Analyzing the adoption of accounting practices in small businesses. A case study of traders in Kikuubo trading centre in Kampala, Uganda

Abstract

The aim of the study was to examine the accounting practices adopted by traders in Kikuubo. The objectives of the study included assessing the prevailing accounting practices adopted by small businesses in Uganda, identifying the challenges of implementing accounting practices in small businesses, and providing recommendations for increasing the adoption of accounting practices in small businesses. A sample of 379 traders in Kikuubo trading center in Uganda was considered. The majority of respondents were male, while females represented a smaller portion of the sample. The largest proportion of respondents fell within the 36-40 years age group. A majority of respondents did not use internal controls such as stocktaking and issuing receipts to protect assets and minimize losses. The findings indicated that while small businesses in Uganda utilized various accounting practices, many still relied on informal methods and faced significant challenges in implementing more structured approaches. Key obstacles included limited financial resources, a lack of basic accounting knowledge, complex regulatory requirements, and inadequate access to technology. Despite these hurdles, there was a clear opportunity for improvement through targeted recommendations, such as providing affordable accounting software, enhancing financial literacy, and establishing support systems like business advisory centers and peer learning networks. Strengthening the enforcement of accounting regulations could also foster a more compliant and financially aware business environment. The study recommended implementing comprehensive financial literacy initiatives tailored for small business owners. Further studies should focus on longitudinal research to assess the long-term impacts of implemented recommendations on the adoption of accounting practices among small businesses, as tracking changes over time could provide deeper insights into effectiveness and sustainability. Additionally, further studies should explore comparative studies across different regions or countries to identify how varying economic, cultural, and regulatory environments influenced the adoption of accounting practices.