International Journal of Finance and Accounting 2015, 4(3): 187-194 DOI: 10.5923/j.ijfa.20150403.06 An Assessment of Financial Records Keeping Behaviour of Small Scale Businesses in Ghana: A Case Study of Bolgatanga Municipality Abudu Dawuda 1,* , Ibrahim Azeko 2 1 Bolgatanga Polytechnic, School of Business and Management Studies, Upper East Region 2 Bongo District Assembly, Upper East Region Abstract This paper focuses on financial records keeping behavior of registered Small Scale Businesses (SSBs) in the Bolgatanga Municipality. A multistage sampling method was used to select one hundred and twenty (120) respondents. As per the study, majority of SSBs do not keep proper records of their businesses, hence, inability to measure financial performance and position of their businesses. The factors that accounted for the failure of SSBs to keep proper records among others include: lack of knowledge in accounting; expensive to hire qualified accounting staff; exposing financial information for tax; time consuming and inability to quantify the value of proper records keeping and lack of internal control procedures. It was also observed that the volume and value of transactions can influence records keeping behavior of SSBs owners. The study, therefore, recommends that the National Board for Small Scale Industries (NBSSI) should assist small scale business operators to keep proper records by organizing training on proper record keeping for them. The government agencies should sensitize the small scale business operators about the need to keep proper records. A law on financial records of small scale businesses should be passed and strictly enforced. The regulatory bodies should also provide simple accounting manual for the businesses. Keywords Book keeping, Small Scale Businesses (SSBs), Financial Performance 1. Introduction A proper system of financial records keeping has become integral part of managing enterprises in today’s competitive and challenging business environment. A good financial record keeping enables business organizations to plan properly and also check for misappropriations of resources of the organization. Reference [1] explains that keeping proper books of accounts is essential to the growth and survival of a business. In order to ensure efficiency, effectiveness and the continuing survival of any business organization, management must seek for reliable, relevant, accurate and timely financial information for planning and decision making. Poor records keeping or non-availability of financial records will lead to resources mismanagement and poor cash management and this can cause the business to fail. Poor records keeping makes it difficult to differentiate between business transactions and personal transactions. It is the responsibility of business owners and managers to avoid * Corresponding author: abdawud2004@yahoo.com (Abudu Dawuda) Published online at http://journal.sapub.org/ijfa Copyright © 2015 Scientific & Academic Publishing. All Rights Reserved using assets of the business for personal use at the expense of the business [2, 3]. According to them a well-qualified accountant should be employed to carry on this task. He or she should have proper knowledge to control cash as liquidity is the key to the success of any business. Qualified Accountants play major roles in decision making process of a business. Accountants with higher skills and experience have greater influence on the decision making process of a business [4]. With their skills and experiences, they are in a good position to measure the financial performance and position of a business. This allows users especially management to plan and make economic decisions. In a developing and unstable economy like Ghana majority of the people are engaged in SSBs operations such as wholesaling, retailing and small scale manufacturing. Others include weaving, hairdressing, catering services, carpentry and dressmaking. These small scale businesses play a very vital role in the social, socio-cultural and economic development of our country more especially in the rural areas. They contribute positively to the living standards of people. Due to massive contribution of SSBs to the development of the country, the government of Ghana has established the NBSSI in 1981 by an Act of parliament (ACT 343) to support the small scale enterprises in terms of finance, exports and advisory service.