Influence of Managerial Accounting Skills on SME’s on the Success and Growth of Small and Medium Enterprises in Kenya.

Abstract

Several studies show that most small and medium businesses fail within their first three years. Although the role of factors such as access to funds and culture has been widely studied, the influence of owner/manager practices and capabilities have generally been ignored. To bridge this gap, this paper investigates the managerial business practices and capabilities used by SMEs such as strategic management, financial, marketing, human resource and ICT and their influence on decision making for enterprise success and growth. Data was collected from Kenya Industrial, Research and Development Institute (KIRDI) incubated SMEs in Nairobi. A census research design was used, with a self administered questionnaire given to all participants. The results show that owner/manager capabilities in financial, marketing, human resource and managerial accounting influence decision-making, and consequently SMEs success and development. The paper concludes that training level and managerial accounting capabilities of owner/manager have a strong, positive and significant influence on the decision making and consequently are critical for the success, growth and survival of SMEs. Key words: Small and Medium Enterprises, owner/manager, managerial practices, managerial accounting, decision making