The measurement of performance by small Maltese firms

Abstract

Research was conducted through personal interviews with twenty entrepreneurs of small Maltese firms. The most widely used financial indicators by small Maltese firms are cash flow, profitability and sales. Both financial and non-financial measures are used to monitor performance. It is evident that continuous performance measurement is essential for the small business to prosper. Financial measures alone do not provide all the information needed to make sound decisions and non-financial indicators are a way to broaden reporting parameters. Interviewees stated that performance measures employed by large firms are often inappropriate for small companies. Small companies do not use techniques such as Benchmarking and Balanced Scorecards. The accountant should increase the awareness of the benefits that can be reaped from such performance measurement tools.