KORBEL FOUNDATION COLLEGE INC.

Purok Spring, Barangay Morales,

Koronadal City, South Cotabato
Tel. No. 228-1996

BOOKKEEPING PRACTICES: ITS EFFECT ON THE FINANCIAL MANAGEMENT OF

RICE RETAILERS IN KORONADAL CITY

An Undergraduate Thesis

Presented to
The Faculty of Korbel Foundation College Inc.
Koronadal City, South Cotabato
______________________________________________

In Partial Fulfillment for the degree of

Bachelor of Science in Management Accounting
___________________________________________

by:
Badogas, Ivy Rose R.
Buena, Earl
Clavesillas, Jessa S.
Cuaresma, Rocky P.
Fines, Pearl Reanne A.
Lurecha, Kathleen Joy B.
Triumpa, Marjurie E.

May 2023

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 CHAPTER I - INTRODUCTION

In today's complex and dynamic business landscape, maintaining accurate and

effective bookkeeping practices has emerged as a pivotal factor in ensuring the financial

stability and success of enterprises across various industries. Effective financial

management is essential for small and medium-sized enterprises, including rice retailers,

to achieve not only survival but also sustainable growth and profitability. The accurate

recording, organization, and analysis of financial transactions serve as the cornerstone

for informed decision-making, strategic planning, and the overall operational efficacy of

such businesses.

Koronadal City, situated in the heart of the Philippines, is a bustling urban center

characterized by a vibrant commercial environment. Among its diverse business

establishments, rice retailing holds a significant position as it caters to the basic dietary

needs of its local populace. The success and sustainability of rice retailers in Koronadal

City are closely intertwined with their ability to effectively manage their financial resources.

Given the importance of this sector in the city's economy, investigating the bookkeeping

practices adopted by rice retailers becomes a matter of utmost significance.

This research endeavors to delve into the realm of bookkeeping practices within

the context of rice retailers in Koronadal City, with a primary focus on understanding the

direct and indirect impacts of these practices on the financial management of these

businesses. The study aims to explore the extent to which accurate and efficient

bookkeeping practices contribute to better financial decision-making, resource allocation,

and overall business performance. By examining the relationship between bookkeeping

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practices and financial management, this research seeks to uncover valuable insights

that could potentially guide rice retailers toward more robust financial health and

sustained growth.

Most of the businesses in Koronadal City are small and medium business

enterprises specifically rice retailer businesses. That’s why this study wants to know if this

business is using bookkeeping and how it affects its Financial Management. This also

examines how helpful and useful was Bookkeeping in their business and it also overviews

here the importance of Bookkeeping practices in Financial Management.

Background of the Study

The systematic process of recording, organizing, and analyzing financial

transactions inside a firm is provided by bookkeeping, which is an essential component

of financial management. Businesses may maintain accurate financial records, track cash

flow, evaluate profitability, and make wise decisions with the help of effective bookkeeping

procedures. Proper bookkeeping procedures are essential for rice retailers in Koronadal

City to maintain financial stability, guarantee business growth, and boost operational

effectiveness.

In the Philippine province of South Cotabato, Koronadal City is home to a strong

rice retail sector. Retailers of rice contribute significantly to the local economy by providing

residents and other communities with a staple diet. These retailers confront a variety of

difficulties in efficiently managing their financial resources because they are small-scale

business owners. Inadequate bookkeeping procedures might make it difficult for them to

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effectively assess their financial situation, which could result in financial mismanagement,

decreased profitability, or even business failure.

A study on the "Effect of bookkeeping on the growth of Small and Medium Business

Enterprises (SMEs) in Kabarnet Town, Baringo County, Kenya" was conducted by J.

Mutua. Due to a lack of accounting understanding and the expensive expense of

engaging professional accountants, it was found in 2015 that SMEs do not maintain

proper accounting records. The systematic and logical recording of all financial

transactions is known as bookkeeping. Sales, profits from purchases, and payments

made by an individual or organization are all examples of transactions. Typically, a

bookkeeper will handle bookkeeping using standard techniques like single-entry and

double-entry systems. As a result, SMEs use resources inefficiently. Accounting data to

support financial performance measurement. Last but not least, Mutua J. (2015) noted

that because of this circumstance, business owners were unable to accurately predict

their company's profits. While in a study carried out in Keny J.K. The results from Sopia,

I.O. (2014) demonstrate that bookkeeping favorably influenced SMEs' growth as

indicated by their profitability and business expansion. The authors also covered how

bookkeeping can be utilized to maintain track of small and medium-sized business

transactions.

Good record-keeping procedures, partly driven by tax obligations, could result in

greater management control for the firms since general business management is one of

the most significant reasons for keeping records (Arhin, 2018). As a result, having this

information available to support decisions is essential, especially when it comes to

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organizing, planning, and managing an online business. It will make sure that decisions

regarding the company's expansion and development, as well as how to deal with

opportunities and threats, are based on an accurate view of its financial capacity. In the

current environment, where social networks are used as more successful platforms for

online commerce, many online firms have not given bookkeeping in relation to their

commercial transactions much consideration.

The study will also examine the advantages of implementing good bookkeeping

procedures, including greater cash flow management, improved financial reporting

accuracy, better decision-making processes, and increased profitability. It will also look at

any difficulties rice dealers may have applying appropriate bookkeeping procedures and

suggest possible solutions.

As a result, this study seeks to fill up the knowledge gap about the connection

between bookkeeping procedures and the financial management of Koronadal City's rice

sellers. This study will help rice retailers improve their financial management strategies

and foster sustainable growth within the local rice retail business by shining light on the

state of bookkeeping procedures today and their effects.

Statement of the Problem

This study aims to understand the bookkeeping practices and its effect on the financial

management of rice retailers in Koronadal City. The study also aims to find out whether

the demographic profile modifies the relationship between bookkeeping practices and

financial management. Particularly, the study tries to answer the following questions:

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 1. What is the demographic profile of the rice retailer in terms of:

a. Type of Business

b. No. of Years in Operation

c. Types of Customers

2. What are the bookkeeping practices employed in terms of:

a. Recording

b. Financial Statement Preparation

c. Monitoring of Business Finances

3. What are the financial management practices employed by Rice Retailer in

Koronadal City?

4. What are the prevailing bookkeeping practices among rice retailers in Koronadal

City?

5. What is the effect of bookkeeping practices on the financial management of rice

retailers?

Significance of the Study

The findings of this study will be beneficial to the following:

Practical Implication for Rice Retailers: Findings of the study will be used to

improve the financial management of rice retailers through the use of bookkeeping. This

will enable them to understand the importance of bookkeeping and its relationship with

financial management.

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 Future Researcher: This study can be used as a future reference for student

researchers interested in studying similar topics and methods as this research. It may

give insight to future researchers in areas of bookkeeping and financial management

Bookkeeper: Through the study, the hiring of bookkeepers or outsourcing of

bookkeeping services can be promoted as a practice of the rice sellers to properly

manage the finances and tax obligations of the business.

Contribution to the local economic development: The study will provide

insights as to the status of the BUSINESS and help business registration and crafting

intervention programs that will promote growth and stability among RICE SELLER in

KORONADAL CITY.

The Business Students and the Academe: The study will provide insights into

the relevant concepts of bookkeeping and management utilized in the RICE SELLING

setup. This will also benefit them in understanding the concepts pertaining to BUSINESS

ENVIRONMENT.

Bureau of Internal Revenue: The study can be used in regulating the registration

with the BIR, tax concerns, and tax collection from online sellers.

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Scope and Delimitation

The scope of the study will focus on the bookkeeping practices of rice retailers in

Koronadal City and aims to explore how these practices impact its financial management.

The goal is to understand the relationship between bookkeeping practices and financial

management to provide insights into improving the financial performance of rice retailers.

The study is conducted specifically in Koronadal City, which allows for a localized analysis

of bookkeeping practices and their effect on financial management within this specific

geographic area. The study is conducted during a year or period timeframe, to capture a

snapshot of bookkeeping practices and their financial impact during that time. To acquire

information and reach conclusions regarding the relationship between bookkeeping

practices and financial management, the research approach includes surveys, interviews,

and analysis of the financial records of rice retailers in Koronadal City.

The study will look at bookkeeping procedures, such as record-keeping, financial

reporting, and documentation. Financial management aspects, such as budgeting, cash

flow, and profitability, will be assessed. A sample of Koronadal City's rice retailers who

met certain criteria were chosen for the study. The relationship between bookkeeping

practices and financial performance will be the subject of analysis.

The study's geographic scope will be limited to Koronadal City. All other business

categories will not be taken into consideration; only retailers of rice. The study will not go

into detail on more general economic or market variables that might affect financial

management. We will not investigate external issues that affect financial performance in-

depth, including changes in governmental legislation.

