Accounting skills and the sustainability of Small and Medium Enterprises in South Africa
Keywords:
Financial Record; Bookkeeping; Viability; Sustainability; Small businessesAbstract
The objective of this study is to examine the accounting skills and sustainability of small-medium-enterprises. The quantitative research method was adopted for this study and the purposive sampling technique was chosen to select the participants for this study. The study collected primary data from respondents who are owners of SMEs in the retail, construction, manufacturing sectors, etc. Data was analysed using SPSS. A total of 310 research questionnaires was administered and 304 research questionnaires were returned for analysis (giving a 98% response rate). A regression analysis and Pearson’s correlation analysis were conducted. The outcome of Pearson’s correlation shows moderate correlation (r value is 0.531) between accounting skills and sustainable SMEs. There is also a significant effect of accounting skills on sustainability as revealed in p-value <0.0005. Thus, it was concluded that SME owners need more accounting training or bookkeeping awareness. This is because training will equip SMEs owners with the needed skills to ensure accurate recording of business transaction which is beneficial when the need for financial assistance from banks or other financial institution arises.
References
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Sejkora, F. and Hromuľáková, P., 2019. Record keeping for individual entrepreneurs in the Czech Republic. In European Financial Systems 2019: Proceedings of the 16th International Scientific Conference. Masarykova univerzita.
Tuffour, J.K., Amoako, A.A. and Amartey, E.O., 2020. Assessing the effect of financial literacy among managers on the performance of small-scale enterprises. Global Business Review, p.0972150919899753.
Woolson, R.F., Bean, J.A. and Rojas, P.B., 1986. Sample size for case-control studies using Cochran's statistic. Biometrics, pp.927-932.
Yanto, H., Handayani, B.D., Solikhah, B. and Mula, J.M., 2016. The Behavior of Indonesian SMEs in Accepting Financial Accounting Standards without Public Accountability. International Journal of Business & Management Science, 6(1): 43-62.
Ajakaiye, O.O., Afolabi, H.A., Akinola, A.O., Okagbue, H.I., Olagunju, O.O. and Adetoro, O.O., 2018. Datasets on factors influencing trading on pedestrian bridges along Ikorodu road, Lagos, Nigeria. Data in brief, 19, pp.1584-1593.
Aksoy, H., 2017. How do innovation culture, marketing innovation and product innovation affect the market performance of small and medium-sized enterprises (SMEs)? Technology in Society, 51(4), pp.133-141.
Aladejebi, O. and Oladimeji, J.A., 2019. The impact of record keeping on the performance of selected small and medium enterprises in Lagos metropolis. Journal of Small Business and Entrepreneurship Development, 7(1), pp.28-40.
Anderson, S.J., Chandy, R. and Zia, B., 2018. Pathways to profits: The impact of marketing vs. finance skills on business performance. Management Science, 64(12), pp.5559-5583.
Bushe, B., 2019. The causes and impact of business failure among small to micro and medium enterprises in South Africa. Africa’s Public Service Delivery and Performance Review, 7(1), pp.1-26.
Ciemleja, G. and Lace, N., 2011. The model of sustainable performance of small and medium-sized enterprise. Engineering economics, 22(5): 501-509.
Demirel, P. and Danisman, G.O., 2019. Eco‐innovation and firm growth in the circular economy: Evidence from European small‐and medium‐sized enterprises. Business Strategy and the Environment, 28(8), pp.1608-1618.
Hillman, A.J., Withers, M.C., and Collins, B.J., 2009. Resource dependence theory: A review. Journal of management, 35(6): 1404-1427.
Hoaglin, D.C., 2016. Misunderstandings about Q and ‘Cochran's Q test'in meta‐analysis. Statistics in medicine, 35(4), pp.485-495.
Hossain, M.M., 2020. Financial resources, financial literacy and small firm growth: Does private organizations support matter? Journal of Small Business Strategy, 30(2): 35-58.
Howcroft, D., 2017. Graduates’ vocational skills for the management accountancy profession: exploring the accounting education expectation-performance gap. Accounting Education, 26(5-6), pp.459-481.
Karapinar, M., Baskurt, F., Baskurt, Z., Gunal, A. and Kockar, M.C., 2020. Reliability and Validity of the Turkish Version of the Oxford Participation and Activities Questionnaire in Older People. Annals of geriatric medicine and research, 24(4), p.282.
Kgosana, C., 2013. Small businesses failure rate high. Sowetan (online), May 16, p.2013.
Kuruvilla, R.R. and Harikumar, P.N., 2018. A study on the financial awareness among women entrepreneurs in Kottayam district. Journal of Management Research and Analysis, 5(3): 331-335.
