Abstract

This study was aimed at the impact of booking keeping on the performance of small and medium-size enterprises in Buea, case of Njeiforbi. To meet up with the broad coverage of the work, it was thus broken down into three specific objectives, which were; to find out the types of records kept for effective management of Njeiforbi Bakery, to examine the problems associated with bookkeeping in Njeiforbi and to investigate the factors that affects the performance of Njeiforbi. An initial hypothesis was also developed that Records kept has no significant effects on the performance of Njeiforbi The study used a descriptive survey design with a population of the study consisting of the employees of Njeiforbi.

Data were collected from 30 respondents using questionnaires. The data were analyzed by SPSS. The demographics questionnaires were analyzed by simple descriptive statistics presented in frequency tables. The hypothesis was tested using chi-square. The results reveal that bookkeeping has an overall significant effect on the performance of Njeiforbi bakery, Buea.

The results further show that that Njeiforbi keeps business accounting record such as cash receipts sales, purchases, creditors and debtors vouchers, purchases and sales ledger, cash book, revenue and expenditure accounts, statement of income and balance sheet. The study recommends that Operators of small scale business units need to ensure that complete and accurate business records are kept because they are essential for decision making.

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

The value of small and medium-size enterprises (SMEs) in any economy cannot be overstated. In most countries, small and medium-size enterprises (SMEs) play vital roles in employment and revenue generation. It also leads to the process of industrialization, sustainable economic growth and development; encourages entrepreneurship and employment generation; reduces poverty and contributes to the country’s gross domestic product (GDP); introduces innovation and Universal Journal of Accounting and Finance: entrepreneurship skills. Small businesses may not have as big resources as larger companies, yet survival is just as critical to economic development (Nsoke , Okolo , & Ofoegbu , 2021).

In many jurisdictions, the small and medium-sized enterprises (SMEs) sector has attracted increasing and significant attention from policy makers. This attention has focused on SMEs development, business birth rates and entrepreneurship in the developed economies. These economies look to the SMEs sector for provision of increased employment, economic development and innovation.

Comparatively, most small and medium size enterprises are not registered as corporate bodies but as sole proprietorship, this makes registration procedures quite simple and a bit easier than the other forms of business registration (Aledejebi & Oladimeji, 2019).

Due to this phenomenon, SMEs has really outnumbered all the other form of businesses and could be found mostly everywhere across the country. In spite of their numbers and significance, recent studies show that over 70% of the SMEs failed within the first five years of operation. Studies also shows that it is hard for SMEs to access finances from financial institutions since they lack proper financial records as requirement.

But this is not the case in developed countries, the success stories of SMEs becoming larger firms in developed countries is a reality and this success according to studies have been attributed to proper accounting record keeping or bookkeeping practices (King-Aidoo,  2020).

Record keeping consists of identification, classification, summarization, storage, protection, communication, retention and disposal of records for the preparation of financial statements. Policies, systems, procedures, operations and personnel are important to the keeping of records. An account is a record of financial inflows and outflows in relation to the respective asset, liability, income and expense (Aledejebi & Oladimeji, 2019).

Financial position elements include property, money received, money spent, are assigned to one of the primary groups that is assets, liabilities, and equity. Income and expenses accounts are considered temporary accounts, since they represent only the inflows and the outflows absorbed in the financial position elements on completion of the time period.

According to the IAS (international accounting standards) small and medium size enterprises have to prepare the following financial statements; Statement of financial position (balance sheet), Statement of comprehensive income and income statement, Statement of changes in equity and statement of income and retained earnings, Statement of cash flows and Notes to the financial statements. All these records are to be kept or made by small size enterprises to know the worth of their business and to know how transactions are being carried out and to help the business owner make good business decisions.

Organizational performance is defined as the actual output of a company measured against its intended output. It is a broad field that deals with what an organization does and can accomplish when it interacts with its various constituencies (iEduNote , 2022). In a different viewpoint, performance measures are systems by which organizations monitor their operations and evaluate whether the organization is attaining its goals. The purpose of performance assessment is not only to know how well a business is performing but also to ensure that the business performs better so as to help it to serve its customers, employees, owners and stakeholders (George King-Aidoo, 2020).

Measures of performance combine both financial and non-financial performance. Financial performances measures consist of performance indicators such as, operating profit, net profit, dividend yield, and return on asset, cash flows, return on capital employed, residual income and value added income.

Non-financial, on the other hand, are performance indicators based on non-financial information which originates in and is used by cost and profit centres to monitor and control their activities without any accounting input. Examples of non-financial performance measures include quality of service, flexibility, resource utilization, innovation and competitive performance.

Njeiforbi Bakery is a privately owned business which operates several branches in Cameroon with its headquarters in Buea in the Southwest region of Cameroon. There are one of the best in the pastries industry especially in Buea with products ranging from Hamburger, Special Birthday Cakes, Pain Complait, Croissant, Biscuit Patisserie, Cake Tranche, Sable Tranche, Sugar Balls and others (Wasamundi, 2015).

The business employs workers from bakers, salespeople, guards, cleaners and even transporter. The majority of its business transaction is automated and it highly depends on accounting and bookkeeping programs for the smooth running of its affairs and daily activities. This study is relevant in the Cameroon economy and Buea in particular as most business ignores bookkeeping despite many advantages attributed to bookkeeping in businesses.

1.2 Problem Statement

Accounting record keeping frightens some business owners, keeping records of income and expenditure helps an owner of business to keep proper track of financial transactions. Koskei,

Naibei, & Chepkwony ,(2019) noted that poor record keeping and non-availability of financial records have consequences of mismanagement of resources and poor cash management.

Njeiborbi bakery with several branches in Buea, needs to have a proper bookkeeping records so as to be able to keep tract of its finances. As such how its records are properly managed is influenced by its bookkeeping practices.

According to Nsoke , Okolo ,  & Ofoegbu , (2021), the achievement of the firm’s objectives is greatly influenced by the application of bookkeeping. Njeiforbi being one of the biggest pastry company in Buea with over 5 branches in Buea on over 40 staffs, it is imperative to have an understanding how the business handles its financial transaction and how it handles its bookkeeping for the smooth running of its daily activities.

Studies have shown that most SMEs find it difficult to access loans from financial establishments because of lack of proper financial records as a requirement. Except for statutory requirements, SMEs rarely consider sound accounting system yet the poor and ineffective methods of records keeping has led to the collapse of some of the SMEs (Pedroso & Gomez, 2020).

The necessity of record keeping of SMEs transactions cannot be over emphasized, However, many SMEs do not maintain accounting records yet they perceive the positive role of the accounting records in business performance. Many studies have being carried out in different part of the world, to access the impact of book keeping in performance of SMEs, but in Cameroon and Buea in particular little or no studies have been done. Hence it’s against this background that the study investigated the role of bookkeeping in the performance of small and medium size enterprises in Buea, case of Njeiforbi Bakery”.

1.3 Research Questions

1.3.1 Main Question

What is the effect of bookkeeping on the performance of Njeiforbi?

1.3.2 Specific research questions

1. What types of records are kept for effective management in Njeiforbi?
2. What are the problems associated with bookkeeping in Njeiforbi?
3. What factors affect the performance of Njeiforbi?

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