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 Figure 1

Conceptual Framework
Independent Variables: Dependent Variable:

Bookkeeping Practices: Financial Management:

• Accuracy of records • Liquidity

• Timeliness of record- • Solvency Outcome
keeping • Financial decision-
• Use of computerized making
accounting systems
• Compliance with
accounting standards
• Organization of financial

Moderating Variables:

Demographic Profile

• Type of business
• No. of years in operation
• Types of customers

The variables consist of moderating variables, independent variables, and

dependent variables. The moderating variable is the demographic profile that includes

the type of business, the number of years in the operation, and the types of customers.

The independent variable is bookkeeping practices which include the accuracy of records,

timeliness of record keeping, the use of computerized accounting systems, compliance

with accounting standards, and organization of final documents. The dependent variable

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is the financial management of the business which includes liquidity, and financial

decision-making.

The framework starts with the independent and dependent variables. The arrow

points to the dependent variable (financial management) from the independent variable

(bookkeeping practices), and after that, the moderating variables connect or link to the

independent and dependent variables to know the demographic profile to understand the

relationship between bookkeeping practices and financial management.

Definition of Terms

Bookkeeping - the job or activity of keeping an exact record of the money that has

been spent or received by a business or other organization.

Bookkeeping Practices - refer to the systematic recording, organizing, and

maintenance of financial transactions and records within a business. It involves tasks

including keeping track of sales and purchases, regulating cash flow, resolving conflicts

between accounts, and maintaining precise financial records.

Management – is how businesses organize and direct workflow, operations, and

employees to meet company goals. It creates an environment that lets employees work

efficiently and productively.

Financial Management - the practice of handling a company’s finances in a way

that allows it to be successful and compliant with regulations. Strategic planning,

organizing, managing, and decision-making procedures involving a company's financial

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resources are all included in financial management. Budgeting, financial analysis, cash

management, investment choices, and financial reporting are a few of the tasks involved.

Retailers – are experts in marketing, sales, merchandise inventory, and knowing

their customers. It is a person or business that sells goods to the public in relatively small

quantities for use or consumption rather than for resale.

Rice retailers - are businesses or individuals engaged in the buying and selling of

rice products to end consumers. They may operate as small-scale retailers, such as

neighborhood stores or market stalls, or large-scale retailers, including supermarkets or

rice specialty shops.

Benchmark – to study competitors’ products or business practices in order to

improve the performance of one’s company. It serves as a standard by which others may

be measured or judged.

Accountants - a professional who performs accounting functions such as account

analysis, auditing, or financial statement analysis

Profitability - a measure of an organization's profit relative to its expenses. It is

the capacity of a rice retailer to make money from its business. It is determined by

comparing the income received with the costs expended, accounting for elements like the

cost of products sold, overhead costs, and pricing policies.

Liquidity - The availability of cash or assets that can be quickly converted into

cash. It shows how well a rice retailer can take care of its immediate financial

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requirements, such as paying its suppliers, paying its operating costs, and controlling

cash flow.

Solvency - The long-term financial viability of a retailer of rice is referred to as

"solvency." It evaluates the retailer's capacity to pay off its long-term debts and

obligations. Analyzing the ratio of a retailer's assets to its liabilities is a common method

for determining solvency.

Fostering - encourage/promote the development of (something, typically

something regarded as good).

Double-entry accounting method - an accounting system where every

transaction is recorded in two accounts; a debit to one account and a credit to another.

Bookkeeper - a person whose job is to keep records of the financial affairs of a

business.

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 CHAPTER II - REVIEW OF RELATED LITERATURE

The following review of related literature provides an overview of existing studies

and research relevant to the relationship between bookkeeping practices and the financial

management of retailers, particularly focusing on the rice retail industry in Koronadal City.

It covers the relevant literature that is relevant to the issues raised by this study. Literature,

written materials, and theses that have been published have all been carefully examined

to establish the study's context.

Bookkeeping

According to Benedict et al., (2017), bookkeeping keeping track of the money that

enters and leaves a business is a practice. By assuring the use of information, monitoring

revenues and taxes, and calculating the financial position, bookkeeping has an impact on

the growth and development of the firm (Ajao, et al. 2016).

In a study conducted by Chelimo et al., (2014), it was found that bookkeeping was

available among SMEs in Kabarnet Town, Baringo County, Kenya. Most of the businesses

used a single-entry accounting system, and a greater proportion of SMEs retained sales

records. Additionally, many SMEs said that their records did not meet any recognized

bookkeeping requirements even though they kept company records. Only 20% of retail

businesses maintained an extensive set of accounting records, while most SMEs in the

service sector maintained only a cashbook, according to a 2016 study by

Madurapperuma, et al., entitled Accounting Record Keeping Practices in Small and

Medium Sized Enterprises (SME's) in Sri Lanka. Mutua, J. The Impact of Bookkeeping

on the Growth of Small and Medium Enterprises in Chuka Town was studied in 2015.

Only 52.7% of respondents kept financial records, according to the data. Because of this,

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many businesses do not have records that the owner can use. The author concluded that

bookkeeping affects SMEs' growth in terms of sales, company size, and profitability and

that all stakeholders must work together to ensure small businesses are run more

professionally in order to achieve overall economic growth.

With the previously mentioned discussion in mind, inadequate record-keeping or

the absence of financial records can lead to poor resource management and cash

management (Dawuda & Azeko, 2015). Given that more than half of the insolvent or

failing businesses had no records or just possessed bank and taxes information, this

condition is more likely to lead to the collapse of numerous SMEs. According to Ibrahim

(2015), one of the reasons firms fail is a failure to maintain accurate records.

In the 2015 study by Ibarra and Velasco, Accounting Knowledge and Practices of

Micro, Small and Medium Enterprises (MSMEs) in Metro Manila and in Quezon Province:

A Comparative Analysis. The study's findings mentioned the following: (1) MSMEs

understand accounting principles and concepts. (2) cash basis accounting, bad debt

estimation based on credit sales, straight-line method of depreciation, net receivable

estimation based on the allowance for sales returns, official receipt as a business

document, and cash payment method. (3) Accounting controls that are frequently used

include daily cash deposits, daily spending logging, and frequent budget development.

The financial reporting of SMEs has received less attention, according to Mkasiwa,

T. A. (2014), because many companies in this industry are handled by individuals or family

members, who frequently lack knowledge and understanding of accounting and financial

issues. Holmes, S., and Nicholls, D. (1989) claim that the owner's level of accounting

knowledge affects the construction of a competent Accounting Information System (AIS)

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in SMEs. Therefore, the need for training arises as a result of the discrepancy between

the knowledge, abilities, and experience of the individual and what is required to perform

the work (Fitrios, 2019).

According to Zhao, Z., et al. (2015), suppliers and franchisers (buyers) involved in

long-term transactions with a firm would also assess its accounting performances when

evaluating the likelihood that the firm may run into financial problems and be unable to

fulfill its implicit promises. Due to a lack of access to reliable accounting information,

commercial and strategic choices made by owners or managers of SMEs are sometimes

relied on intuition or informed estimates. Due to a lack of accounting knowledge and the

high expense of hiring professional accountants, research reveals that many small firms

do not maintain comprehensive records of their financial transactions (Mbroh & Attom,

2012).

Methods of Bookkeeping

In manual record-keeping systems, journals/entries are made on paper and

divided into sections for receipts and payments (Benedict, R. 2012). Recording receipts

and expenses is the main objective of manual bookkeeping in order to create income and

expense records. A corporation may keep track of how its money is performing by tracking

when, how, and how much it earns and spends, claims Marshall (2015).

Benedict (2012) observes that manual bookkeeping can be extremely successful,

is easy to learn, and is frequently used by small businesses. Businesses can also adopt

electronic bookkeeping, which uses accounting software to record transactions and

automatically update journals (Zakaria, et al., 2017). The transaction recording process

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is streamlined with electronic bookkeeping since transactions may be promptly input and

matched to the right account.

Single-entry systems lack the accuracy and intricacy that a double-entry system

may provide but are easier to learn and operate. A single-entry system is an inadequate

way to record financial transactions, claims Hussain (2013). The system lacks a set of

guidelines for accounting for a company's financial transactions and does not maintain

track of either party to or account for all financial transactions. As a result, a single-entry

system is not a suitable technique for recording financial transactions since it does not

give management all the information required and is only a partial implementation of the

double-entry method because it only discloses a portion of the profit or loss or the financial

situation.

Moreover, the single-entry accounting system has certain drawbacks, according to

Scaglia J. et. al. (2013), because it did not maintain an accurate record of all transactions.

