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An Examination of Accounting Practices and Challenges of Microbusinesses: Empirical Evidence from Scotland

Ahammed, Shaif Uddin; Beloucif, Ahmed; Tarbert, Heather

Authors

Shaif Uddin Ahammed

Ahmed Beloucif

Heather Tarbert



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.

Citation

Ahammed, S. U., Beloucif, A., & Tarbert, H. (2019). An Examination of Accounting Practices and Challenges of Microbusinesses: Empirical Evidence from Scotland. In Proceedings of the 42nd Annual Conference of the Institute for Small Business and Entrepreneurship

Conference Name The 42nd Annual Conference of the Institute for Small Business and Entrepreneurship
Conference Location Newcastle-upon-Tyne, United Kingdom
Start Date Nov 14, 2019
End Date Nov 15, 2019
Online Publication Date May 14, 2019
Publication Date Nov 14, 2019
Deposit Date Sep 12, 2021
Publicly Available Date Mar 29, 2024
Book Title Proceedings of the 42nd Annual Conference of the Institute for Small Business and Entrepreneurship
ISBN 9781900862325
Keywords Microbusiness, accounting practices, challenges, record keeping
Public URL http://researchrepository.napier.ac.uk/Output/2801158
Publisher URL https://app.oxfordabstracts.com/events/877/program-app/submission/132248

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