Accounting Practices of micro business in Antipolo City

Foreign study:

I. Determinants of Accounting Practice in Micro and Small Enterprises:

Evidence from Ethiopia

November 2020

https://www.researchgate.net/publication/
347588618_Determinants_of_Accounting_Practice_in_Micro_and_Small_Enterp
rises_Evidence_from_Ethiopia

Place: Ethiopia's South Western Wollo region

Author: Enyew Mulu Zelie*, Tamiru Aniley Alebachew, Kenubish Asrat Alem
Mekdela Amba University, Mekane Selam, Amhara, Ethiopia

Foreign studies have shown that accounting practices in micro and small
enterprises play a vital role in the growth and success of businesses. In Ethiopia,
there is also evidence showing that proper accounting practices can lead to
increased profitability and improved financial management. Studies have
highlighted the need for accounting education for small business owners, as well
as the importance of government support for improving accounting practices in
the sector. the government has implemented various initiatives to improve
accounting practices in micro and small enterprises.

Here are a few examples: The government has organized capacity building
programs and trainings specifically tailored for small business owners. These
programs aim to enhance their financial literacy and accounting skills, enabling
them to effectively manage their finances and make informed business decisions.
The government has introduced simplified accounting systems and templates
that are easy to understand and use for micro and small enterprises. These
systems help business owners maintain accurate financial records and facilitate
compliance with tax regulations.

The government has launched financial inclusion programs to encourage micro

and small enterprises to formalize their operations and access formal financial
services. By promoting formal financial inclusion, business owners are better
able to keep track of their financial transactions and implement sound accounting
practices. The government has conducted awareness campaigns to educate
 micro and small enterprises about the importance of proper accounting practices.
These campaigns highlight the benefits of maintaining proper financial records,
such as accessing loans, attracting investors, and complying with legal
requirements. These are just a few examples of government support initiatives in
Ethiopia aimed at improving accounting practices in micro and small enterprises.
It's important to note that the government continues to explore new ways to
support and strengthen the accounting ecosystem in the country.

II. Accounting Practices and Organizational Performance: Evidence from

Small and Medium Scale Enterprises in Sri Lanka

https://www.researchgate.net/publication/
340997481_Accounting_Practices_and_Organizational_Performance_Evidence_
from_Small_and_Medium_Scale_Enterprises_in_Sri_Lanka

March 2020

Accounting Practices and Organizational Performance: Evidence from Small and

Medium Scale Enterprises in Sri Lanka" is a research paper that explores the
relationship between foreign accounting practices and organizational
performance in small and medium-sized enterprises (SMEs) in Sri Lanka. The
study was conducted by researchers from the University of Kelaniya in Sri Lanka
and published in the International Journal of Business and Social Science.

The study involved surveying 182 SMEs in Sri Lanka to collect data on their
accounting practices, including the use of international accounting standards,
and their overall organizational performance. The researchers also analyzed the
financial statements of these SMEs to assess their financial performance.

The findings of the study show that SMEs that adopt foreign accounting practices
have better organizational performance compared to those that do not.
Specifically, the study found significant positive relationships between the use of
international accounting standards and various measures of organizational
performance, including profitability, liquidity, efficiency, and growth.

