Management accounting use in micro and small enterprises

Abstract

Purpose The purpose of this paper is to explore if and how micro and small firms apply management accounting (MA) techniques. Design/methodology/approach The study is based on 36 semistructured interviews with micro and small firm owners/managers in Mexico. Content analysis is used to identify how these enterprises use MA tools. Findings Micro and small firms consistently use MA tools. Most of them have some sort of planning, set objectives, have a costing system – even if budgeting is unusual – and use one or two metrics to monitor performance. Research limitations/implications This is exploratory research with a limited and nonrandom sample. Only a limited number of MA tools were studied. Practical implications Micro and small firms’ use of MA tools. This is arguably important because these enterprises use these techniques in a way that is different from the traditional approach used in bigger corporations. A relevant implication emerging from the findings, as a contribution to practice would be the need to include MA for micro and small businesses in formal training and textbooks. Originality/value On top of providing and assessing empirical evidence on a debate that has been so far largely theoretical, and on the back of the relative weight of micro and small enterprises in any given economy, this paper aims at reinforcing awareness on the need to further the study of the decision-making process in such firms.

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