Accounting Systems for Records Keeping Practices for Small Enterprise Development in Makueni County, Kenya

Abstract

Small enterprise development strategy is used by governments worldwide for economic development, wealth creation and poverty reduction. The government of Kenya vision 2030 of being a medium income economy is anchored on an ambitious economic development blueprint through economic, social and political pillars. While small enterprises are taunted as part of the catalysts for rapid development, by their nature small enterprises face a myriad of challenges in the collection of financial information through accounting system which is used in business decision making. The study considered the challenges faced by the enterprises in record keeping, the type of accounting systems they use and the role of accounting systems in enterprise development in Makueni County, Kenya. Data for the study was collected from 250 small enterprises through semi-structured questionnaires and analysed using descriptive and inferential statistics. Small enterprises prefer maintaining manual records of accounting systems for recording purchases, sales and expenses. The challenges small enterprises faced were lack of competent clerical staff, time constraints and lack of knowledge on record keeping. A significant linear relationship is evident between accounting systems and enterprise development in Makueni County of Kenya. There is need for the government and other stake holders to intervene in capacity building of small enterprises on accounting practices as a pillar to the development and sustainability of small enterprises in Kenya.