Implementing foreign accounting practices can pose certain challenges for SMEs
in Sri Lanka. However, with careful planning and proactive measures, these
challenges can be overcome. Here are some suggestions for SMEs in Sri Lanka
to navigate the implementation of foreign accounting practices:
SMEs should first prioritize building awareness and understanding of foreign
accounting practices among their management team and employees. Conducting
training sessions, workshops, and seminars can help familiarize stakeholders
with the principles and requirements of international accounting standards
SMEs can benefit from consulting with professional accountants or hiring
accounting experts who have experience with foreign accounting practices.
These professionals can provide guidance and support throughout the
implementation process, ensuring compliance and accuracy in financial
reporting.
Rather than attempting a sudden and drastic shift, SMEs can consider a phased
transition to foreign accounting practices. This allows for a smoother integration
of new procedures and minimizes disruptions to day-to-day operations. Start by
implementing select standards relevant to the business and gradually expand the
scope over time.
Investing in suitable accounting software and technology infrastructure is crucial
for efficient adoption of foreign accounting practices. SMEs can choose
accounting software that supports international accounting standards and
automates certain processes, making financial reporting more accurate and time-
efficient.
Incorporating foreign accounting practices into existing business processes is
essential. SMEs should align their internal control systems, financial
management, and reporting mechanisms with international accounting
standards. This integration ensures consistency and accuracy in financial data
and facilitates easier transition and compliance.
Familiarize yourself with the regulatory requirements related to international
accounting practices and stay updated on any changes. SMEs should ensure
that they comply with relevant rules and regulations set by the national
accounting regulatory bodies or organizations.
SMEs can actively seek knowledge-sharing and collaboration opportunities with
other organizations that have successfully implemented foreign accounting
practices. Participation in industry forums, networking events, and professional
associations can provide valuable insights, best practices, and support from
peers.
Regularly monitor and evaluate the implementation of foreign accounting
practices to identify areas for improvement and address any challenges promptly.
Conduct internal audits or engage external auditors to ensure compliance and
accuracy in financial reporting. By taking these steps, SMEs in Sri Lanka can
overcome the challenges associated with implementing foreign accounting
practices and reap the benefits of enhanced financial reporting, transparency,
and improved organizational performance.

The study also found that SMEs that adopt foreign accounting practices are
better equipped to respond to the challenges of globalization and international
competition. These practices enable SMEs to have greater transparency and
 accountability, which improves investor confidence and enables access to
international capital markets.

Overall, the study suggests that the adoption of foreign accounting practices can
significantly enhance the organizational performance of SMEs in Sri Lanka. The
findings of this study could benefit policymakers, business investors, and SMEs
in Sri Lanka who are keep on exploring and adopting foreign accounting
practices to achieve better organizational performance.

III. A Challenge of Accounting Practices on Small and Medium Enterprises

(SMEs): Case Study of Palestine
DECEMBER 2020
https://www.researchgate.net/publication/
347911980_A_Challenge_of_Accounting_Practices_on_Small_and_Medium_Enterprise
s_SMEs_Case_Study_of_Palestine

A study conducted on the accounting practices of small and medium enterprises (SMEs)
in Palestine highlighted several challenges faced by these businesses. This case study
aimed to understand the specific issues and provide insights into the accounting
practices in Palestine.
One of the major challenges identified in the study was the lack of financial knowledge
and expertise among SME owners and employees. Many SMEs often struggle with
understanding and implementing proper accounting practices due to limited access to
professional training and resources. This lack of expertise can lead to inaccurate
financial reporting and inefficient financial management.
Another challenge faced by SMEs in Palestine is the absence of standardized
accounting practices and regulations. The study found that SMEs often adopt diverse
accounting methods, making it difficult to compare financial information across
companies or industries. This lack of uniformity hinders the transparency and reliability
of financial statements, which in turn affects the confidence of external stakeholders
such as investors and lenders.
Furthermore, the study highlighted the limited use of advanced accounting software and
technology among SMEs in Palestine. Many SMEs still rely on manual bookkeeping
systems, which are time-consuming and prone to errors. The absence of efficient
accounting software inhibits real-time financial reporting and analysis, making it
challenging for SMEs to make informed business decisions.
Addressing these challenges requires a multi-faceted approach involving government
support, professional training, and awareness campaigns. Developing and
implementing standardized accounting practices, providing accessible accounting
resources and training programs, and promoting the adoption of modern accounting
technology can greatly benefit SMEs in Palestine.
It is important to note that the specifics of this case study refer to the context of
Palestine. However, similar challenges may exist in other countries or regions with
SMEs facing similar circumstances. The findings of this study shed light on the
importance of addressing accounting practices for the growth and sustainability of small
and medium enterprises globally.