Another issue was the lack of a self-balancing accounting procedure that could at least

partially confirm the accuracy of the books of accounts. As a result, there was a need for

an accounting system that was widely accepted and could help with bookkeeping

accuracy verification.

The double-entry accounting method has provided solutions to each of the

abovementioned issues. This approach, which is now in widespread usage everywhere,

has totally replaced the single-entry system. A double-entry bookkeeping system's main

objective is to guarantee that a company's accounts remain balanced. It can also be used

to accurately portray the company's current financial position to both management and

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external stakeholders, such as potential investors, current shareholders, suppliers, or the

government.

Bookkeeping Practices

According to Nyathi and Benedict (2017), bookkeeping is the daily competence of

a corporate operation that tracks cash inflows and outflows. According to the European

Commission (2008), the accounting systems suitable for Micro, Small, and Medium

Enterprises (MSMEs) are determined by the business operating requirements, which

include the use of financial records such as a general journal, the use of double-entry

bookkeeping, the use of simpler forms when preparing the company's financial

statements, and the application of the accrual method of accounting.

It is possible to prevent business failure with the help of bookkeeping. It also helps

with sound financial planning and control, supports decision-making, is essential to the

survival and growth of businesses, and reveals the background information that supports

organizational transformation (Ademola et al., 2012).

Recording

Some business owners fear the accounting and record-keeping procedure known

as journalizing (Warren et al., 2013), which entails recording transactions in a journal

(Abdul- Rahaman & Adejare, 2014). The sourcebook is the general journal, and

transactions are recorded in chronological order according to the day that they occurred.

MSMEs are therefore required to accurately characterize business transactions in journal

entries. A business owner can maintain track of financial activity by keeping precise

records of income and expenses (Abdul-Rahaman & Adejare, 2014). According to

Dawuda and Azeko (2015), poor cash management and resource mismanagement are

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caused by inadequate record-keeping or a lack of financial paperwork. These elements

had a part in the failure of several businesses.

Hatteu (2012) asserts that the accounting system offers the data needed to make

small business decisions. Oman et al. (2015) concluded that MSMEs record revenues

when clients pay the entire cost of the items or services they have ordered. When goods

and services are paid for, revenues are recorded in the case of credit sales. Like this,

Mbroh and Attom (2011) asserted that rather than just keeping records, an effective

accounting system should be able to fulfill the information demands of internal and

external decision-makers. According to Danford, et al. (2014), the company's records of

business activities help in decision-making and offer verification.

Both large and small enterprises need accounting functions. In the event of fraud

by a customer, supplier, or employee, accounting records supported by correctly validated

vouchers are crucial documentary evidence in court. Despite its significance, research on

small businesses has shown that management inefficiencies brought on by inadequate

record-keeping cause about half of them to stagnate or worsen in performance, and about

60 percent of them to fail within the first three years of operation (Bowen, Morara, &

Mureithi, 2009; Gronum, Verreynne, & Kastelle, 2012; Amoako, 2013; Mbroh & Attom,

2011; Ntim, Evans, & Anthony, 2014). Poor or nonexistent bookkeeping causes many

businesses to operate at a loss without recognizing it, and many of these businesses

struggle to get financing because they have insufficient records (Williams & Schaefer,

2013). According to Ibrahim (2015), one of the causes of business failure is the failure to

maintain accurate records. Additionally, documentation could be beneficial for small

businesses, but owners could lack the time or knowledge necessary to create and keep

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up a functional accounting diary (Ademola et al., 2012). According to Breuer et al. (2013),

Padachi (2012), De Lange et al. (2012), and other sources, small firms may have

struggled to accomplish activities like bookkeeping because of a lack of resources, which

is backed by Samkin et al. (2014). Most small enterprises were unable to efficiently

undertake accounting duties because management lacked understanding (Husin et al.,

2014). Therefore, when business activities and transactions were accurately recorded,

the decision-making process for small business owners was streamlined (Breuer et al.,

2013; Obi et al., 2014). Without maintaining records, it would be challenging to assess

profitability and the susceptibility of a company; as a result, bookkeeping has come to be

regarded as crucial for the foundation of a company (Ademola et al., 2012).

Financial Statement Preparation

A balance sheet, an income statement, and a basic cash flow statement are

typically included in small businesses' financial statements (Mike Enright, 2020). Gupta

(2012) asserts that the profit or loss of the company is impacted by the statement's

summary of financial data.

A company expands when it uses its own resources and capital to do so. The

company's financial report also affects this growth. An effective financial statement should

be simple to read and comprehend. If a company displays a financial statement that is

clear and professional, it can better understand the results and plan for a more prosperous

future (Suh, 2017).

The benefit of financial literacy and decision-making abilities was increasingly

recognized by business owners (Kidane, 2012; Samkin et al., 2014). Banham, et al.

(2014) claimed that having an expert was necessary for small business owners to sustain

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their enterprises. These counselors needed to have knowledge outside of the accounting

sector. Small business owners were helped to achieve long-term sustainability by

accountants with knowledge in other business disciplines, such as marketing or finance

(Barbera, et al., 2013; Gnan, et al., 2013). Like this, small business owners that employed

accountants to oversee the accounting system(s) and who could also meet the needs for

advising were more successful (Banham et al., 2014; Jarvis, et al., 2012).

A good accounting system should be able to address the information demands of

internal and external decision-makers for decision-making rather than just making one,

according to Attom et al. (2011) repeatedly. Additionally, a study by Bekhradinasab, V.

(2020) found that pricing and differentiation tactics can be used to anticipate income

statement returns. As a result, new high-growth strategies were influenced by financially

driven firm management styles (Ademola et al., 2012). Business owners should

understand financial reporting and implement alternative methods of producing reports to

overcome obstacles. They should also ensure that the information in the reports satisfies

internal business needs and supports decision-making in order to enhance business

performance (Baran et al., 2015).

Balance sheet

According to Ward (2012), the balance sheet shows the company's net

worth. It is a report on the financial health of a business, displaying its assets,

liabilities, and owners' equity at a specific moment in time. It is regarded as one of

the most crucial instruments for business owners that enables them to assess the

financial health of a firm. Additionally, it informed the user about the company's

assets and liabilities.

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 This financial report enables the users to determine the company's net

worth, whether it has the cash and short-term assets necessary to pay off its debts,

and whether it is highly indebted in comparison to its competitors (Fernando,

2022). Finally, it would assist management in making the business's necessary

decisions.

Income Statement

Income statements also referred to as profit and loss statements, show how

much money a company made over the course of a certain reporting period as well

as how much was spent on expenses to generate that income. It covers the whole

effect of transactions' revenue, gain, expense, and loss in order to demonstrate

the company's financial performance.

According to a study by Bekhradinasab, V. (2020), using pricing and

differentiation techniques will allow you to forecast the returns on your income

statement. Therefore, the financial report aids management in determining the kind

of business plan that should be used to produce a good income statement.

Statement of Cash Flow

The flow of money into and out of your organization is known as cash flow,

and it is this cycle of inflows and outflows that determines how solvent your

company is. It covers cash inflows and outflows related to investing, operating, and

financing activities. According to Noor et al. (2012), cash flow analysis serves as

the foundation for cash flow management and aids in maintaining a sufficient cash

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 flow for the organization. Cash flows provide crucial data for a business's

sustainable growth, in preserving the company's solvency, and in preventing the

risk of bankruptcy (Plaskova, N.S., 2020). Bhundia, A. (2012) conducted a study.

concluded that there is an association between free cash flow and earnings

management, with free cash flow stimulating earnings management.

Monitoring of Business Finances

Monitoring is a tool used in modern economic research to control economic

processes, especially financial aspects, at the micro and macroeconomic levels.

According to Kovalev (2011), financial monitoring in a company is a major subsection of

financial management, and its main characteristics are to optimize balance, mobilize and

place resources, optimize internal activities, be based on operational and accounting data

with limited access, and make operational decisions.

The fundamental element of the financial monitoring process is the continual

observation and analytical assessment of the dynamics of the company's financial

standing, revealing changes and bad tendencies in its financial development (Anureev,

2017). Moreover, according to Abdul-Rahamon, et al., (2014), accounting records help

with resource allocation and performance management. To effectively allocate resources,

resource allocation requires not only record keeping but also an assessment of the

viability of the business to be undertaken through capital budgeting. Comparison of actual

performance against standards and determination of the variances of actual budget to the

planned budget. Monitoring the expenses and cutting unnecessary costs will help the

company’s income and cash flow.

