Research Article Open Access Open Access Research Article Journal of Entrepreneurship & Organization Management J o u r n a l o f E n t r e p r e n e u r s h i p & O r g a n i z a t i o n M a n a g e m e n t ISSN: 2169-026X Nyathi and Benedict, J Entrepren Organiz Manag 2017, 6:2 DOI: 10.4172/2169-026X.1000216 Volume 6 • Issue 2 • 1000216 J Entrepren Organiz Manag, an open access journal ISSN: 2169-026X *Corresponding author: Nyathi M, Faculty of Business and Management Sciences, Cape Peninsula University of Technology, South Africa, Tel: 021 460 3174; E-mail: nyathimoses87@gmail.com Recieved May 16, 2017; Accepted August 18, 2017; Published August 25, 2017 Citation: Nyathi M, Benedict OH (2017) An Analysis of Bookkeeping Practises of Micro-Entrepreneurs in the Retail Clothing Industry in Cape Town, South Africa. J Entrepren Organiz Manag 6: 216. doi: 10.4172/2169-026X.1000216 Copyright: © 2017 Nyathi M, et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. An Analysis of Bookkeeping Practises of Micro-Entrepreneurs in the Retail Clothing Industry in Cape Town, South Africa Nyathi M* and Benedict OH Faculty of Business and Management Sciences, Cape Peninsula University of Technology, South Africa Keywords: Bookkeeping practises; Micro-entrepreneurs; Retail clothing industry; Cape Town Introduction Micro-entrepreneurs’ business success has been recognised as essential for economic growth and poverty eradication. Micro- entrepreneurs contribute towards economic growth and poverty eradication through self-employment, job creation and wealth creation and promote the general welfare of the citizens [1-4]. However, previous studies have shown a worrying small business’ failure as a result of insufcient entrepreneurial skills [5-7]. To achieve a successful micro-enterprise business operation, sound bookkeeping practises are regarded as the most essential entrepreneurial skill requirement [8-12]. Bookkeeping practising is one of the inevitable duties which micro- entrepreneurs should execute in order to determine the business’ performance and proftability [1,8,10,13,14]. In this paper, a particular attention is devoted on analyzing bookkeeping practises of micro- entrepreneurs within the retail clothing industry. Businesses operate for the purpose of making profts; small businesses usually for the purpose of survival. Hence the monitoring and measurement of this expectation lies in the accountability of the business. Te remaining part of the paper proceeds as follows; theoretical perspective based on expectancy theory in relation to bookkeeping practices, then literature review on bookkeeping and micro- entrepreneurs’ records followed by the research methodology undertaken for this study. Subsequently, the fndings are presented and discussed. Finally, the paper is ended with conclusion and recommendations. Teoretical perspective expectancy theory Te expectancy theory refers to a set of decision theories of work motivation and performance based on valence, instrumentality and expectancy (VIE) model [15]. Te expectancy theory states that the levels of efort of an individual to perform an act are a function of “the strength with which he/she expects certain outcomes to be obtained from the act, times the attractiveness of the expected outcomes” [16]. Expectancy theory has three components; expectancy-efort- performance, instrumentality-performance-outcome and valence- outcome-reward [7,17,18]. Expectancy (efort-performance) refers to the perceived link between the level of efort expended and the level of resultant performance; instrumentality (performance-outcome) refers to the perceived correlation between performance and the achievement of job rewards; valence (outcome-reward) refers to the perceived desirability of the potential rewards [18-21]. Similarly, a micro- entrepreneur’s willingness to execute bookkeeping duties will depend on how the business owner perceives bookkeeping outcome and how bookkeeping practise may contribute towards business success. Previous studies on the expectancy theory [19,21,22] indicate that insights on abilities and skills infuence expectancy perceptions. Motivational efort exerted towards business success is dependent upon the entrepreneur’s belief in his/her competencies and capabilities [20,23]. Moreover, Shaver et al. [20] state that an entrepreneur’s willingness to perform certain tasks on business operations will be infuenced by the expected outcomes. “A person must believe that exerting a given amount of efort can result in the achievement of a particular level of performance” [24]. Terefore, it is the researcher’s opinion that the extent to which the micro-entrepreneur practices bookkeeping is infuenced by the business owner’s beliefs on possible bookkeeping benefts. Hence the below presumed illustrative diagram (Figure 1) is based on the expectancy theory [15]. Literature Review Bookkeeping Methods of Micro- Entrepreneurs In the following literature review are explanations and discussions Abstract Bookkeeping is regarded as a day-to-day function of a business operation in tracking cash infows and cash out fows. Micro-entrepreneurs emanate from a wide range of disciplines with or without bookkeeping knowledge; however, bookkeeping execution is inevitable in operating a sustainable business. The purpose of this paper was to analyse micro-entrepreneurs’ bookkeeping practises within the retail clothing industry in Cape Town. Data were collected by means of questionnaires under positivism approach. The sample size was n=62. The Statistical Package for Social Sciences (SPSS) was used to quantify and analyse data collected. The fndings showed that most micro-entrepreneurs do practise bookkeeping manually, but do not complete the bookkeeping cycle. Worryingly was that was that most micro- entrepreneurs indicated that decision making is based on maintained fnancial records. This translates to unstainable poor decision-making emanating from incomplete bookkeeping records which may ultimately result in business failure. To this effect, it was recommended that micro-entrepreneurs’ should engage on complete bookkeeping practises so that business decisions are based on accurate fnancial records hence insightful quality business decision outcome towards business success.