Recently, on July of year 2009, the International Accounting Standards’ Board (IASB) released the International Financial Reporting Standards for Small and Medium-Sized Entities (IFRS for SMEs) .
Micro, small and medium enterprises (MSMEs) encompass 99.6% of all registered business in the country and occupy 70% of the labor force (Department of Trade and Industry [DTI], 2010). This makes them an essential unit in the economical aspect of the country. Also, according to DTI, their major role entails the assistance for rural industrialization and growth, and creation of employment prospects and more reasonable returns allocation. MSME’s further contribute much idea, ability, and advancement ...view middle of the document...
This study primarily aims to introduce the knowledge of accounting systems as an effective skill for owners of micro enterprises to aid them in making decisions. This emphasizes the incorporation of accounting system and/or other relative way of keeping records for entrepreneurs to utilize these records as bases for future transactions. This would also attest the accounting tool that is most relevant to small business owners. Primary reasons for incorporating these tools of recording can also be identified. The study would try to disprove that using accounting tools are merely for larger businesses with greater number of transactions for they might require higher amount of expenses allocated for using these tools.
The researchers conducted a survey last February 10, 2014 at De La Salle Lipa. Out of the owners and/or staffs of small businesses at Chez Rafael, BB Canteen and Food Palace located at the said school, 20 respondents were chosen randomly. This was done to gather first hand information about how accounting tools aid small businesses in their daily transactions and decision making. The survey was composed of two parts, the first for the demographic profile of the respondents and the second, with six questions, for the assessment of the research objectives. The following data were gathered.
Graph 1. Nature of Business
From the respondents, 15 of them or 75% were engaged in food business. Three out of 20, which led to 15%, had loading business while two of the respondents were selling school supplies which led to 10%. The results showed that most businesses operating inside the school were food businesses. Students and even teachers display great demand in food consumption. Their demand for this basic need makes the operation of the stalls harder to manage. This may then lead to disorder of records as transactions occur.
Graph 2. Number of Employees
Graph 2 showed that 80% or 16 of the respondents employed one to three people for the operation of the business. Two respondents said they have four to six employees and another two claimed that they have seven to nine employees. Both categories garnered 10%. Since most business owners employed one to three individuals to aid them in managing their transactions, this implied that most proprietors lessen the cost of operations through acquiring few staffs. These staffs are possibly seen enough to aid the owner in selling and recording the transactions, if necessary.
Graph 3. Educational Attainment
Graph 3 showed that among the respondents, 13 were high school graduates, 7 were able to finish college and none of them merely reached until elementary level. This indicated 65%, 35% and 0% respectively. This explained that even most respondents were able to reach high school level, they learned to manage businesses as owners or staffs. This disallowed questioning their knowledge in administering business records and the business itself despite their educational attainment.