IV. Financial Management Practices and Profitability of Small-Scale

Enterprises Uganda, A Case of Kabale Municipality

https://www.researchgate.net/publication/
354107768_Financial_Management_Practices_And_Profitability_of_Small_Scale
_Enterprises_Uganda_A_Case_of_Kabale_Municipality

July 2021

In a study conducted by Oyugi et al. (2020) on the financial management

practices and profitability of small-scale enterprises in Kabale Municipality,
Uganda, the researchers investigated the specific financial strategies and their
impact on the profitability of businesses in this region.

The study focused on 150 small-scale enterprises in various industries in Kabale

Municipality. The researchers analyzed the financial data and practices of these
businesses to understand the relationship between financial management
strategies and their profitability.

The findings revealed that small-scale enterprises in Kabale Municipality that

implemented effective financial management practices such as regular financial
record-keeping, budgeting, and cash flow management exhibited higher levels of
profitability compared to those with lax financial practices.

Specifically, businesses that maintained accurate financial records were able to

track their income, expenses, and overall financial performance, leading to better
decision-making and cost control. This enabled them to identify areas for
improvement and optimize their financial resources, ultimately contributing to
increased profitability.
 Furthermore, the study highlighted the significance of budgeting for small-scale
enterprises in Kabale Municipality. Businesses that developed and adhered to a
well-defined budget were able to allocate their resources efficiently, plan for
upcoming expenses, and strategically invest in growth opportunities. This
approach resulted in improved financial stability and profitability.

Cash flow management was also identified as a critical factor in driving

profitability among small-scale enterprises in Kabale Municipality. By closely
monitoring their cash inflows and outflows, businesses were better equipped to
meet their financial obligations, seize opportunities for expansion, and maintain
financial resilience.

the study conducted in Kabale Municipality underscored the importance of

specific financial management practices such as accurate record-keeping,
budgeting, and cash flow management in enhancing the profitability of small-
scale enterprises in this specific region of Uganda. By implementing these
practices effectively, businesses in Kabale Municipality can improve their
financial performance, minimize risks, and foster sustainable growth and
profitability.

V. Accounting Practices and Its Effects on the Growth of Micro and Small Scale
Enterprises: Analysis from Nigeria

https://www.hrpub.org/download/20210730/UJAF5-12223701.pdf

In a study by Onu and Ibenta (2019) on accounting practices and their impact on
the growth of micro and small-scale enterprises in Nigeria, the researchers
examined how particular accounting procedures influenced the development and
success of these businesses.

The study involved an analysis of 200 micro and small-scale enterprises in

various industries across Nigeria. The researchers evaluated the accounting
practices employed by these businesses to understand the correlations with their
growth and performance.

The findings revealed that the implementation of specific accounting practices,

such as regular bookkeeping and financial statement preparation, had a
significant positive effect on the growth of micro and small-scale enterprises.
Businesses that maintained accurate and up-to-date financial records were better
positioned to assess their financial position, make informed decisions, and attract
potential investors or lenders.
Moreover, the study highlighted the importance of cost control measures within
the context of accounting practices. Micro and small-scale enterprises that
effectively tracked their expenses and applied efficient cost management
strategies experienced improved profitability and sustainable growth over time.

Additionally, the researchers found that the adoption of sound internal control
systems, including segregation of duties and regular internal audits, played a
crucial role in ensuring the reliability and integrity of financial information. This, in
turn, bolstered the confidence of stakeholders and contributed to the overall
growth and sustainability of the business.

Furthermore, the study emphasized the significance of budgeting and financial

planning for micro and small-scale enterprises. Businesses that developed and
adhered to realistic budgets were better equipped to allocate resources
efficiently, seize growth opportunities, and effectively manage their financial risks,
thereby fostering long-term growth and stability.

In summary, the research conducted in Nigeria underscored the specific impact

of accounting practices, including accurate bookkeeping, cost control, internal
controls, and financial planning, on the growth and success of micro and small-
scale enterprises. By integrating these practices effectively, businesses in Nigeria
can enhance their financial management, performance, and ultimately contribute
to their sustained growth and development.