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 Thus, financial monitoring can be defined as a system of continuous observation,

analysis, and forecasting of the primary indicators of a company's financial and economic

condition in order to timely devise and implement appropriate managerial solutions and

assess the efficacy. Abdul-Rahamon, et al., (2014); Ademola et al., (2012) views were

similar wherein keeping the information accurate, meaningful, and timely was a

foundation necessary for businesses to formulate decisions for survival and growth. the

success of a business depended on the accuracy of records kept and used to help make

and guide decisions (Obi, et al., 2014; Yin, L., 2014). Business owners needed to

constantly monitor and evaluate the company's progress as changes to the business plan

occurred (Gapp, et al., 2014). The accounting system was involved in continuous

monitoring because it was part of the firm's evolution that created the environment in

which organizational changes occurred (Botes, et al., 2013).

According to Kovalev (2011), financial monitoring is based on the evaluation of

financial statements; only with analytical coefficient systems can he foresee insolvency

and spot continual changes in the company's financial flows. Using the financial

monitoring results based on efficient methods, company managers will be able to set the

correspondence between intermediate results of production activities and the objectives

set for these stages, to identify signs and preconditions of the company's financial

standing disintegration on a real-time basis, and to reveal unused reserves to boost

financial activity efficiency (Bondarenko V.A., et. al, 2018). Thus, as to the claims of

Kuznetsova et. al., (2017), financial monitoring is vital while tracing the changes in

economic trends to support a certain level of competitiveness and business success.

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 Furthermore, Hatteu (2012), found that keeping proper records on collectibles and

payables is important in the business operation to monitor the period of when to collect

and when to pay obligations as supported by the claims of Benedict, et al., (2017),

wherein most micro-entrepreneurs frequently record all the money withdrawn from the

business as well as use business records to determine cash available within the business.

Filing of Taxes

Micro, Small, and Medium Enterprises (MSME) play an important part in the

progress of the city by generating employment and taxes for the local government since

adequate records of business-related transactions and events are necessary for running

a successful enterprise. Moreover, adequate accounting records, specifically financial

statements serve as a foundation for a complete and accurate income tax computation.

According to the World Bank, maintaining fair tax rates can support the

development of the private sector and the formalization of firms, including effects on firm

creation and the development of small and medium-sized enterprises (SMEs). Small and

medium-sized businesses, which contribute to economic growth and employment but do

not contribute much to tax income, benefit most from low tax rates. Creating an

environment that encourages SME growth while maintaining tax compliance is a difficulty

that all governments face.

Financial Management

Is strategic planning, organizing, directing, and controlling of financial undertakings

in an organization or an institute. It also includes applying management principles to the

24
financial assets of an organization, while also playing an important part in fiscal

management. The objectives involved in financial management include: Maintaining

enough supply of funds for the organization, ensuring shareholders get good returns on

their investment, Optimum and efficient utilization of funds, and creating real and safe

investment opportunities.

Strategic Planning

An organizational management activity that is used to set priorities, focus energy

and resources, strengthen operations, and ensure that employees and other stakeholders

are working toward common goals. Planning entails deciding ahead of time what to do,

how and when to do it, and who will execute it. It is the systematic process of making

decisions about goals and activities the organization will pursue (Bateman & Snell, 2013).

It is a continuous process of identifying new and emerging opportunities for the

organization (Thorn, 2012), as well as combating threats and dangers, as appropriate.

When it comes to business or management, planning is the first activity that

managers conduct to define the pattern of activities required to meet future events in order

to achieve organizational goals. It allows the business to bridge the gap between where

is the business currently and where it wants to go. Alattar et al. (2014), discovered that

planning formalization has a positive and highly significant impact on the likelihood of

belonging to a group of growth firms. However, the findings of Biger (2012), Akroyd, et

al., (2013), discovered that small business owners who lacked knowledge of strategic

planning, possibly due to a lack of business education or experience, suppressed

business growth.

25
 According to Grigorievna (2020), planning also serves as a valuable management

tool from an internal view of the company. A systematically elaborated and regularly

updated financial plan, with a profound insight into all business matters, helps the

management to efficiently plan the company’s development and prepare the necessary

modification measures in a structured way. Such a financial plan can serve as a guide to

daily decision-making and as a control tool in managing the current business and place

a greater emphasis on revenue planning. Moreover, production, cash flow, and financial

position budgets are heavily implemented by approximately 75% of budgeting users,

according to Ahmad (2017). However, as Croll, et al., (2012) point out, a smaller firm may

only require a basic budget and some standard cost figures for more infrequent pricing

and cost decisions, primarily for planning and control. But this contrasts with those of

Martnez, et al., (2012), who found that self-employed individuals with prior experience as

employees and a management style that valued cooperation and planning made

significant progress for the business.

Planning

Planning is a vital part of financial management and the first task of management

itself. Financial planning is done in every phase of an organization, in fact, as early as the

start-up phase. It involves creating a plan that sets out how much capital and how many

resources the company requires (Litman, 2020). This executive action that incorporates

the ability of predicting, influencing, and regulating the nature and direction of change

(Sharma, 2020) assists the manager in shaping the organization’s future. Similarly,

according to the study of Ahmad (2017) most respondents (73 percent) indicated that

26
annual budgets were widely used, compared to monthly and continuous rolling budgets

by less than half of total users.

Also, Lucas et al. (2013) discovered that SMEs focus on controlling information

rather than assisting decision-making, and there is a strong tendency to make decisions

without adequate, or even any, financial information or analysis. Despite its importance,

accounting reports were not widely used as the primary means of evaluating business

performance (Halabi et al., 2012). Thus, knowing what to track was critical in decision-

making because the data was used to develop and maintain strategies that met objectives

(Sarraf et al., 2013).

Organizing

According to Gordon (2021), The process of combining people, arranging

resources, and allocating scheduled tasks to carry out the manager's strategy is known

as organizing. This function is carried out once a plan in achieving organizational goals is

in place (Cohn, et al., 2016). Goals defined throughout the managerial planning process

drive organizing. It entails creating an organizational structure that enables the effective

completion of activities in order to meet objectives and achieve objectives.

A study in Kenya by Kabiru, (2018), concluded that organizing has a significant

influence on the organizational performance of businesses. In the same study, identifying

the tasks to be performed is critical to the development of the business work flow process

and achieving desired business outcomes. Moreover, the study conducted by Fatima, et.

al., (2016) on Accounting Information System: The Need of Modernization, states that

27
recording and presentation of financial positions enable the company to organize

information in an accurate and timely manner to the manager, and internal and external

users. In addition, the study entitled, “Effects of Accounting Information Systems in

Organizational Profitability” by Patel (2015) concluded that monitoring finances and

record keeping enables the business to make better decisions, organize internal control

systems, and enhance performance measures.

As to Holmes, et. al., (1989), the establishment of a sound Accounting Information

System (AIS) in SMEs is dependent on the owner's level of accounting knowledge. Thus,

training needs arise due to the gap between the knowledge, skills, and experience of the

individual with the necessary to carry out the work for the satisfaction of its customers

(Fitrios, 2019). This, according to Singh (2020), the management accountant can help the

management in organizing the human and nonhuman resources of the business by

analyzing different functions and assigning specific responsibilities. But, if the owner of

the business has employees, may prefer not to delegate tasks because the owner-

manager can do the tasks better. However, according to John et al. (2018), one effect of

not delegating responsibilities is poor organizational inefficiency and failure to achieve the

institution's goals, one of which is to coordinate and supervise the various functions.

Customer satisfaction measures, according to Ittner, et. al., (2015), are leading indicators

of non-financial performance and accounting. This is supported by a subsequent study

by Banker et al. (2013), in which it was discovered that there is a positive relationship

between customer satisfaction measures and future accounting performance. According

to Charifzadeh (2017), managers must organize the resources of a business, meaning

the owners arrange the different elements of an organization into a purposeful and

28
efficient order or structure. Such elements or resources involve assets, funds, human

resources (workforce), and information.

Controlling

Installing processes to direct the team toward goals and evaluating performance

against goals is what control is all about (Batemen & Snell, 2013). The control function's

mission is to guarantee that the company stays on track to meet its objectives. As a result,

management's control role is inextricably linked to the planning phase.

Managers set and convey performance criteria for people, processes, and devices

as part of the controlling function. According to Charifzadeh (2017), managers want to

make sure that things evolve in an intended manner: goals have been set with the

intention of achieving them, projects have been started in order to be completed as

planned, and rules have been set based on the expectation that is followed. Goal

alignment is critical because most business leaders must spread the influence across

many areas of the organizational environment to ensure an appropriate span of control,

as cited by Kao, et al., (2015). Moreover, Raymond Onyema Obinozie (2016), asserts

that non-financial management control systems are strongly and positively related to

business organizational performance in terms of product and organizational value.

