Implementation of proper accounting record keeping on business performance ratio in Nigeria
CHAPTER ONE/INTRODUCTION
Early civilizations have kept records of accounts for thousands of years. The name “monetary records” refers to a bookkeeping technique where each entry to one account must be matched by an opposite entry to another. Lucapaoli, 1992.
The process of gathering, documenting, classifying, analyzing, processing, and summarizing business transactions in the books of accounts is known as accounting records keeping. A system should be simple to operate, understand, trustworthy, precise, consistent, and designed to give information rapidly (Romney, 2003). The advantages of effective record management include incorporating new records management technology, limiting the expansion of records to reduce operating expenses, and guaranteeing regulatory compliance.
Thanks to compliance and an accurate accounting record, the corporate organization is able to plan efficiently and look for resource misappropriations. The success and continuation of the company are dependent on maintaining correct books of accounts. In order to ensure the efficacy and survival of corporate organizations, management must use reliable, appropriate, accurate, and current financial information for planning and decision-making. (Edun, 2013). Due to poor record keeping, it is difficult to discern between business and personal interactions. (Aardt, 2008). It is known, however, that many small businesses still fail for a variety of reasons, including poor financial record keeping. (2012) Samuel
Even companies that keep accounting records didn’t keep all the necessary books of accounts up to date (Antony, 2014). It has been demonstrated that the majority of small enterprises do not keep thorough accounting records due to a lack of accounting knowledge. Because of this, accounting data is not successfully used to determine financial performance. Even though keeping records is important for planning and decision-making, small firms still struggle to preserve accurate books of accounts (Maseko, 2011).
Business performance and management training, especially in the area of record keeping for businesses, are highly associated. Good business management includes keeping accurate records of all business transactions. Knowledge and skill in bookkeeping, in particular, are a crucial factor that positively affects the survival and growth of SMEs. If business transactions are not recorded, the company will fail (Howard, 2009).
Many nations consider bookkeeping to be a technique of ensuring economic progress. For a company to thrive, develop, and stand out, bookkeeping must be dynamic, trustworthy, and productive. Thus, keeping correct financial records has become crucial in the challenging and competitive corporate world of today.
business setting. The capacity to maintain correct accounting records aids in business associations’ ability to plan well and monitor corporate asset theft. The maintaining of proper books of records is crucial to the development and survival of a firm. 2012 (Ademola). The role should be filled by a skilled bookkeeper who has the skills necessary to manage money effectively, as this is essential to any organization’s success. The management of organizations and the development of business strategy both depend critically on competent financial record keepers. Higher-level accountants have a bigger impact on a company’s core leadership structure (Tout, 2014).
A solid system of financial record-keeping will give SMEs the data they need to make the best business decisions. Even though keeping correct accounting has been suggested as a possible component in enhancing organizational success. (Azeko, 2015).
Weak managerial abilities and a lack of strategic leadership are blamed for business failures, and it has been established that poor or nonexistent record keeping, particularly in SMEs, contributes to business failure (Germain, 2010)
Prior studies on the expansion and development of small firms acknowledged the importance of keeping correct records in promoting such growth; other studies highlighted a lack of maintaining financial records as the primary impediment to that growth in the small business sector (Tylor, 2008).
Medium-sized and small companies
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