilakerathne, I. N. Manawadu. (2016). Accounting Record Keeping Practices in Small and Medium Sized Enterprise’s (SME’s) in Sri Lanka. Journal of Finance and Accounting, 4(4), 188-193. https://doi.org/10.11648/j.jfa.20160404.14

Copy | Download

ACS Style

M. W. Madurapperuma; P. M. C. Thilakerathne; I. N. Manawadu. Accounting Record Keeping Practices in Small and Medium Sized Enterprise’s (SME’s) in Sri Lanka. J. Finance Account. 2016, 4(4), 188-193. doi: 10.11648/j.jfa.20160404.14

Copy | Download

AMA Style

M. W. Madurapperuma, P. M. C. Thilakerathne, I. N. Manawadu. Accounting Record Keeping Practices in Small and Medium Sized Enterprise’s (SME’s) in Sri Lanka. J Finance Account. 2016;4(4):188-193. doi: 10.11648/j.jfa.20160404.14

Copy | Download

@article{10.11648/j.jfa.20160404.14,
  author = {M. W. Madurapperuma and P. M. C. Thilakerathne and I. N. Manawadu},
  title = {Accounting Record Keeping Practices in Small and Medium Sized Enterprise’s (SME’s) in Sri Lanka},
  journal = {Journal of Finance and Accounting},
  volume = {4},
  number = {4},
  pages = {188-193},
  doi = {10.11648/j.jfa.20160404.14},
  url = {https://doi.org/10.11648/j.jfa.20160404.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20160404.14},
  abstract = {Small and Medium Enterprises (SMEs) play vital role in many countries including Sri Lanka, because of its role for the country's economic growth. This study discovers the level of awareness towards the importance of Accounting Record Keeping Practices and its information usage in the business. The research design is based on a survey methodology using a sample of systematically selected SMEs in Gampaha District in Sri Lanka. The target population comprised of 100 SMEs operating retail shops, manufacturing firms and supplier’s of various services in Gampaha district in Sri Lanka. It was concluded that the most of the SMEs do not keep complete accounting records because lack of accounting knowledge and the cost of hiring professional accountants. As a result, there is an inefficient use of accounting information to support financial performance measurement by SMEs. This made it difficult for the entrepreneurs to calculate their business profit efficiently. Lack of keeping of accurate records was highly blamed on the lack of skills in this field by the owners or managers. The study further revealed that the owners and managers of SMEs were highly willing to learn more about how to keep accurate records of their business transactions. The results of the study also revealed that majority of the SMEs encounter problems of lack of accounting knowledge. This study recommended that that the responsible authorities should come up with an effective programme for training for SMEs entrepreneurs.},
 year = {2016}
}

Copy | Download

TY - JOUR
T1 - Accounting Record Keeping Practices in Small and Medium Sized Enterprise’s (SME’s) in Sri Lanka
AU - M. W. Madurapperuma
AU - P. M. C. Thilakerathne
AU - I. N. Manawadu
Y1 - 2016/06/14
PY - 2016
N1 - https://doi.org/10.11648/j.jfa.20160404.14
DO - 10.11648/j.jfa.20160404.14
T2 - Journal of Finance and Accounting
JF - Journal of Finance and Accounting
JO - Journal of Finance and Accounting
SP - 188
EP - 193
PB - Science Publishing Group
SN - 2330-7323
UR - https://doi.org/10.11648/j.jfa.20160404.14
AB - Small and Medium Enterprises (SMEs) play vital role in many countries including Sri Lanka, because of its role for the country's economic growth. This study discovers the level of awareness towards the importance of Accounting Record Keeping Practices and its information usage in the business. The research design is based on a survey methodology using a sample of systematically selected SMEs in Gampaha District in Sri Lanka. The target population comprised of 100 SMEs operating retail shops, manufacturing firms and supplier’s of various services in Gampaha district in Sri Lanka. It was concluded that the most of the SMEs do not keep complete accounting records because lack of accounting knowledge and the cost of hiring professional accountants. As a result, there is an inefficient use of accounting information to support financial performance measurement by SMEs. This made it difficult for the entrepreneurs to calculate their business profit efficiently. Lack of keeping of accurate records was highly blamed on the lack of skills in this field by the owners or managers. The study further revealed that the owners and managers of SMEs were highly willing to learn more about how to keep accurate records of their business transactions. The results of the study also revealed that majority of the SMEs encounter problems of lack of accounting knowledge. This study recommended that that the responsible authorities should come up with an effective programme for training for SMEs entrepreneurs.
VL - 4
IS - 4
ER -

Copy | Download

Author Information

M. W. Madurapperuma

Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Kelaniya, Sri Lanka
P. M. C. Thilakerathne

Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Kelaniya, Sri Lanka
I. N. Manawadu

Department of Interdisciplinary Studies, University of Moratuwa, Moratuwa, Sri Lanka

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

M. W. Madurapperuma, P. M. C. Thilakerathne, I. N. Manawadu. (2016). Accounting Record Keeping Practices in Small and Medium Sized Enterprise’s (SME’s) in Sri Lanka. Journal of Finance and Accounting, 4(4), 188-193. https://doi.org/10.11648/j.jfa.20160404.14

Copy | Download

ACS Style

M. W. Madurapperuma; P. M. C. Thilakerathne; I. N. Manawadu. Accounting Record Keeping Practices in Small and Medium Sized Enterprise’s (SME’s) in Sri Lanka. J. Finance Account. 2016, 4(4), 188-193. doi: 10.11648/j.jfa.20160404.14

Copy | Download

AMA Style

M. W. Madurapperuma, P. M. C. Thilakerathne, I. N. Manawadu. Accounting Record Keeping Practices in Small and Medium Sized Enterprise’s (SME’s) in Sri Lanka. J Finance Account. 2016;4(4):188-193. doi: 10.11648/j.jfa.20160404.14

Copy | Download

@article{10.11648/j.jfa.20160404.14,
  author = {M. W. Madurapperuma and P. M. C. Thilakerathne and I. N. Manawadu},
  title = {Accounting Record Keeping Practices in Small and Medium Sized Enterprise’s (SME’s) in Sri Lanka},
  journal = {Journal of Finance and Accounting},
  volume = {4},
  number = {4},
  pages = {188-193},
  doi = {10.11648/j.jfa.20160404.14},
  url = {https://doi.org/10.11648/j.jfa.20160404.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20160404.14},
  abstract = {Small and Medium Enterprises (SMEs) play vital role in many countries including Sri Lanka, because of its role for the country's economic growth. This study discovers the level of awareness towards the importance of Accounting Record Keeping Practices and its information usage in the business. The research design is based on a survey methodology using a sample of systematically selected SMEs in Gampaha District in Sri Lanka. The target population comprised of 100 SMEs operating retail shops, manufacturing firms and supplier’s of various services in Gampaha district in Sri Lanka. It was concluded that the most of the SMEs do not keep complete accounting records because lack of accounting knowledge and the cost of hiring professional accountants. As a result, there is an inefficient use of accounting information to support financial performance measurement by SMEs. This made it difficult for the entrepreneurs to calculate their business profit efficiently. Lack of keeping of accurate records was highly blamed on the lack of skills in this field by the owners or managers. The study further revealed that the owners and managers of SMEs were highly willing to learn more about how to keep accurate records of their business transactions. The results of the study also revealed that majority of the SMEs encounter problems of lack of accounting knowledge. This study recommended that that the responsible authorities should come up with an effective programme for training for SMEs entrepreneurs.},
 year = {2016}
}

Copy | Download