Langa, M.T. and Govender, K.K., 2019. The Need for Agile Relationship Lending between Small Business and Banks, towards a More Engaged Relationship: A Case Study in Khayelitsha, South Africa. Asian Business Research Journal, 4: 29-34.
Li, J., Woods, J. and Wu, D., 2020. The impact of accounting training on small business performance and new technology adoption. International Journal of Management Practice, 13(1), pp.23-46.
Lucato, W.C., Costa, E.M. and de Oliveira Neto, G.C., 2017. The environmental performance of SMEs in the Brazilian textile industry and the relationship with their financial performance. Journal of environmental management, 203: 550-556.
Madurapperuma, M.W., Thilakerathne, P.M.C. and Manawadu, I.N., 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.
Mamabolo, M.A., Kerrin, M. and Kele, T., 2017. Entrepreneurship management skills requirements in an emerging economy: A South African outlook. The Southern African Journal of Entrepreneurship and Small Business Management, 9(1), pp.1-10.
Marsidi, A., 2019. Sustainable supply chain management of Malaysian small business: Accounting perspective. International Journal of Supply Chain Management, 8(4): 596-600.
Napier, C.J., 2013. English-language theories of financial reporting. The Routledge Companion to Accounting, Reporting and Regulation. Abingdon: Routledge, 93-109.
Ngek, N.B., 2016. Performance implications of financial capital availability on the financial literacy–performance nexus in South Africa. Investment management and financial innovations, 13 (2): 354-362.
Nwokike, F.O., 2018. Promoting Entrepreneurship in Business Education Programme in Universities In South East Nigeria. Nigerian Journal of Business Education (NIGJBED), 4(1), pp.123-134.
Nyathi, K.A., Nyoni, T., Nyoni, M. and Bonga, W.G., 2018. The role of accounting information in the success of small & medium enterprises (SMEs) in Zimbabwe: A case of Harare. Journal of Business and Management (DRJ-JBM), 1(1), pp.01-15.
Okoye, E.I., Uniamikogbo, E.O. and Sunday, A.A., 2017, July. Accounting Skills for Sustainable Entrepreneurial Development: A Study of Selected Small and Medium Scale Enterprises in Edo State, Nigeria. In The 2017 International Conference on African Entrepreneurship and Innovation for Sustainable Development (AEISD).
Onoh, C. and Idakwo, M., 2017. Strategies for Enhancing Economic Growth Through Functional Entrepreneurship Education Among Graduates of Business Education in Kogi State. International Technology Research Journal, 5(1).
Putra, Y.M., 2019. Analysis of Factors Affecting the Interests of SMEs Using Accounting Applications. Journal of Economics and Business, 2(3).
Rofiat, A., 2017. The effect of cashless banking on the financial performance of small and medium scale enterprises. International Journal of Advanced Research in Public Policy, Social Development and Enterprise Studies, 2(2): 133-142.
Santhi, N. and Kumar, S.R., 2011. Entrepreneurship challenges and opportunities in India. Bonfring International Journal of Industrial Engineering and Management Science, 1(Special Issue Inaugural Special Issue), pp.14-16.
Sarwoko, E. and Frisdiantara, C., 2016. Growth determinants of small medium enterprises (SMEs). Universal Journal of Management, 4(1):36-41.
Saunila, M., 2016. Performance measurement approach for innovation capability in SMEs. International Journal of Productivity and Performance Management. 65 (2), pp. 162-176.
Sejkora, F. and Hromuľáková, P., 2019. Record keeping for individual entrepreneurs in the Czech Republic. In European Financial Systems 2019: Proceedings of the 16th International Scientific Conference. Masarykova univerzita.
Tuffour, J.K., Amoako, A.A. and Amartey, E.O., 2020. Assessing the effect of financial literacy among managers on the performance of small-scale enterprises. Global Business Review, p.0972150919899753.
Woolson, R.F., Bean, J.A. and Rojas, P.B., 1986. Sample size for case-control studies using Cochran's statistic. Biometrics, pp.927-932.
Yanto, H., Handayani, B.D., Solikhah, B. and Mula, J.M., 2016. The Behavior of Indonesian SMEs in Accepting Financial Accounting Standards without Public Accountability. International Journal of Business & Management Science, 6(1): 43-62.
Published
2021-02-02
How to Cite
Olarewaju, O., & Msomi, T. (2021). Accounting skills and the sustainability of Small and Medium Enterprises in South Africa: Array. The Journal of Accounting and Management, 11(1). Retrieved from https://dj.univ-danubius.ro/index.php/JAM/article/view/779
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