Bookkeeping Practices and Growth of Small and Medium Enterprises: A Case of Selected SMEs in Mbale City, Uganda
DOI:
https://doi.org/10.55047/transekonomika.v6i5.1267Keywords:
Bookkeeping, Double Entry, Financial Performance and Growth, Single EntryAbstract
Backgrounds: The importance of adequate financial records for SME financial and operational performance and growth cannot be overemphasized, as they are vital for several purposes, including credit access from financial institutions. Good bookkeeping also helps business owners understand their financial position, manage daily operations, and make informed business decisions.
Objectives: This study explored the effect of bookkeeping on the growth of SMEs in Mbale city, Uganda. Specifically, it examined the connection between single-entry bookkeeping routines and SME growth, and assessed the effect of double-entry bookkeeping practices on SME growth.
Methodology: The study adopted descriptive and explanatory research designs. A total of 55 SMEs in Mbale city were randomly selected, and 55 self-administered questionnaires were distributed, all of which were returned (100% response rate). Data were analyzed using regression and Spearman’s correlation in SPSS.
Findings: The study findings show that the use of single-entry bookkeeping practices (p=0.099) does not significantly impact on the growth of small and medium enterprises while the use of double entry practices of bookkeeping (p=0.000 and coefficient=1.041) had positive and significant association with growth of small and medium enterprises.
Conclusions: Bookkeeping practices, particularly double-entry bookkeeping, play an important role in supporting SME growth. The study recommends that SME owners be encouraged to adopt double-entry bookkeeping as part of their routine operations to maintain accurate and reliable financial records, improve financial management, and make better decisions that support business growth.
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