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The Importance of Capturing and Using Financial Information in Small Business

Author

Listed:
  • Dorothy Davis
  • Paul Dunn
  • Katherine Boswell

Abstract

Problem statement: Small businesses have not been realizing the advantages of good record-keeping and management of financial records. The purpose of this study was to determine some key issues relating to the recordkeeping practices of small business to help determine areas that are causing this major subgroup of businesses to underutilize their use of captured financial data through business processes. Approach: A survey was distributed to small business owners in the retail apparel industry which looked at different classes of issues that would impact the management and usefulness of financial data generated within the business. Results: The results showed that half of the respondents eschewed any computerized system, preferring the traditional manual approach to managing their financial data. Another discovery was that the majority of respondents did not use external expertise in financial data collection, organization or analysis. Manual system users also didn’t generate reports from the financial data nearly as often as computerized system users. Finally, this study showed that a large portion of the respondents that did use computerized systems for financial data management had not participated in the selection of the software. Conclusion: The results of this study helped spotlight areas of shortfalls of small businesses in the best organization and utilization of financial data, which would support the ongoing concerns of these businesses and strengthen them in an economic climate that had not been friendly towards small businesses for quite some time.

Suggested Citation

  • Dorothy Davis & Paul Dunn & Katherine Boswell, 2009. "The Importance of Capturing and Using Financial Information in Small Business," American Journal of Economics and Business Administration, Science Publications, vol. 1(1), pages 27-33, March.
    • Handle: RePEc:abk:jajeba:ajebasp.2009.27.33
    DOI: 10.3844/ajebasp.2009.27.33
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    Cited by:

    1. Clement Mintah & Mohamed Gabir & Felicia Aloo & Elvis Kwame Ofori, 2022. "Do business records management affect business growth?," PLOS ONE, Public Library of Science, vol. 17(3), pages 1-21, March.
    2. Ahamed Al-dmour & Rand Al-dmour & Ra'ed Masa'deh, 2016. "Interrelated Factors Influencing the Adoption Decision of AIS Applications by SMEs in Jordan," International Business Research, Canadian Center of Science and Education, vol. 9(10), pages 46-62, October.
    3. Stone, Gerard William, 2011. "Readability of accountants’ communications with small business—Some Australian evidence," Accounting forum, Elsevier, vol. 35(4), pages 247-261.

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