The Role Of Budgeting Techniques In Small And Mediumsized Enterprises In Ghana

Abstract

This dissertation examines the role of budgeting techniques in small and medium-sized enterprises (SMEs) in Ghana, addressing their adoption challenges, benefits, and contextual influences. Despite SMEs’ pivotal role in Ghana’s economy, financial mismanagement, especially with poor budgeting practices, hinder their growth and sustainability. Through a qualitative case study approach, semi-structured interviews were conducted with eight SMEs in Greater Accra to explore budgeting practices. Findings reveal that SMEs adopt budgeting to enhance financial control, decision-making, and resource allocation, leading to improved cash flow and profitability. However, some SMEs overlook budgeting due to its perceived complexity, limited resources, and a preference for intuitive approaches. Factors such as business size, exchange rate fluctuations, inflations, and regulatory challenges significantly shape budgeting adoption and effectiveness. Recommendations include adopting simplified budgeting frameworks (example, the 50/30/20 rule), implementing modular or priority-based budgeting, fostering financial literacy through capacity-building initiatives, and advocating for SME collaboration for shared accounting resources in order to mitigate risks and enhance financial resilience.