The role of accounting knowledge in enhancing small business performance in West Africa

The Article focuses on the role of accounting knowledge within the small business economy in West Africa. Small businesses are seen as the engine of economies at the local level, however many struggle to grow and prosper as a result of poor financial management and limited accounting knowledge. Quantitative data was collected from a sample of 250 small business owners/ managers in Ghana, Nigeria and Senegal. Part of it was centered around their accounting skills, the way in which they made decisions, and key business performance indicators like profitability, access to finance and regulatory compliance. The findings show that, for small and medium-sized companies, accounting ability is associated with better business performance, including enhanced resource utilization, better tax compliance, and higher specialization in profitable activities. The accounting practices of businesses also impact their ability to access credit from either informal or formal sources and firms that have more ‘organized’ accounting are better suited to handle local economic fluctuations and capitalize on credit from formal sources. The implications of this study suggest the need for further investment in accounting education and support of entrepreneurship in the region at the regional and governmental levels. In addition, hands on accounting workshops and the incorporation of financial literacy into small business enterprise programs can help to develop a more resilient small business sector and overall economy in West Africa.