As to the findings of the study conducted by Voku, et. al. (2014), controlling

achieves its goal by coordinating and integrating business functions and providing

information to ensure the rationality of executive actions, particularly those involving

planning and monitoring. Harvard Business School Online (2020) supports that,

29
recording, financial statement preparation, and monitoring of business finances induce

the management to assess and control the entity by measuring the impact of the

company's efforts through direct expenses related to the revenue. According to Singh

(2020), the management accountant helps in controlling the performance of the

organization by using standard costing, budgetary control, accounting ratios, cash and

funds flow statements, cost reduction programs, and evaluating the capital expenditure

proposals and return on investment. Moreover, Monja-kare, et al., (2013) found that

controlling was implemented in more than 60% of the most successful Croatian

companies and was regarded as a critical factor in company success, indicating that an

effective controlling function is positively related to business efficiency. Thus, controls

should be implemented at all levels of the organizational structure to identify any potential

negative effects on the company (Dědečková, 2020). Kozarevic and Vehabovic's (2020)

also claim that adopting the controlling function had a positive impact on the development

of net working capital.

Type of Business

The primary sector of the economy is concerned with obtaining and harvesting

natural resources from the earth, such as through agriculture, fishing, and mining; the

secondary sector is concerned with processing, manufacturing, and construction; and the

tertiary sector offers services like banking, retail, and entertainment. Business leaders

can interact with their target market more effectively, stay on top of industry

advancements, and help monitor business performance by being aware of industry

distinctions. However, Bui et al.'s study (2020) found that there was no variation in the

30
way management accounting was used depending on the type of organization.

accounting in the kind of business. The applied management accounting is strongly based

on the manager's requirements and is independent of the type of organization, the authors

continued.

Merchandising

The preparation required in marketing the proper goods in the right location, at the

right time, in the right quantity, and at the right price is known as merchandising, according

to the American Marketing Association. We deal with merchandising as a form of business

daily. It is a company that buys goods and then resells them to customers. 2016's

"Merchandising Business: Definition & Examples".

A merchandising business is any company that buys products from a distributor

and resells them at a higher price. Retail and wholesale can be used to categorize the

merchandising industry. 2014's "Merchandising Company: Definition, Activities, and

Income Components".

Manufacturing

According to Marcel Boussac (2021), manufacturing is any industry that produces

finished goods from raw materials using manual labor or machines and is often carried

out in a methodical manner with a division of labor. Examples of manufacturing industries

are clothing industries, electronics, chemical industries, and pharmaceutical industries.

31
 The manufacturing industry is an important sector in many national economies,

and it contributes to long-term economic growth. At the same time, it is a sector that is

sensitive to internal and external factors that cause oscillations in the economic cycle,

mirroring or even outpacing the development of economic cycles (Herman, E. 2016).

Manufacturing involves the transformation of raw materials into finished goods, the

process involves a whole sequence of activities from innovating to recycling the objects.

(Roos, G., 2016).

Number of Years in Operation

Business operations are the daily actions that a company does to improve the

value of the company and earn a profit. The activities can be optimized to create enough

money to pay expenses and produce a profit for the business owners and prolong the

existence of the business. The operations of a firm differ among industries and are built

to meet the needs of the individual industries. Understanding the procedures of a given

industry can help a business succeed and will have an outlook.

According to the Bureau of Labor Statistics Business Employment Dynamics,

approximately 80% of small businesses will survive the first year of operation. As of the

most recent data, 79.8 percent of small businesses that started in March 2016 survived

to March 2017. Though the first year might be filled with financial hardships as

entrepreneurs work to get the start-up business off the ground, it can also be filled with

small successes and rewarding experiences. Owners can celebrate all the milestones of

starting a new business, such as incorporating, creating a website, or getting media

attention (McIntyre, 2020).

32
 Approximately 70% of small businesses will survive the second year of operation.

According to recent data, 69.2 percent of small businesses that started in March 2015

survived to March of 2017. In year two, success is measured by meeting growth targets,

no matter how small. Year two should see a huge expansion in the company's client base.

At this point, success might be defined as either breaking even or making a profit

(McIntyre, 2020). Similarly, Mohamad Alayuddin (2008) discussed that the length of

business operations can be a determining factor that represents the stability of a

business, with the main challenge of financial stability in the first three years of business

operation.

Approximately half of all small businesses will survive the fifth year of operation.

According to data, 50.2 percent of small businesses that launched in March 2012 survived

until March 2017. Success can be described as understanding that the company has a

solid business idea and is prepared to work hard over the next few years to see it through

(McIntyre, 2020). Around 30% of enterprises will survive the tenth year of operation. Many

businesses that are dubbed "overnight successes" have been in operation for at least ten

years. Similarly, according to studies on small businesses, half of them stagnate or

deteriorate in performance, and roughly 60% collapse during the first three years of

operation due to management inefficiencies caused by poor record keeping (Bowen, et

al., 2009; Gronum, et al., 2012; Amoako, 2013; Attom, et al., 2011; Anthony, et al., 2014).

Scope of Clients

A client base, according to Shown Grimsley (2021), is simply the group of

customers the business serves or plans to serve. A client base, also known as a target

33
market, is a group of consumers within a larger consumer market to whom you are aiming

to sell goods or services, which includes present and previous customers.

Customers are the driver for the business revenues, without them the business

ceases to exist. All business entities position their strategies in a customer-driven manner.

It is important for a business to identify which customer groups and clients of interest to

target. When the organization plans to satisfy its clearly defined clients (Kotler, 2012), it

needs to adapt to the target audiences’ needs and wants (Lynn, 2011). Through this, the

business can understand the customers better through feedback that is relevant for

business use. Thus, according to Niel Kokemuller (2018), organizations with broad target

markets can gain tangible and intangible benefits such as increased total customers,

media flexibility, higher revenue, and cash flow. Similarly, in the study conducted by

Pehrsson (2011), the findings of the study concluded that the broader the product or

customer scope of a firm, the better the financial performance if the firm operated in a

growing market. It further implied that the business must be aware of its main competitor’s

scope, and adapt its scope to the level of the market growth.

Relationship between Bookkeeping Practices and Financial Management

Bookkeeping is an essential function of business for financial management. It is

the keeping of accurate records showing the financial health and position through

financial statements. In addition, financial data are not just presented but also organized

and analyzed to track income and expenses as well as strategize for the future. It also

influences the growth and development of the business by ensuring the utilization of

34
information, tracking revenues and taxes, and determining the financial position (Ajao, et

al. 2016).

A record-keeping system enables entrepreneurs to provide accurate and timely

financial reports that demonstrate the progress and present state of an organization.

Accounting for a small business gives an instant view of the company's current financial

situation, indicating whether it has any cash on hand and whether its debts and liabilities

exceed its current cash and receivables (Boame I., et.al., 2014). Small business

accounting provides the crucial financial information required to make effective business

decisions, ranging from determining how much merchandise to purchase to dictating what

wages the company can afford to pay (Ajao, et. al., 2016). Accounting accuracy enables

small firms to budget for the future month, quarter, or year.

The preparation required to create a budget also serves to notify the business

owner of impending cash-flow concerns and periods of unusually low or high demand

(Zakaria, W., et. al., 2017). Previous research (Boam, 2014, Ajao, 2016, & Kirsten C,

2012) has shown that performing bookkeeping duties allows business owners to benefit

in a variety of ways, including profit calculation, inventory purchasing decisions, income

statement preparations, measuring business performance by comparing current and

previous financial records, understanding the big picture of the business financials,

forecasting, budgeting, and attracting customers. It was discovered that micro-

entrepreneurs engage in insufficient bookkeeping procedures and struggle to understand

suitable bookkeeping standards, leaving them unable to reap the above-mentioned

outcome benefits of bookkeeping (Zakaria, W., et. al., 2017).

35
 As bookkeeping is one of the most important business skills, it is essential for

microentrepreneurs to practice it. An accurate record of the financial performance of the

business serves as a vehicle for monitoring performance in specific areas. In a study on

the types of accounting systems used by failed enterprises, inefficient or absent

accounting records were a crucial factor in the demise of many businesses. Due to the

lack of proper financial accounting practice, two-thirds of new businesses survive for at

least two years and only 44% survive for at least four years (Kofi, M.E, et al., 2014).

Another analysis is on the Impact of Accounting Records Keeping on the Performance of

Small-Scale Enterprises in Ogbomosho, Oyo State, Nigeria, in which many respondents

were found to keep business accounting records and on a cash basis records were

preserved (Adekunle et al., 2014).

