Research Key

The Effects of Computerized Accounting System (CAS) on the Growth of Microfinance Institutions (MFI’s) in Buea Municipality

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This study investigated the impact of book keeping on the performance of Njeiforbi bakery. To meet up with the broad coverage of the study, the study was broken down into two objectives that included; to ascertain the relationship that exist between recording of financial transactions on the performance of Njeiforbi, to examine the extent to which credit and debit posting affect the performance of Njeiforbi and to investigate the effect of invoicing on the performance of Njeiforbi. An innitiatial hypothesis was developed. The study employed primary data, with the sampling of 30 respondents who were the employees of Njeiforbi. The study adopted by descriptive and inferential analyses.  The findings of the study showed that financial transaction has as significant but negative relationship with the financial performance of Njeiforbi. The findings further reveals that credit and debit posting affect performance negatively, although significantly. The findings revealed that the is no significant relationship between invoicing and the performance of Njeiforbi bakery.  Thus, base on this results, the null hypothesis of the study that states that Book keeping does not significantly affect the performance of Njeiforbi is rejected over the acceptance of the alternative hypothesis that states that Book keeping significantly affect the performance of Njeiforbi. Thus, the study recommended the implementation of an efficient bookkeeping system. And further recommendation was for regular financial reporting to be adopted by small and medium size enterprises in Buea, especially for the cash of Njeiforbi bakery



  • Background of the study

The value of small and medium-size enterprises (SMEs) in any economy cannot be overstated. In most countries, small and medium-size enterprises (SMEs) play vital roles in employment and revenue generation. It also leads to the process of industrialization, sustainable economic growth and development; encourages entrepreneurship and employment generation; reduces poverty and contributes to the country’s gross domestic product (GDP); introduces innovation and Universal Journal of Accounting and Finance: entrepreneurship skills. Small businesses may not have as big resources as larger companies, yet survival is just as critical to economic development (Nsoke , Okolo , & Ofoegbu , 2021).

In many jurisdictions, the small and medium sized enterprises (SMEs) sector has attracted increasing and significant attention from policy makers. This attention has focused on SMEs development, business birth rates and entrepreneurship in the developed economies. These economies look to the SMEs sector for provision of increased employment, economic development and innovation. Comparatively, most small and medium size enterprises are not registered as corporate bodies but as sole proprietorship, this makes registration procedures quite simple and a bit easier than the other forms of business registration (Aledejebi & Oladimeji, 2019). Due to this phenomenon, SMEs has really outnumbered all the other form of businesses and could be found mostly everywhere across the country. In spite of their numbers and significance, recent studies show that over 70% of the SMEs failed within the first five years of operation. Studies also shows that it is hard for SMEs to access finances from the financial institutions since they lack proper financial records as requirement (Wentzel, Fapohunda, & Haldenwang, 2022).

But this is not the case in developed countries, the success stories of SMEs becoming larger firms in developed countries is a reality and this success according to studies have been attributed to proper accounting record keeping or book keeping practices (King-Aidoo, 2020).

Book keeping consist of identification, classification, summarization, storage, protection, communication, retention and disposal of records for preparation of financial statements. Policies, systems, procedures, operations and personnel are important to keeping of records. An account is a record of financial inflows and outflows in relation to the respective asset, liability, income and expense (Aledejebi & Oladimeji, 2019). Lumme (2020), noted that Bookkeeping is an integral part of accounting and largely focuses on recording day-to-day financial transaction of the business. All the financial transactions such as sales earned revenue, payment of taxes, earned interest, payroll and other operational expenses, loans investments etc.

Soetan, Mogaji and Nguyen (2021), noted that the main purpose of book keeping is to Recording financial transactions, Posting of debits and credits, producing invoices, maintaining and balancing current accounts, historical accounts, general ledgers and completing payroll which are all geared at building a financially stable business. In the past, these book keeping practices were carry out with basic tools like a pen and paper. However, as technology and industries have evolved, they’re now created with specialised software that can be automated and tailored to your business to meet specific requirements. Such software include sage, Peachtree, QuickBooks. The essense of book keeping on small size enterprises is to know the worth of their business and to know how transactions are being carried out and to help the business owner make good business decisions. This would thus help in improving their performance.

