Records management systems in Small and Medium Entreprises, a case of Kampala District

Abstract

The study investigated record management systems among SMEs in Kampala district. The objectives of the study were; to identify different types of record management systems in SMEs, to find out the benefits of managing records in SMEs, to establish the challenges SMEs face in managing records, to propose strategies to address the problems faced in the management of records. The study used a descriptive research design with quantitative approach that was cross sectional in nature. The unit of analysis were SMEs in Kampala and the unit of inquiry were the SME owners, managers and employees. Simple random sampling was used as a sampling technique and every member of the population had an equal chance of being selected. Both primary and secondary data were used. Primary data was collected from 82 participants using the questionnaires, observation method and was analyzed with SPSS version 16.0. The study revealed that a large proportion of SMEs use manual records management systems compared to those who use computerized systems and both. The study also revealed that record-keeping practices in Kampala are of poor quality, they neither maintain original documents of the business transaction nor adapt to current record-keeping standards and procedures. The majority of SMEs appreciate the benefits of having good records although they do not fully practice good records management, they agree that good records help in profit/loss determination, reveal the health status of the business, Record keeping enables SMEs to plan properly, especially in resource allocation, help to detect fraud, theft, waste, and error that could have been carried out in the business, help in filing of tax returns to various tax offices and usage by other government agencies. The challenges of having good records among SMEs were based on the fact that SME owners find difficulties in maintaining the accounting systems due to their lower levels of education, fewer skills, costs involved, time-consuming and consequently exposing their financial information to others is quite challenging. The strategies likely to improve record management in SMEs were explained as motivating business managers, offering free accountancy services, pieces of training, and workshops to assist business owners who cannot afford to pay for the service of qualified accountants to prepare good-sounding business records and other accountancy services. The study concluded that the majority of SME owners lack knowledge about the importance of record keeping. Most of them do not understand how to choose which records they need to keep and which to destroy. However, this study emphasized that record management is an extremely significant aspect in all business ventures worldwide and business owners have to realize that the costs involved in business failure as a result of not having proper records management far away outweigh the costs involved in preparing business records. The study suggests that record management programs, courses, and workshops for SMEs be started and promoted by the government and other stakeholders in order to assist those who are unaware of the significance of keeping good business records and to motivate SME owners to take an active role of managing their businesses transactions.