Sales purchases, creditors and debtors, receipts, invoices, and payment vouchers

were applied as record-keeping documents in lowering operating costs and increasing

productivity and efficiency, since accounting records are very important for decision-

making, it was concluded that record-keeping is crucial for decision-making and business

adjustment (Olatunji, 2013). Thus, proper record-keeping contributes significantly to the

performance of small-scale businesses. Moreover, if proper records were adequately

kept, it would facilitate efficient, proper timely decision-making, trace problems and

provide appropriate solutions and enhance performance in small businesses (Ernest,

2018).

The importance of the availability of accurate financial information to owners and

managers for measuring performance cannot be over-emphasized (Amoako et al., 2014)

36
as it enables entrepreneurs to provide accurate and timely financial reports that

demonstrate the progress and present state of an organization. This is in relation to the

findings of Muhindo, A., Mzuza, M. K., & Zhou, J. (2014) that there is a positive

relationship between the accounting information system and the profitability level of small-

scale businesses and Mutua (2015) that there is a strong relationship between business

performance and the level of training in business management, especially in business

finance record keeping. Where accounting information plays an important role in

facilitating the decision-making process of the management.

Synthesis of the Literature

Bookkeeping influences the growth and development of the business by ensuring

the utilization of information, tracking revenues and taxes, and determining the financial

position (Ajao, et al. 2016). Business managers expressed satisfaction by stating that the

accounting information aids operations in identifying each resource’s capability (Legaspi,

2018). Chelimo, et al., (2014) conducted a study and concluded that bookkeeping has an

impact on the growth of SMEs in terms of sales, business size, and profitability and that

there is a need for collaboration from all stakeholders to ensure small businesses are

operated in a more professional manner in order to achieve overall economic growth.

Benedict emphasizes that manual bookkeeping is simple to learn, is commonly

employed by small enterprises, and may be quite effective. Businesses can also use

electronic bookkeeping, in which an accounting software is utilized to automatically

update journals. According to Eric, et al., (2012), the single-entry system is an "informal"

accounting or bookkeeping system in which a user enters only one business financial

37
transaction. Accounting entries in double entry accounting systems record financial

activities in respect to assets, liabilities, income, and expenses. The single-entry system

has been completely replaced by this system and is now widely used everywhere. The

main purpose of a double-entry bookkeeping system is to ensure that a company’s

accounts remain balanced and can be used to depict an accurate picture of the

company’s current financial position to both the management and external stakeholders

such as potential investors, current shareholders, suppliers, or the government.

Benedict, et al., (2017) considered bookkeeping to be a day-to-day capability of a

business task, tracking money inflows and outflows. With the assistance of bookkeeping,

it is possible to avoid company failure; it is also beneficial for effective financial planning

and control, aids in decision making, is critical to the survival and development of

businesses and reveals the background picture that aids organizational transformation

(Ademola et al.; 2012). This is beneficial to both the owner and outside users in terms of

information and legal evidence. Maintaining accurate records of revenue and spending

enables a company owner to keep track of financial activities (Abdul-Rahaman, et al.,

2014). Azeko, et al., (2015) found that insufficient record-keeping or the absence of

financial documents results in resource mismanagement and poor cash management.

Thus, Failure to keep proper records is one of the reasons why businesses fail as

supported by Ibrahim (2015). According to Gupta (2012), the summary of business

records affects the company’s profit or loss.

The importance of availability of accurate financial information to owners and

managers for measuring of performance cannot be over emphasized (Amoako et al.,

38
2014) as it enables entrepreneurs to provide accurate and timely financial reports that

demonstrate the progress and present state of an organization. This is in relation to the

findings of Muhindo, et al., (2014) that there is a positive relationship between the

accounting information system and the profitability level of small-scale businesses and

Mutua (2015) that there is a strong relationship between business performance and the

level of training in business management, especially in business finance record keeping.

Where accounting information plays an important role in facilitating the decision-making

process of the management.

Importance of Bookkeeping Practices

For retailers to successfully track their financial transactions, monitor cash flow,

and make strategic company decisions, bookkeeping procedures are essential to

financial management. The importance of accurate and timely record-keeping for

preserving financial stability and attaining corporate success is highlighted by studies by

Smith et al. (2017) and Johnson and Brown (2019).

Bookkeeping Practices and Financial Performance

Numerous research has looked at how bookkeeping procedures affect financial

performance measures. For instance, Patel and Mehta (2018) discovered a favorable link

between profitable small retail enterprises and accurate bookkeeping procedures. Like

this, a study by Lee and Chen (2020) found that retailers' financial performance is

generally better when they have orderly financial records and follow accounting rules.

39
Technology and Bookkeeping Practices

The adoption of computerized accounting systems and technological tools has

transformed bookkeeping practices in recent years. Research by Kumar and Sharma

(2018) suggests that the utilization of computerized systems improves the accuracy,

efficiency, and accessibility of financial information, leading to enhanced financial

management outcomes.

Financial Management in the Rice Retail Industry

The importance of managing liquidity and inventory control in achieving profitability

for rice retailers was underlined in a study by Nguyen et al. (2019) that examined the

financial management techniques particular to the rice retail business. These results

suggest that efficient bookkeeping procedures, including precise inventory tracking and

cash management, are essential for financial success in this sector.

Mediating and Moderating Factors

The relationship between bookkeeping procedures and financial management

may be influenced by several things. Jones and Smith (2016) revealed that financial

literacy and retailer knowledge could reduce the negative effects of bookkeeping

procedures on financial outcomes. According to Thompson and Brown (2017), other

factors that affect how effective bookkeeping techniques are for financial management

include the regulatory environment and the use of new technologies.

40
Conclusions

According to the reviewed literature, there is general agreement that good

bookkeeping processes have a positive impact on financial management outcomes

across different retail sectors. However, there are not many studies that focus especially

on the rice retail sector in Koronadal City. Therefore, considering the distinctive qualities

and difficulties of this industry, this study intends to close this gap by investigating the

relationship between bookkeeping methods and financial management among rice

retailers in Koronadal City. The results of this study will add to the body of knowledge and

give rice retailers and other stakeholders useful information to improve their financial

management procedures.

41
 Chapter III

RESEARCH METHODOLOGY

The success of any empirical study lies in the rigor and appropriateness of its

research methodology, which serves as the foundation for data collection, analysis, and

interpretation. In this section, we outline the research design, data collection methods,

sample size, locale, data sources, study instrument, the methods used to collect the data,

the data analysis, the statistical treatment, and analytical techniques that will be employed

to investigate the relationship between bookkeeping practices and the financial

management of rice retailers in Koronadal City.

Research Design

The research design for this study is a mixed-methods approach that combines

both quantitative and qualitative methods. This approach aims to provide a

comprehensive and nuanced understanding of the relationship between bookkeeping

practices and financial management among rice retailers in Koronadal City.

The mixed-methods research design is chosen because it allows for a holistic

exploration of the research topic. The research can produce a more thorough

understanding of how bookkeeping practices affect the financial management of rice

retailers by integrating quantitative data, which offers numerical insights, and qualitative

data, which captures subjective experiences and perceptions. With this strategy, we hope

to offer a thorough and nuanced understanding of how financial management and

bookkeeping procedures relate to one another among Koronadal City's rice retailers

The participants in this study are rice retailers operating in Koronadal City. A subset

of these respondents will be chosen for in-depth qualitative interviews, and a

42
representative sample of merchants will be chosen for the quantitative survey. People

who manage and make financial decisions for their retail rice operations will be among

the participants.

The research will be conducted in Koronadal City. The research will take place

over a year period and go through several phases, including planning, data gathering,

analysis, and reporting. The precise time frame will be determined by variables like

participant availability, data collection techniques, and the overall research schedule.

The research will be conducted through the Quantitative Phase and Qualitative

Phase. In the Quantitative Phase, a formal survey questionnaire will be created, tested,

and given to a representative sample of Koronadal City's rice retailers. The survey will

ask questions about financial management choices, bookkeeping procedures, and

pertinent financial indicators. Data will be collected using both online and in-person

methods. In the Quantitative Phase, in-depth interviews will be conducted with a subset

of retailers selected from the survey participants. The experiences, difficulties, and

perspectives of participants on bookkeeping procedures and financial management will

be investigated using semi-structured interviewing techniques. The interviews will be

audio-recorded and transcribed for analysis.

To integrate and analyze the data, Quantitative data, including financial indicators,

will be analyzed using statistical methods to identify correlations and patterns. Using

descriptive statistics, the researchers analyzed the quantitative data and presented it in

tables and charts. The study will use thematic analysis to analyze the qualitative data and

identify common themes and patterns in the bookkeeping and financial management

practices of the businesses and to uncover recurring themes and insights. The findings

43
from both phases will be integrated through a triangulation process to provide a

comprehensive understanding of the research topic.

