Financial Management Practices of Small Firms in Nigeria: Emerging Tasks for the Accountant”
Abstract
This paper titled “Financial Management Practices of Small Firms in Nigeria: Emerging Tasks for the Accountant” It is aim to determine whether the financial management practices of small firms in Nigeria have impact on their profitability, growth and survival. It was discovered that two financial information variables (accounting system and financial management information) alone dominate the risk perception of fund providers. As a result, small firms find it difficult to source adequate funds for business operations. The study also reveals that lack of qualified staff and the inability of owner managers to appreciate the right of stakeholders to have access to such information. SME firms are therefore recommended to employ the services of qualified accountants in order to upgrade their financial management practices to enhance their overall performance.
Key words: Financial management, Small firms, Accountant, Performance.
INTRODUCTION
Small firms play vital roles in the process of industrialization, sustainable economic growth encouragement of entrepreneurship, employment generation reduction of poverty and contribution to the Gross Domestic Products (GDP) of many countries and Nigeria is not an exception. They perform such vital roles through innovation and the production of various goods and services which empower the process of economic development. For small firms to carry out such important tasks, they need credit facilities in terms of short and long-term loans.
The process of sourcing such funds as well as the effective utilization and efficient management of the funds constitute major challenges for the accountants of SMEs. The challenges require the involvement of well trained/professional accountants which SMEs lack the resources to attract.
Therefore, role of the accountants in SMEs is often broader than the conventional definition of the accounting function. Apart from the basic accounting functions of providing the accounting
This paper titled “Financial Management Practices of Small Firms in Nigeria: Emerging Tasks for the Accountant” It is aim to determine whether the financial management practices of small firms in Nigeria have impact on their profitability, growth and survival. It was discovered that two financial information variables (accounting system and financial management information) alone dominate the risk perception of fund providers. As a result, small firms find it difficult to source adequate funds for business operations. The study also reveals that lack of qualified staff and the inability of owner managers to appreciate the right of stakeholders to have access to such information. SME firms are therefore recommended to employ the services of qualified accountants in order to upgrade their financial management practices to enhance their overall performance.
Key words: Financial management, Small firms, Accountant, Performance.
INTRODUCTION
Small firms play vital roles in the process of industrialization, sustainable economic growth encouragement of entrepreneurship, employment generation reduction of poverty and contribution to the Gross Domestic Products (GDP) of many countries and Nigeria is not an exception. They perform such vital roles through innovation and the production of various goods and services which empower the process of economic development. For small firms to carry out such important tasks, they need credit facilities in terms of short and long-term loans.
The process of sourcing such funds as well as the effective utilization and efficient management of the funds constitute major challenges for the accountants of SMEs. The challenges require the involvement of well trained/professional accountants which SMEs lack the resources to attract.
Therefore, role of the accountants in SMEs is often broader than the conventional definition of the accounting function. Apart from the basic accounting functions of providing the accounting
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