Importance Of Record Keeping

Several factors including record keeping have frequently been cited as the drivers of business performance in SMEs. Keeping proper records has been noted to be one of the important factors influencing the performance of a business. Peacock (1988) found that the inefficient and/or lack of accounting records have led to the failure of many SMEs. Along similar lines, McCannon (2002) argues that, many SMEs fail because owners could not make timely and key managerial decisions resulting from the lack of adequate records. Given the benefits of record keeping, one would therefore wonder why some owners of SMEs fail to maintain books of accounts. It appears many SME operatives are unaware of the contributions of record keeping to the bottom line. Indeed,

1.6.2 Accounting Records Keeping

All of the documentation and books involved in the preparation of financial statements or records relevant to audits and financial reviews. Accounting records include records of assets and liabilities, monetary transactions, ledgers, journals, and any supporting documents such as checks and invoices.

Record keeping has become the foundation on which the totality of modern business depends. This is because without it, it will be impossible to ascertain the level of profitability and the level of business susceptibility to fraud. Record keeping and good record management is also essential for any corporate body to function effectively.

1.6.2.1 Proper Accounting Records Keeping

Hughes (2003) asserts that keeping business records is an important driver for the success of a business and argues that a comprehensive record or book keeping system enables business owners to develop accurate and timely financial reports that detail the progress and prospects of the

In effect, many of them remain unconvinced about the role of record keeping in business growth, performance and profitability.

According to Uzoma (1991), th e causes of business failure includes competition, lack of capital, location and premature expansion.

Osagbemi (1981) assets that the major factors responsible for small business failure includes lack of luck, insufficient money, insufficient preparation, lack of business connections, low level of business education, lack of experience, poor health, lack of managerial ability etc.

According to Osuala (1993), the causes of business failure includes management incompetence, lack of experience, lack of capital, over investment in fixed assets, poor customer credit practices, unplanned expansion and improper attitudes such as laziness, extensive vacationing, overextension and unethical