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