Organizational performance is defined as the actual output of a company measured against its intended output. It is a broad field that deals with what an organization does and can accomplish when it interacts with its various constituencies (Romao, Costa, & Costa, 2019). In a different viewpoint, performance measures are systems by which organizations monitor their operations and evaluate whether the organization is attaining its goals. The purpose of performance assessment is not only to know how well a business is performing but also to ensure that the business performs better so as to help it to serve its customers, employees, owners and stakeholders (George King-Aidoo, 2020). Measures of performance combine both financial and non-financial performance. Financial performances measures consist of performance indicators such as, operating profit, net profit, dividend yield, and return on asset, cash flows, return on capital employed, residual income and value added income. Non-financial, on the other hand, are performance indicators based on non-financial information which originates in and is used by cost and profit centres to monitor and control their activities without any accounting input. Examples of non-financial performance measures include quality of service, flexibility, resource utilization, innovation and competitive performance.

Njeiforbi Bakery is a privately owned business which operates several branches in Cameroon with its headquarters in Buea in the Southwest region of Cameroon. There are one of the best in the pastries industry especially in Buea with products ranging from Hamburger, Special Birthday Cakes, Pain Complait, Croissant, Biscuit Patisserie, Cake Tranche, Sable Tranche, Sugar Balls and others (Wasamundi, 2015). The business employees workers from the bakers, sales person, guards, cleaners and even transporter. Majority of its business transaction is automated that its highly depends on accounting and bookkeeping programs for the smooth running of its affairs and daily activities. This study is relevant in the Cameroon economy and Buea in particular as most business ignores book keeping despite much advantages attributed to book keeping in businesses.

  • Statement of the problem

Accounting record keeping frightens some business owners, keeping record of income and expenditure helps an owner of business to keep proper track of financial transactions. Koskei, Naibei, and Chepkwony (2019), noted that poor record keeping and non-availability of financial records have consequences of mismanagement of resources and poor cash management. Njeiborbi bakery with several branches in Buea, needs to have a proper bookkeeping records so as to be able to keep tract of its finances. As such how its records are properly managed is influenced by its bookkeeping practices.  According to Nsoke , Okolo , & Ofoegbu , (2021), the achievement of the firm’s objectives is greatly influenced by the application of bookkeeping. Njeiforbi being one of the biggest pastry company in Buea with over 5 branches in Buea on over 40 staffs, it is imperative to have an understanding how the business handles its financial transaction and how it handles its bookkeeping for the smooth running of its daily activities.

Studies have shown that most SMEs find it difficult to access loans from financial establishments because of lack of proper financial records as a requirement. Except for statutory requirements, SMEs rarely consider sound accounting system yet the poor and ineffective methods of records keeping has led to the collapse of some of the SMEs (Pedroso & Gomez, 2020).

The necessity of record keeping of SMEs transactions cannot be over emphasized, However, many SMEs do not maintain accounting records yet they perceive the positive role of the accounting records in business performance. Many studies have being carried out in different part of the world, to access the impact of book keeping in performance of SMEs, but in Cameroon and Buea in particular little or no studies have been done. Hence it’s against this background that the study investigated the role of bookkeeping in the performance of small and medium size enterprises in Buea, case of Njeiforbi Bakery.

  • Research questions
    • Main question

What is the impact of book keeping on the performance of Njeiforbi Bakery?

  • Specific questions

Specifically, this study is out to answer the following research questions

  • How does recording of financial transaction influence the performance of Njeiforbi?
  • To what extent does credit and debit posting affect the performance of Njeiforbi?
  • What is the effect of invoicing on the performance of Njeiforbi?
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