Financial growth in relation to the application of accounting techniques in the typical Maltese manufacturing SME : an investigation

Abstract

All businesses set up with the main intention to succeed. They look forward to be sustainable money-wise and above all to be profitable. This change falls under the heading of "financial growth" of a business and is, in fact, the main subject of this dissertation. This study is aimed primarily at investigating the "whys" and "hows" of financial growth and success of the local manufacturing SMEs. More specifically, the investigation is focused on the extent to which Accounting Techniques are applied within the firms in questions and their relation to Financial Growth. Questionnaires were sent to a selection of manufacturing firms established in Malta and Gozo and from the responses collected it was evident that the majority of the firms under study have actually registered financial growth since they set up. The results also show that most firms have a good accounting system and an internal accounts department. A good percentage of firms even employed an accountant full time, or they themselves possess the necessary knowledge and qualifications in Accounting enabling them to carry out all the necessary accounting work. In addition, the firms implement several Accounting techniques. Research, confirmed that when such techniques were used at predetermined frequency, firms actually registered financial growth. Despite these facts, results led to the conclusion that although the firms grew financially while implementing an Accounting System and applying Accounting Techniques, the latter two are not necessarily the only factors causing such growth. Respondents claimed that there exist other factors, like customer focus, after sales service and advertising that help firms to grow and succeed.