The Role of Accounting on the Growth of Small and Meduim Sized Enterprises in Uganda Case Study: African Queen Limited

Abstract

This study focused on examining the role of Accounting on the Growth of SMEs in Uganda .It is built on the idea that accounting is a language very important is business and therefore all businesses from small family firms to the giant companies use it to ensure that they use their money wisely and plan for the future. It was guided by the objectives of: finding out the effect of ICS on the growth of SMEs, reviewing the impact of accounting documentation on the growth of SMEs and establishing the impact of budgeting on the growth of SMEs. Accounting was described in terms of ICS, Accounting documentation and budgeting whereas growth in terms of profitability, sales turnover and size of business (in terms of outlets).

The study was conducted at African Queen Limited and it relied mainly on Primary data obtained from questionnaires, interviews and document reviews of the selected literature. It employed both qualitative and quantitative techniques of data collection and data was analyzed using descriptive and relational statistics. The researcher used a population of fifty four (54) and a sample size of forty seven (47); out the total sample only data from 83% was analyzed and interpreted to come up with the overall findings of the research.

Par the findings, it was revealed that the organization had strong internal control mechanisms and it properly documented its transactions and maintains proper books of accounts among which included the Cash book, General Ledger , Asset register, creditor’s and debtor’s books. The findings also revealed that budgeting was regularly done at AQL and there was an officer specifically concerned with the budget though all the activities stipulated in the budget were not fully met.

Due to failure to meet all activities as stipulated in the budget, the researcher recommended that proper measures should be taken by management of the organizations to ensure that all activities in the budget are met and the budget is followed and maintained throughout the financial year. The researcher recommended that all the key stake holders affected by the budget should be involved in the entire process right from the planning to the implementation phase budgeting. The researcher also recommended areas for further study among which include conducting a comparative study to ascertain why and how some businesses (for example those in kikuubo business area) which don’t necessarily maintain proper books of accounts have managed to sustain themselves in business over the years.

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