Investigating the contemporary management accounting practices used by small enterprises in Ntuzuma Township, Durban

Abstract

Despite the implementation of various managerial strategies, Small Enterprises (SEs) in South Africa continue to confront challenges in effectively managing their business, with cost management remaining a persistent struggle. The sustainability of SEs in a growing economy like South Africa is critical because of their significant contribution to the country’s economic growth and job creation. Nevertheless, the high failure rate of SEs in the country has become the primarily concern for government. The adoption of management accounting practices (MAPs) presents potential solutions by providing techniques for efficient cost control and informed decision-making. Therefore, the current study seeks to identify the CMAPs used by SEs; examine their knowledge about these practices, investigate the perceived usefulness of CMAPs in Ntuzuma Township, and analyse the correlation between biographic data and CMAPs. To fulfil these objectives, a quantitative cross-sectional design was employed. The data used in the study was collected utilising a questionnaire instrument and involving 180 respondents. The research framework was guided by contingency theory, and data analysis was conducted using regression, tables, and standard deviation, which are derived from the SPSS software version 25. Despite the majority of respondents indicating limited extensive use of CMAPs, a significant portion recognised the benefits of CMAPs in making well-informed decisions relating to the management of costs. Notably, the sales budget and cash budget emerged as the most commonly employed budgeting practices. The study also brought to light that managers possessed varying levels of knowledge regarding CMAPs, with most of this knowledge acquired through previous work experiences. Biographical factors exhibited a detrimental influence on costing and budgeting practices, as evidenced by weak correlations and the absence of statistical significance. The study's recommendations emphasise the necessity for SEs staff training, CMAPs applications of tools programmes, knowledge sharing and further research and evaluation.