MJAMR

Financial Records Keeping And Performance Of Small And Medium Enterprise In Organizations. A Case Study Of Kawempe Division, Kampala City.

Jama Ahmed Yasin, Zikusooka Enock


Abstract

The study examined the relationship between financial records keeping practices and performance of Small and Medium Enterprises (SMEs) in Kawempe Division, Kampala City, Uganda. Using a cross-sectional survey design, the study collected data from 156 SME owners and managers through structured questionnaires and financial document analysis. The findings revealed a strong positive correlation (r = 0.756, p < 0.001) between financial records keeping and SME performance. Specifically, SMEs that maintained comprehensive financial records experienced 43% higher profitability, 51% better cash flow management, and 38% higher access to formal credit compared to those with poor record-keeping practices. Only 34.6% of surveyed SMEs maintained complete financial records including income statements, balance sheets, and cash flow statements, while 41.7% kept partial records, and 23.7% maintained minimal or no formal records. SMEs with proper record-keeping systems showed average annual revenue growth of 28.3% compared to 11.7% for those without adequate records. The study found that specific record-keeping practices including cash books (r = 0.698), sales records (r = 0.712), inventory records (r = 0.684), and expense tracking (r = 0.673) were significantly correlated with improved financial performance. Major barriers to effective record-keeping included lack of accounting knowledge (68.6%), time constraints (54.5%), perceived cost (47.4%), and absence of legal enforcement (39.1%). The study concluded that financial records keeping was a critical determinant of SME performance and sustainability. It was recommended that SMEs should adopt systematic record- keeping practices, government should provide subsidized training programs, financial institutions should link credit access to record-keeping standards, and professional associations should offer affordable bookkeeping services tailored to SME needs.

Keywords

Financial records keeping SME performance bookkeeping small business accounting financial
Metropolitan Journal of Academic Multidisciplinary Research

Cite This Article

Jama Ahmed Yasin & Zikusooka Enock (2025). Financial Records Keeping And Performance Of Small And Medium Enterprise In Organizations. A Case Study Of Kawempe Division, Kampala City. Metropolitan Journal of Academic Multidisciplinary Research, 4(12). https://doi.org/10.68598/mjamr.514

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