Causes for Successful Businesses to Fail A Case of Management Accounting Practice in Small and Medium Enterprisesin Kinondoni and Ilala Municipality Dar es salaam.

Abstract

The study was carried out to assess the effects of Management Accounting Practices on SMEs. Specifically, the study achieved the following objectives; examined the extent use of management acounting practices by SMEs, determined the importance of management accounting practice in SMEs performance and assessed the effects of management accounting practice on the perfomance of SMEs. This study employed a case study design in the process. A sample size of 88 respondents was drawn, whereby 40 respondents were drawn from Kinondoni and 48 respondents from Ilala municipality. The study findings revealed that, Management accounting though have positive relation with the performance of SMEs but do not directly produce an improvement in firm without other external and internal factors for instance environment and behavioral factor etc, but it helps to support the firm to improve its management in an efficient and effective way. The study fruther revealed that firms differ in term of management and there has been continues changes in the way firms use MAPs for instance the study revealed that some of the firms considered monthly budgeting while others preferred continuously budgeting. Regardless that majority of firms responded to have been use most of MAP system such as budgeting, costing, performance evaluation as well as budget timing and technological consideration but still some of the firms their sales growth and profitability growth rate have been decrease significantly. Moreover, the study revealed that market intensity and or competition, technological and human resource capacity have been considered to be among the factors that support SMEs management which results into growth, also, the existance of both internal and external factors like technology advancement need also be incorporated when assessing the effects of Management Accounting Practices on SMEs. The study recommends that, the Tanzanian authorities will enhance the present business training program to the Tanzania entrepreneurs or younger graduates with the aid of subsidizing the training in the use of MAPs so that the SMEs. The training needs to convey greater consciousness to the use of MAPs especially to the use of extra cutting-edge MAPs.