Accounting Practices of SMEs: A Case Study of Kumasi Metropolis in Ghana

Abstract

The importance of maintaining proper books of accounts and sound accounting practices has been emphasisedin ensuring proper financial management in SMEs. In this study, we investigate the record keeping strategiesutilized by SMEs in Kumasi (Ghana) through data based on responses to a structured questionnaire from 210SMEs in Kumasi. We report that majority of SMEs fail to maintain complete accounting records as they thinkthere is no need to keep accounting records and that it exposes their financial position. It is recommended thattraining programmes must be organised to sensitize owners/managers on the need to maintain proper books ofaccounts. The government should also come out with the necessary legal instruments to make the preparation ofproper books of accounts mandatory in order to improve SMEs practice of accounting in Ghana.