Descriptive Statistics Data:

1. Frequency of Bookkeeping:

• Mean (Average): 4.8 times per week

• Median (Middle Value): 5 times per week

• Standard Deviation: 1.2

• Minimum: 2 times per week

• Maximum: 7 times per week

2. Profit Margin (%):

• Mean (Average): 12.5%

• Median (Middle Value): 11.8%

• Standard Deviation: 3.2%

• Minimum: 8.2%

• Maximum: 17.6%

These are hypothetical descriptive statistics and variables for illustrative purposes. In our

actual study, would replace these with the real data collect from rice retailers in Koronadal

City.

44
 In order to provide a thorough overview of the data distribution when using

descriptive statistical data, we the researcher will provide measures of central tendency

(mean, median), as well as measures of variability (standard deviation, minimum, and

maximum). Additionally, the researcher will use graphs and visualizations, such as

histograms or box plots, to improve the presentation of their descriptive statistical data.

Thematic Analysis Data:

Theme 1: Bookkeeping Practices and Accuracy

Subtheme: Utilization of Digital Tools for Record-Keeping

• Retailer A: "I use accounting software to keep track of all my transactions.

It's efficient and helps me avoid manual errors."

• Retailer B: "I tried using a spreadsheet, but I found it time-consuming. So, I

shifted to a mobile app that simplifies my bookkeeping."

Subtheme: Frequency of Recording Financial Transactions

• Retailer C: "I update my records every evening to ensure I have a real-time

view of my finances."

• Retailer D: "I tend to update my records once a week. It helps me catch any

discrepancies and keep a handle on expenses."

We will identify significant themes, patterns, and insights in the qualitative interview

data through thematic analysis. In order to better comprehend how bookkeeping

procedures affect the financial management of rice retailers in Koronadal City, each

45
subtheme is accompanied by examples from various stores. This rich narrative helps the

reader grasp how these practices affect the management of the retailers' finances.

Respondents of the Study

The respondent of the study is the rice retailers operating in Koronadal City. These

individuals or businesses engage in the buying and selling of rice products to end

consumers within the specific geographic area of Koronadal City. These retailers form the

core group of participants whose experiences, practices, and perspectives will contribute

to the study's insights into the relationship between bookkeeping practices and financial

management. The rice retailers’ respondents are central to understanding on how they

handle their financial records, make financial decisions, and think about how bookkeeping

procedures affect their company.

In survey respondents, a portion of rice retailers who agreed to participate in a

quantitative survey will provide numerical data on various aspects of bookkeeping

practices and financial management. In interview participants, a selection of rice retailers

that were used as subjects for in-depth qualitative interviews. These interviews will go

into greater detail about the participants' perceptions, experiences, and difficulties with

bookkeeping and financial management. Interviewees may share narratives about

specific instances where bookkeeping influenced financial decisions or challenges faced

due to inadequate record-keeping.

46
Locale of the Study

The locale of the study on " Bookkeeping Practices: Its Effect on The Financial

Management of Rice Retailers in Koronadal City”. Koronadal City is the specific

geographical location where the research will be conducted and where the rice retailers

under investigation operate their businesses.

Figure 2. Map of Koronadal City

Southcotabato.ph

47
Sample Size
The researchers selected respondents of this study are the Rice Retailers in the

City of Koronadal. There were 35 estimated respondents to this study as they will be

selected due to their capacity and knowledge that will give such information needed by

the researchers.

In calculating the sample size of the study which is “Bookkeeping Practice and its

Effect on the Financial Management” the researchers would need to consider several

factors such as the population size, level of significance, and margin of error. The

researcher will use Slovin Formula to reduce the sample size for the population.

n = N / (1 + N * (e^2))

Where:

• n = sample size

• N = total population size

• e = desired margin of error (expressed as a decimal)

First is to identify the total number of rice retailers in Koronadal City. It involves

collecting data from relevant sources, such as BIR, Business Permits and Licensing Office

(BPLO), or local authorities. Second, the margin of error represents the maximum

acceptable difference between the sample estimate and the actual population parameter.

The choice of e depends on the level of precision you want in your results. Commonly

used values for e are 0.05 (5%) or 0.01 (1%). Lastly once the value for N and is presented,

the researcher will use the Slovin's Formula to calculate the required sample size (n).

48
Sources of Data

The study used both primary and secondary sources of data. These two sources

helped the researchers to assess the bookkeeping practices and their effect on the

financial management of rice retailers in Koronadal City. The primary data provided first-

hand evidence while the secondary sources provided second-hand information and

opinion from other research studies.

The primary data sources were collected through surveys or questionnaires to rice

retailers in Koronadal City to collect quantitative data about their bookkeeping practices,

financial management decisions, challenges, and perceptions, and in-depth interviews

will conduct qualitative interviews with selected rice retailers to gain deeper insights into

their experiences, motivations, and decision-making processes related to bookkeeping

and financial management.

The secondary data was gathered through financial records that obtain access to

financial records of rice retailers, if possible, to analyze actual financial data and trends

over a certain period. Business existing reports or documents related to the financial

performance and management practices of rice retailers from local business associations,

chambers of commerce, or government agencies. Published Research where to review

existing literature, research papers, and studies that explore similar topics in other

contexts or regions. These sources can provide insights and background information on

the relationship between bookkeeping and financial management.

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Instruments of the Study

The study utilized a survey questionnaire, that was administered and served as a

primary source of data that covered the following: (1) The demographic profile which

seeks to determine the type of business, number of years in operation, and types of

customers. (2) The bookkeeping practices employed include items pertaining to the

business’ recording, financial statement preparation, and monitoring of business finances.

(3) What are the prevailing bookkeeping practices among rice retailers in Koronadal City?

The researcher will create and distribute a well-structured survey to Koronadal

City's rice retailers. The questionnaires should have questions that ask about financial

management practices, bookkeeping procedures, and the perceived effect of

bookkeeping procedures on financial performance. The respondents' demographic profile

was determined by the researchers using a checklist. The level of bookkeeping practices

employed was evaluated using 5-point Likert scale questions and checklist questions to

gather quantitative data.

Examine the income statements, balance sheets, and cash flow statements from

the Koronadal City rice retailers' financial records if they are practice bookkeeping

practices by evaluating the financial performance of the retailers and investigate potential

correlations with their bookkeeping procedures by looking at financial ratios like

profitability ratios (for example, gross profit margin, net profit margin), liquidity ratios (for

example, current ratio, quick ratio), and efficiency ratios (for example, inventory turnover

ratio, asset turnover ratio).

We may gather in-depth information on bookkeeping procedures, financial

management strategies, and the perceived effect of bookkeeping on the financial

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performance of rice retailers in Koronadal City by combining these tools. Utilizing several

tools will allow for data triangulation, which will improve the validity and dependability of

the study.

Data Gathering Procedure

A systematic process is used to collect data to ensure exact and reliable data

collection. To gather data the researcher will follow these data-gathering procedures.

First, the respondents must be rice retailers in Koronadal city. The researcher must

have the research design and the planning. Researchers must define and determine the

objectives of the study. Also, choose the appropriate research methodology to develop a

data collection plan outlining the methods, tools, and resources needed. The researchers

must choose the rice retailers in Koronadal City. In order to perform the survey, the

researcher must use the questionnaire to be answered by the respondents which will be

calculated by the Slovin formula.

Second, Data collection method and data collection process. Since, the

researchers used the qualitative and quantitative approach they will administer the

questionnaire to the selected rice retailers through the questionnaire that would be given

to the respondents which includes questions related to bookkeeping practices, financial

management, and any relevant demographic information that will identify and rectify any

issues. Also, can use an open-ended question to facilitate the discussions in order to

record and transcribe the questions for analysis. Thus, the researchers must explain the

purpose of the study and administer the surveys to ensure that the respondents

understand the questions.

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 Third, data analysis and interpretation of results. The researchers must clean,

organize, and transcribe the collected survey data and use appropriate statistical

techniques and thematic analysis to analyze the data and identify recurring patterns

related to bookkeeping practices and financial management. Next, the researchers

should interpret the findings from the data analysis in the context of the research

questions and discuss the implications of the results of their significance for rice retailers

in Koronadal City.

Lastly, the conclusion and recommendation and report writing. The researchers

must summarize the key findings of the study and provide recommendations for rice

retailers based on the research outcomes. Also, must compile the research findings

analysis and interpretations into a coherent and well-structured report and include an

executive summary, introduction, methodology, results, discussion, conclusion, and

recommendations.

Following these steps will help the researcher gather thorough and trustworthy

information on financial management, bookkeeping processes, and their impacts on the

financial performance of Koronadal City's rice retailers.

Statistical Treatment

To summarize and describe the gathered information, the researcher will use

descriptive statistics to measure the mean, median, mode, standard deviation, range, and

percentages are included in this. Descriptive statistics can provide a clear overview of the

bookkeeping practices, financial management approaches, and financial performance of

the rice retailers in Koronadal City.

