Assessing the Usage of Management Accounting Tools by Small and Medium Enterprises in Agona West Municipality, Ghana

Abstract

This study sought to establish the degree to which Small and Medium Enterprises (SMEs) located in Agona East Municipality, use Management Accounting Tools (MATs), mainly Budgeting Tools (BTs) and Performance Measurement Tools (PMTs):tools considered essential for the survival and development of SMEs. Precisely, the research study intended to determine the types of MATs used by SMEs; the factors driving the usage of MAT and the perception of SMEs concerning the usefulness of these tools. The research findings indicate that most sampled SMEs employ, to some extent, the two main MATS (Budgeting Tools (BTs) and Performance Measurement Tools (PMTs)). In addition, most SMEs sampled used MATs purposely for measuring and monitoring the performance of their businesses. Concerning the perceived effectiveness of the MATs, the results show that the MATs investigated were perceived to be moderately effective whereas PMT were perceived to be more effective. With regard to factors that could possibly inhibit SMEs from using MATs in the Agona East Municipality, lack of top management involvement was ranked the highest, followed by lack of adequate resources and lack of management accounting tools consciousness. Additionally, the study provided valuable insight into the usage of MATs, which could be used to inform future endeavours of the Governments, local and international organizations with SMEs development agendas, NGOs as well as economic think tanks in their policy formulations. Finally, the findings evaluated the usage of MATs with the aim of increasing the benefits derived from these tools, as well as understanding the purpose of their usage.