Management practices in micro and small enterprises: the relationships between practices adopted and funding

Abstract

This paper aims to analyse the relationships between management accounting practices and sources of financing. Data were collected from a survey questioning the profiles, the sources of financing and the management practices adopted by 52 small business in a textile cluster. It could be observed that 38.5% of the firms were initially fund-raised by family resources and that 42.3% resorted to the personal funds of the owner. As for resources used to maintain the business, 34% of the respondents answered that it was obtained from banks and 21.2% told that it came from their own resources. Through U Mann-Whitney test, it was found that sources of resources of family origin indicated significant negative associations with management and control practices. A different behaviour was detected when resources came from personal funds and debt capital: Relationships between management practices and debt capital present themselves positively, indicating that obtaining credit from these sources is associated with increased use of tools.

INFLUENCE OF MANAGEMENT ACCOUNTING PRACTICES ON MSMEs FIRMS PERFORMANCE

“…Recent research on MAPs practices in Vietnamese MSMEs (Bui et al, 2020) found interesting and fruitful findings, described that management accounting serves on multiple functions such as (a) basis for controlling fuctions, (b) basis for decisions making, (c) basis for establisihing standard cost, and (d) basis for building budgeting system. Further, based on the research in Brazil (Araújo et al 2016), positive correlations between management strategies and debt capital suggest that acquiring loans from these sources is linked to increasing tool use. (management accunting tools).…”