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 The study used the narrative and percentage interpretation in collecting data using

a survey checklist questionnaire and gathering financial records if they are practicing

bookkeeping. The data obtained from the questionnaire were interpreted and analyzed

using tables to determine the degree of agreement of the respondents of the study and

to get the sequence and percentage with the formula:

𝑓
Percentage =𝑁 x 100%

Where:

f = Frequency

N = population

Mean = [(number of people who selected response 1)*(weighting of response 1) +

(number of people who selected response 2)*(weighting of response 2)… (number of

people who selected response n)*(weighting of response n)] / (total number

of respondents)

In descriptive statistics, the researcher will calculate the standard deviation, range,

and measures of central tendency (mean, median) for quantitative variables relating to

bookkeeping procedures and financial management. To give a general summary of the

data distribution and features, use descriptive statistics.

Apply thematic analysis to qualitative interview data to find recurrent themes,

patterns, and insights about bookkeeping procedures and financial management.

Data analysis

In interpreting and drawing conclusions from the collected data, the researcher will

organize and clean the collected data to ensure accuracy and consistency. Address the

missing data, outliers, and any inconsistencies in the dataset. In Descriptive statistics

53
(mean, median, standard deviation, etc.) should be calculated for quantitative data

connected to bookkeeping procedures and financial management. Use percentages and

frequency distributions to summarize category variables.

Apply thematic analysis to qualitative interview data analysis. To determine the

recurrent themes, trends, and insights regarding how bookkeeping procedures impact

financial administration among rice retailers.

THEMATIC ANALYSIS

Mean Response
Scale Score Anchor Verbal Interpretation
5 4.21 – 5.00 Always Excellent Bookkeeping Practice
4 3.41 – 4.20 Often Good Bookkeeping Practice
3 2.61 – 3.40 Sometimes Average Bookkeeping Practice
2 1.81 – 2.60 Rarely Weak Bookkeeping Practice
Non-existence of Bookkeeping
1 1.00 – 1.80 Never Practice

Create graphs, charts, and visualizations to illustrate key findings. In a narrative

format, present qualitative observations, highlighting statements and incidents that

emphasize the influence of bookkeeping procedures on financial management.

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 BOOKKEEPING PRACTICES AND ITS EFFECT ON THE FINANCIAL
MANAGEMENT OF RICE RETAILERS IN KORONADAL CITY
GENERAL INSTRUCTIONS: .
• Check (/) the box which corresponds to your answer and kindly provide your
answers in the spaces provided. Please answer all the questions to the best of
your knowledge Your responses will be kept confidential and will never be linked
to you personally. Your participation is entirely voluntary. If there are items you do
not feel comfortable answering, please skip them. Thank you for your cooperation.
• .For the Likert Scale, use the scale provided in rating, 5 to 1.

Part I: RESPONDENT’S DEMOGRAPHIC PROFILE

Name of the Respondent (Optional):
Name of the Business:

1. What type of business do you operate?

Sole
Partnership
Cooperative
Corporation

2. How long is the business in operation?

Less than a year
1-5 years
More than 5 years but less than 6 years
More than 10 years

3. What is the nature of your business as a rice retailer?

Individual consumer retail
Restaurant or food service provider supplier
Small and medium enterprise supplier
Institutional buyer-supplier
Wholesaler or distributor

Part II: BOOKKEEPING PRACTICES EMPLOYED IN THE RICE RETAILERS

Rate the following statements pertaining to the bookkeeping practices employed by rice
retailers. Use the scale below as a guide in measuring the bookkeeping employed by rice
retailers.

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RATING SCALE
Range 5 4 3 2 1

Always Often Sometimes Rarely Never

Description (A) (O) (S) (R) (N)

A. RECORDING

Statements pertaining to Recording 5 4 3 2 1

1 I use journals or accounting books to record transactions

2 I record all the sales of my business

3 I record all the purchases & expenses of my business

4 I record all the receivables of my business

5 I record all the payables of my business

B. FINANCIAL STATEMENT PREPARATION

Statements pertaining to Financial Statement Preparation 5 4 3 2 1

1 The business hires someone to prepare the financial
statements
2 The financial statements (Income Statement, Balance
Sheet, Cash Flow) are prepared regularly
3 The financial statements are prepared and used in
decision making
4 The financial statements are used to analyze trends in
business operations
5 The product of the financial statements is fully utilized
for the development of the business

C. MONITORING OF BUSINESS FINANCES

Statements pertaining to Monitoring of Business Finances 5 4 3 2 1

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1 I keep my personal and business fund separate
2 Additional funds needed for the business are easily
identified
3 I monitor my payables regularly
4 I monitor my receivables regularly
5 I regularly monitor the cash flow (income and expenses)
and account balances (receivable and payable) of my
business

PART III: FINANCIAL MANAGEMENT PRACTICES EMPLOYED IN KORONADAL

CITY

1. How do Rice Retailers monitor their financial performance?

a. Do you regularly review and analyze your financial statements (e.g., income
statement, balance sheet)?
 Yes
 No
b. How often do you review your financial statements?
 Daily
 Weekly
 Monthly
 Quarterly
 Annually
PART IV: PREVAILING BOOKKEEPING PRACTICES AMONG RICE RETAILERS IN
KORONADAL CITY
1. Does your business practice bookkeeping?
Yes
No

2. What type of bookkeeping system do you currently use in your rice retail business?
Manual paper-based system/records (e.g., ledger, cash book)
Spreadsheet software (e.g., Excel)
Accounting software (e.g., QuickBooks, Xero)
Point of Sale (POS) system with built-in bookkeeping features
Other (please specify):

3. How do you manage your day-to-day cash flow as a rice retailer?

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 Keep cash on hand for daily expenses and transactions
Maintain a bank account for business transactions
Use digital payment methods (e.g., mobile wallets, online transfers)
Other (please specify):

4. Which financial transactions do you record in your bookkeeping system? (Select

all that apply)
Sales revenue
Purchases and inventory
Expenses (e.g., rent, utilities, salaries)
Cash inflows and outflows
Loans and debts
Other (please specify):

5. How do you track and reconcile your inventory levels with sales records?
Manual counting and recording
Barcode scanning system
RFID (Radio Frequency Identification) system
POS system with inventory management features
Other (please specify):

6. How do you handle cash transactions and maintain cash records?

Cash register with daily reconciliation
Petty cash system
Cash deposit slips and receipts
Digital payment system (e.g., mobile wallets)
Other (please specify):

7. Do you seek professional assistance (e.g., accountant, bookkeeper) in managing

your bookkeeping and financial records?
Yes, regularly
Occasionally, when needed
No, I manage it myself

PART V: EFFECT OF BOOKKEEPING PRACTICES ON THE FINANCIAL

MANAGEMENT OF RICE RETAILERS
1. Please rate the level of importance you place on bookkeeping practices in your
rice retail business on a scale of 1 to 5, with 1 being not important and 5 being
extremely important.

 1
 2
 3
58
  4
 5

2. How frequently do you record and update your financial transactions in your
bookkeeping system?
 Daily
 Weekly
 Monthly
 Quarterly Annually
 Irregularly

3. On a scale of 1 to 5, how accurate and detailed are your bookkeeping records,

with 1 being not accurate and detailed and 5 being highly accurate and detailed?
 1
 2
 3
 4
 5
4. Do you use any accounting software or tools to manage your bookkeeping
practices?
 Yes
 No

5. Please rate the level of importance you place on financial management in your
rice retail business on a scale of 1 to 5, with 1 being not important and 5 being
extremely important.
 1
 2
 3
 4
 5

6. How frequently do you review and analyze your financial statements (e.g.,
income statement, balance sheet)?
 Daily
 Weekly
 Monthly
 Quarterly
 Annually

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  Irregularly

7. On a scale of 1 to 5, how effectively do you use financial data to make informed

business decisions, with 1 being not effective and 5 being highly effective?
 1
 2
 3
 4
 5

8. In your opinion, how do you perceive the relationship between your bookkeeping
practices and the financial management of your rice retail business?
 Strongly negative
 Negative
 Neutral
 Positive
 Strongly positive

9. Are there any specific challenges or benefits you have experienced in your rice
retail business related to bookkeeping practices and financial management?
Please provide details.

10. Optional: If you would like to provide your contact information, please include it
here. This will allow us to reach out to you for any follow-up questions or to share
the research findings.

Thank you for participating in this questionnaire! Your responses will contribute to
understanding the correlation between bookkeeping practices and financial
management in rice retail businesses. God bless and stay safe.
Sincerely,
The Researchers

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