Record keeping and performance of small and medium Enterprises. A case study of small and medium enterprises in Lugala.

Abstract

This study aimed to assess record keeping and the performance of SMEs, specifically looking at SMEs within Lugala. The study utilized primary data with a sample size of 50 respondents who were businesses owners / managers of SMEs in Lugala. Purposive sampling technique was used to select the respondents into the sample and a well-structured questionnaire was used to collect data from the respondents. The study registered a response rate of 100 percent. The three specific objectives utilized in this study were; to assess the relationship between the importance of record keeping among SMEs and the performance of SMEs, to examine the effect of the reasons for the reluctance in record keeping among SMEs and the performance of SMEs, and to examine the relationship between the strategies to improve record keeping among SMEs and the performance of SMEs. The result of the study established that the importance attached by SMEs on record keeping, reluctance of SMEs on record keeping, and strategies adopted to improve record keeping among SMEs were significant predictors of the impact of record keeping on the performance of SMEs. However, only 46.1 percent of the variation in the impact of record keeping on performance of SMEs was explained by the above variables. Therefore, the researcher recommends that further study should focus on investigating the impact of record keeping on the performance of SMEs using other independent variables not utilized in this study such as; the type of accounting system adopted, quality of the audit on the records, among others. The researcher also recommends that the government should enforce the registration of all SMEs, sensitization of all SMEs owners on the benefits of record keeping, as well as giving penalties to SMEs that do not keep proper books of accounts in order to improve record keeping among SMEs.