Accounting System Of Small Scale Business Organisation With Particular Reference To Aqua Rapha Investment And Majesty Bakery

Accounting System Of Small Scale Business Organisation With Particular Reference To Aqua Rapha Investment And Majesty Bakery

Chapter One

Preface

Background Of The Study

Comparatively, utmost of Small Scale Businesses( SSBs) aren’t registered as commercial bodies but as sole procurement, this makes enrollment procedures relatively simple and a bit easier than the other forms of business enrollment . incompletely due to this miracle, SMEs has outnumbered all the other forms of business and could be set up nearly far and wide across the country. In malignancy of their figures, and significance, recent studies show that 60 of the SSBs s fail within the first five times of operation Boachie-( 2005).

Studies also show that it’s hard for the SMEs to pierce finances from the fiscal institutions since they warrant proper fiscal records as a demand( William, 2008). The SMEs incapability, numerous times to live beyond their first many months of actuality has been attributed incompletely to lack of finance. To come successful and be suitable to contribute meaningfully to the Nigerian frugality, SMEs must attract and secure finance each by themselves.( Amoako, 2013).

In utmost diligence, community will be affected by size. Larger enterprises will be suitable to mileage themselves profitable and certain sophisticated quantitative operation ways that may not be practicable for small bones . lower companies may be suitable to maintain near customer relation and better client relation than the larger bones . This difference in operation fashion may impact deficiency in account system employed in generating fiscal information,( Abdulrasheed, Khadijat and Oyebola, 2012). Among the different principles that establishment may employ are different force ways, deprecation system, system of account for income levies and profit recognition procedures. Pacioli( 1494) described in approach developed by Italian trafficker to regard for their conditioning as proprietor and directors of business as the introductory account model that’s used up to this days. As profitable conditioning progressed from the fundable to husbandry continued to acclimatize to the need of the society. As business unit becomes more complex and broader on compass, account evolved in response to the increased planning and control liabilities of operation. As government grows in size and becomes more centralized, account was developed to meet the increased responsibility. It’s frequently stated that business opinions need to be supported by good and quality fiscal information which needs to be applicable, stoner friendly and available in a timely manner,( Abdulrasheed, Khadijat and Oyebola, 2012). Where applicable account should be an active steering tool to run and manage a business rather of representing another executive burden that the sole owner has to misbehave with. It’s important that the account systems for one man businesses should fulfill similar functions as furnishing essential fiscal information for the possessors and directors in order for them to be suitable to manage the business in a competitive terrain and to make informed opinions to help business failure and to expand the business. still, possessors of one man businesses may have particular requirements and conditions, so that counting systems need to be flexible in order not to put gratuitous operative burdens.( Abdulrasheed, Khadijat and Oyebola, 2012).

still, numerous new business possessors are demoralized by the bare idea of secretary and account. But in reality, both are enough simple. Keep in mind that secretary and account share two introductory pretensions to keep track of income and charges, which improves chances of making a profit, and to collect the fiscal information necessary for filing colorful duty returns. There’s no demand that records be kept in any particular way. As long as records directly reflect the business’s income and charges, there’s a demand, still, that some businesses use a certain system of crediting their accounts the cash system or addendum system. Depending on the size of the business and quantum of deals, one can produce own checks and reports, or calculate on account( Williams, Haka, Bettner, and Carcello, 2008). An account system records, retains and reproduces fiscal information relating to fiscal sale overflows and fiscal position. fiscal sale overflows encompass primarily inrushes on account of inflows and exoduses on account of charges. rudiments of fiscal position, including property, plutocrat entered, or plutocrat spent, are assigned to one of the primary groups, that is, means, arrears, and equity. Within these primary groups each distinctive asset, liability, income and expenditure is represented by separate” account”.

