Abstract

This study examines the impact of computerized accounting systems on the performance of small and medium-sized enterprises (SMEs). The objective is to understand the influence of computerized accounting systems on SME performance by assessing financial performance, customer satisfaction, competitive positioning, and decision-making processes.

A sample of 200 SMEs from various industries was selected using a purposive sampling technique. Data were collected through a structured questionnaire administered to key personnel responsible for accounting and finance functions in the SMEs. Statistical software was used for data processing and analysis, employing descriptive and inferential statistics.

The findings reveal that the adoption of computerized accounting systems positively impacts the financial performance of SMEs. Additionally, these systems contribute to improved customer satisfaction, enhanced competitive positioning, and informed decision-making processes. Based on the findings, recommendations are provided. SMEs should consider adopting computerized accounting systems to enhance financial performance.

Optimization of inventory planning and control processes is advised for improved customer satisfaction and competitive positioning. Adequate training programs should be implemented to overcome challenges related to system adoption, and integration with other systems is encouraged for better decision-making.

In conclusion, this study emphasizes the significant impact of computerized accounting systems on SME performance, highlighting the need for their adoption to improve financial performance, customer satisfaction, competitive positioning, and decision-making processes.

CHAPTER ONE

INTRODUCTION

1.1 Background Information

Computerized accounting systems have been gaining popularity in recent years due to their ability to automate accounting processes, reduce errors, increase efficiency, and provide more timely and accurate financial information.

These systems use computer software to manage financial transactions, generate financial statements, and produce tax reports. The adoption of computerized accounting systems has become increasingly important for businesses, as it can lead to significant time and cost savings and improve financial management.

In Cameroon, the use of computerized accounting systems has been growing in recent years, particularly among small and medium-sized enterprises (SMEs). According to a 2021 report by the International Trade Centre, SMEs account for over 95% of businesses in Cameroon, and many of them are turning to computerized accounting systems to streamline their financial operations and stay competitive in the market.

However, the adoption of computerized accounting systems can also have drawbacks, such as the need for specialized knowledge and skills to operate the software, the risk of errors due to software glitches or user error, and potential job loss for traditional accounting professionals. Despite these concerns, the benefits of computerized accounting systems have led to their widespread adoption in many parts of the world, including Cameroon.

Given the importance of computerized accounting systems for SMEs in Cameroon, it is essential to understand their effects on business performance. While several studies have examined the effects of computerized accounting on business performance, more research is needed to understand its impact on SMEs in Cameroon, particularly in Buea.

Therefore, this thesis aims to explore the effects of computerized accounting on the performance of enterprises in Buea, using NJIEFORBI as a case study. NJIEFORBI is a medium-sized enterprise in the retail sector that recently adopted a computerized accounting system.

By examining the impact of this adoption on the financial performance of NJIEFORBI, as well as the experiences of its employees and managers, this study seeks to provide insights into the potential benefits and challenges of computerized accounting for SMEs in Buea.

In a 2019 study, Jiang and Huang found that computerized accounting systems can improve decision-making by providing timely and accurate financial information. Similarly, a 2021 study by Al-Zu’bi and Al-Zu’bi found that the adoption of computerized accounting systems can improve financial performance by increasing efficiency and reducing errors. These studies provide a foundation for exploring the effects of computerized accounting on the performance of enterprises in Buea.

1.2 Statement of the Problem

The adoption of computerized accounting systems has become increasingly popular in recent years, with many companies recognizing the potential benefits of this technology in streamlining financial processes, reducing errors, and improving financial reporting. However, despite the widespread adoption of computerized accounting systems, the impact of these systems on the performance of small and medium-sized enterprises (SMEs) in emerging markets, such as Buea, Cameroon, remains unclear.

In the context of SMEs in Buea, there is a lack of research on the effects of computerized accounting on financial performance. While some studies have suggested that computerized accounting systems can improve financial performance, others have raised concerns about potential drawbacks, such as the need for specialized skills and the risk of errors. This lack of research and understanding can hinder the adoption of computerized accounting systems by SMEs in Buea, limiting their potential to compete and thrive in today’s increasingly competitive business environment. Below are a few specific problems faced by NJIEFORBI’S computerized system.

NJIEFORBI uses the Sage 100 software for its recordings. They face the difficulty of not being able to access data easily in cases of power outage. That is, the accountant has to go to maintenance, log out and log back in to access the software. Also, the system cannot work without internet connection (like MTN, CAMTEL).

To add, without a good accounting background, it’s almost impossible for one to work with this system. Furthermore, the accountant faces difficulties closing the end of year account all on her own. In addition, the system used is not centralized.

As it cannot carry all the different elements of a transaction in one account, it only takes different accounts for every element (for example, if they were to carry out a project like building a borehole, the system needs an account for borehole, water, transport) Whereas it would have been easier to have one central account to ease retrieving data.

Consequently, the above maintenance problem poses difficulties to have a smooth follow up of data. Also, the internet problem cause a delay in work, as the accountant may not have to work that day or wait for a while for it to return. The end of year closing problem causes a fall back in about 5% of annual work, also causing the accountant to take in extra hours in order to properly close the year.

In solving the above problems, the best thing that has been done to solve the power outage issue is the use of backups for the system. The backup lasts for 10 to 15 minutes which allows the accountant to do all the necessary log outs and savings. Also, the best thing done to solve the problem of end of year closing of accounts is to take in the assistance of a coworker to best analyze all the transactions of the entire year. To add, the best means to solve the experience problem is the only employ those with good accounting background.

Although some above problems have been solved, some problems are still being faced as they are simply rules of the system which must be followed like the problem of centralization and that of network.

Therefore, the specific problem this study aims to address is the lack of knowledge on the impact of computerized accounting on the financial performance of SMEs in Buea, using NJIEFORBI as a case study. This study will seek to examine the experiences of NJIEFORBI employees with the adoption of computerized accounting.

This study will contribute to the literature on the adoption of technology in emerging markets. Additionally, this study’s findings will help SMEs in Buea make informed decisions about the adoption of computerized accounting systems, providing guidance on potential benefits and challenges, and enhancing their ability to compete and succeed in today’s business environment.

1.3 Research Questions

1.3.1 Main Research Question

What is the effect of computerized accounting on the performance of enterprises in Buea (case study; Njieforbi)?

1.3.2 Specific Research Questions

1. How does inventory planning impact the financial performance of Njieforbi?
2. What are the challenges faced by Njieforbi in adopting and implementing Sage 100 systems, and how can these challenges be addressed?
3. How can Njieforbi maximize the benefits of Sage 100’s interaction with other systems to enhance their financial reporting and decision-making processes?

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