An examination of accounting practices and challenges of micro-businesses: empirical evidence from Scotland

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Abstract

In Scotland, there are more than 94% of enterprises which are defined as microbusinesses. Previous studies have thoroughly investigated accounting practices in SME sector internationally in addition to the UK. However, despite the prevalence of microbusinesses in Scotland, there is a lack of literature on the accounting practices and the particular challenges microbusiness face. To fill this gap, this study examines the accounting practices of microbusinesses and their challenges. An in-depth interview technique is used as a method of data collection, where we wanted to understand ‘what’, ‘why’ and ‘how’ in relation to this phenomenon.

Results suggest that the majority of microbusinesses used single entry bookkeeping and cash basis accounting. Furthermore, cost, knowledge of owners, time constraints emerged as key challenges of proper record keeping. In some cases, the calculation of profit and loss does not reflect the actual profit and loss for the business.

Overall, this study provides a number of policy implications. Thus, the Government and non-government agencies can use the information from this research to provide training in relation to accounting practices to microbusiness owners and managers. Training would help microbusinesses more accurately record transactions and hence allow for better decision making.
Original languageEnglish
Title of host publicationProceedings of the 42nd Annual Conference of the Institute for Small Business and Entrepreneurship
PublisherInstitute for Small Business and Entrepreneurship
ISBN (Print)9781900862325
Publication statusPublished - 14 Nov 2019
EventThe 42nd Annual Conference of the Institute for Small Business and Entrepreneurship: Space - Exploring New Frontiers and Entrepreneurial Places - Crowne Plaza Newcastle, Newcastle-upon-Tyne, United Kingdom
Duration: 13 Nov 201915 Nov 2019
https://isbe.org.uk/isbe-2019/
https://app.bizvento.com/isbe2019/#/event/7635a3ee-270b-4551-bac8-bf9ad2be9d2b

Conference

ConferenceThe 42nd Annual Conference of the Institute for Small Business and Entrepreneurship
Abbreviated titleISBE 2019
CountryUnited Kingdom
CityNewcastle-upon-Tyne
Period13/11/1915/11/19
Internet address

Keywords

  • Microbusiness
  • Accounting practices
  • Challenges
  • Record keeping

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    Ahammed, S., Beloucif, A., & Tarbert, H. (2019). An examination of accounting practices and challenges of micro-businesses: empirical evidence from Scotland. In Proceedings of the 42nd Annual Conference of the Institute for Small Business and Entrepreneurship Institute for Small Business and Entrepreneurship. https://app.oxfordabstracts.com/events/877/program-app/submission/132248