An account is simply a record of fiscal inrushes and exoduses in relation to the separate asset, liability, income or expenditure. Income and expenditure accounts are considered temporary accounts, since they represent only the inrushes and exoduses absorbed in the fiscal- position rudiments on completion of the time period( Williams, Haka, Bettner, and Carcello, 2008). The impact of account is a function of the benefit that are deduced by the members of the society who had bind themselves into the social association of their survival and want satisfaction hunt( Anyigbo 1999). Business benefit from vacuity of counting information, equivalency important is the vacuity of account that facilitates the result or resolution of business planning, association and control function of the enterprises as a social association. utmost small scale establishment possessors prefer to retain unskilled labor force especially pastoral and counting staff. The product of these unskilled account( pastoral staff) has only succeeded in helping the small scale enterprises to stagnate; some enterprises have indeed wound up. This was because unskilled account staff couldn’t keep dependable account records that would stand the test of time statutory; similar staff couldn’t rightly determined the profit or loss of the establishment preparing profit and loss account.( Onaolapo and Adegbite, 2014).

The place of sound account and internal control systems in any business, irrespective of its scale, can not be overemphasized. A vast maturity of small- scale businesses can not go the complexity of a detailed account system indeed if they would have. Hence, the actuality of single entries in their books and in some cases on deficient records( Wood, 1979; Onaolapo, etal., 2011). checkups of small scale enterprises have proven to be among the most worrisome for professional accountants because of the inadequacy of the internal controls. Except for statutory demands, small and medium scale enterprises hardly give serious studies to the process of sound account, yet the inadequacy and ineffectiveness of account processes have been responsible for early collapse of a host of them( Mukaila and Adeyemi, 2011). The position of book keeping and counting in one man businesses have created numerous problems against the effective operation and responsibility of a sole procurement. One man business suffers disproportionately from the nonsupervisory burden compared to large companies, since the lower enterprises frequently don’t have sufficient fiscal and mortal coffers to manage their scores in the most effective way.( Abdulrasheed, Khadijat and Oyebola, 2012).

Meanwhile, a number of Small Scale Enterprises haven’t given important attention to book keeping in relation to their business sale, despite its significance in the success of businesses. This could be lack of sound knowledge in book keeping practices by possessors or separate directors. Also, there was difficulty in catching on whether there’s a comprehensive account record that satisfied the laws under which it was objectification.( Onaolapo and Adegbite, 2014).

It was hard to determine to what extent no adherence to laid- down account procedure and constituted in the wheel of perpetration of good account system. delicate live in catching on how far non- recognition of the necessity of account to uninterrupted actuality and growth, low educational background of possessors and the employment of unskilled account staff had affected the product of unreliable account or fiscal statement. Because of the significance of applicable account information for possessors and directors of one man businesses and their different stakeholders, it’s thus important to this study to assess the impact of counting systems applied in small scale businesses in Nigeria.

It’s frequently said that the world has now come a global vill. presently, the way and manner individualities, enterprises and nations reply to this assertion of globalization tells it all. Specifically with business enterprises, this period requires much further inputs of some kind to be suitable to establish, survive and grow in order to duly assess the conception of globalization. still, to simply survive as a business enterprise requires a rigorous operation of account to every incident in a proper manner. This is due to the fact that, coffers of business enterprises are frequently limited and their proper control in terms of allocation and performance dimension has come the order of the day.

Small business enterprises( SMEs) have an important part to play in Nigeria’s socio- profitable development. The extent of donation these business units can make towards the growth and development of Nigeria is dependent on the position of success attained by their operations. Fact is that, underpinning the success of a business enterprise are the establishment and operation of controls by the possessors or operation in addition to the methodical record keeping of business deals, which, at the end of the period, keeps the proprietor well- informed about the performance of the business.

Statement Of The Problem

The operation of counting systems in small- scale business organisations is fraught with multitudinous control problems and ineffectiveness which have, in utmost cases, produced dysfunctional goods on business operations. also, the enormities of the functional, countervail an strategic problems of robotization have compounded the problem of defective account system in small scale business organisations.

Objects Of The Study

The objects of this study are

1) To estimate the account system of model company so as to determine their felicitousness, acceptability and effectiveness.

2) To examine its operation and the cost and benefit of robotization so as to determine the plausibility or else of espousing computer technology in its account system.

3) To examine the functional, contextual and strategic problems essential in the robotization of counting systems so as to determine how the company has effectively dived these problems.

4) Eventually, to make similar recommendation as in considered necessary to raise the position of operating terrain of the company.