DETERMINANTS OF FINANCIAL PERFORMANCE EVALUATION IN SMALL AND MEDIUM ENTERPRISES

DOI:

https://doi.org/10.29303/akurasi.v7i2.612

Authors

  • Amir Hamzah Universitas Kuningan
  • Teti Rahmawati Universitas Kuningan
  • Chintia Fitriani Universitas Kuningan
  • Yudi Febriansyah Universitas Kuningan

Keywords:

SMEs, financial performance, contextual factor of SMEs

Abstract

This study analyzes factors influencing the financial performance of small and medium enterprises (SMEs), addressing the limited research that focuses on specific variables in the SME context. It examines the effects of mental accounting, financial record-keeping, financial literacy, financial management, and digital accounting on SME financial performance. Using Structural Equation Modeling (SEM), data from 216 SMEs in Kuningan Regency were analyzed. The findings reveal that financial record-keeping, financial literacy, and financial management significantly and positively impact SME financial performance. Conversely, In contrast, mental accounting has a significant negative impact, while digital accounting does not significantly affect financial performance. These results suggest that effective financial management practices can enhance financial performance, while improper use of mental accounting and ineffective implementation of digital accounting may hinder it. This research implies the need to improve financial literacy, adopt more effective financial management practices, and provide digital accounting training to help SMEs overcome financial challenges.

Downloads

Download data is not yet available.

References

Abdullahi, M. A., Mohamed, Z., Nasir Shamsudin, M., Sharifuddin, J., & Ali, F. (2021). Organizational support and sustainable entrepreneurship performance of SMEs, the Moderating role of strategic sustainability orientation. Sustainable Development, 12(1), 27–39. https://doi.org/10.5772/intechopen.93803

Adae, E. K., Kosiba, J. P. B., Hinson, R. E., Twum, K. K., Natahniel, N., & Nutsugah, F.F. (2021). Responsible Management in Emerging Markets: A Multisectoral Focus. 9(2),13. https://doi.org/10.1007/978-3-030-76563-7

Adela, V., Agyei, S. K., Frimpong, S., Awisome, D. B., Bossman, A., Abosompim, R. O., Benchie, J. K. O., & Ahmed, A. M. A. (2024). Bookkeeping practices and SME performance: The intervening role of owners’ accounting skills. Heliyon, 10(1), e23911. https://doi.org/10.1016/j.heliyon.2023.e23911

Akbaş, M. Ç., & Seedsman, T. (2024). Financial literacy as part of empowerment education for later life: A spectrum of perspectives, challenges and implications for individuals, educators. Economics, 22(2), 16–27. https://doi.org/10.1515/econ-2022-0097

Al-Mamary, Y. H., Alwaheeb, M. A., Alshammari, N.G.M., Abdulrab, M., & Balhareth, H., & Soltane, H.B. (2020). The effect of entrepreneurial orientation on financial and non-financial performance in Saudi SMEs. Journal of Critical Review, 21(2), 1–10. https://doi.org/10.31838/jcr.07.14.35

Alfianto, A. N., & Nugroho, A. P. (2020). The impact of Islamic finance knowledge and religiosity on gold investment behavior: an extended of the theory of planned behavior. Conference of Business, Accounting, 8(1), 1–16. https://doi.org/10.4108/eai.5-8-2020.2301010

Alsedrah, I. (2023). Digitalization and small & medium enterprise performance: A research to improve business practices. Business Review of Digital Revolution, 3(1), 18–32. https://doi.org/10.62019/BRDR.03.01.03

Apriyanti, H. W., & Budiman, J. (2023). The importance of digital accounting and Indonesian government incentives in strengthening MSMEs’ performance during the COVID-19 pandemic. Jurnal Dinamika Akuntansi, 15(02), 1–15. https://doi.org/10.15294/jda.v15i2.40373

Asikhia, O., & Naidoo, V. (2020). Assessment of the moderating effects of the Nigerian market environment on the relationship between management success determinants and SMEs’ performance. Problems & Perspectives in Management. https://doi.org/10.21511/ppm.18(4).2020.31

Bingley, S., & Burgess, S. (2024). Al in Small Businesses: Current and Potential Applications. Cutting-Edge Technologies for Business, 3(1), 28. https://doi.org/10.4018/979-8-3693-9586-8.ch002

Carton, F. L., McCarthy, J., & Xiong, H. (2022). Digital factors supporting decision-making in the financial well-being of social housing residents. Journal of Decision Systems, 4(2), 20. https://doi.org/10.1080/12460125.2022.2073638

Dwi Martika, L., Hamzah, A., & Puspasari, O. R. (2024). The dynamics of financial literacy and accounting literacy in coastal communities. Jurnal Akuntansi, 28(02), 300–318. http://dx.doi.org/10.24912/ja.v28i2.1856

Eniola, A. A., & Iwu, C. G. (2022). Examining the cognitive and psychological factors affecting the financial behaviour of female entrepreneurs. Journal of Contemporary Management, 3(2), 18. https://doi.org/10.35683/jcm22033.198

Espinosa-Méndez, C., & Correa, A. I. (2022). Gender and financial performance in SMEs in emerging economies. Gender in Management, 5(1), 20. https://doi.org/10.1108/GM-03-2020-0071

Gerrans, P., Baur, D. G., & Lavagna-Slater, S. (2022). Fintech and responsibility: Buy-now-pay-later arrangements. Australian Journal of Management, 3(2), 17. https://doi.org/10.1177/03128962211032448

Hamzah, A. (2019). Literasi keuangan dan inklusi keuangan syariah di kalangan tenaga pendidik Kabupaten Kuningan. Jurnal Akuntansi Dan Keuangan Islam, 7(2), 175–188. https://doi.org/https://doi.org/10.35836/jakis.v7i2.76

Hamzah, A., & Nopiyanti, H. (2024). How do asymmetric information and financial factors influence earnings management? Jurnal Ilmu Keuangan Dan Perbankan (JIKA), 13(2), 273–286. https://doi.org/10.34010/jika.v13i2.12554

Hamzah, A., & Suhardi, D. (2019). Tingkat literasi keuangan dan finansial technology pada pelaku usaha. Jurnal Ilmiah Manajemen Fakultas Ekonomi, 5(Desember), 97–108. https://doi.org/10.34203/jimfe.v5i2.1485

Hamzah, A., & Suhendar, D. (2020). Financial inclusion model on the development of Batik SMEs In Cirebon Regency. Jurnal Minds : Manajemen Ide Dan Inspirasi, 7(2), 95–104. https://doi.org/10.24252/minds.v7i2.16512

Hamzah, A., Suhendar, D., & Arifin, A. Z. (2023b). Factors affecting cloud accounting adoption in SMEs. Jurnal Akuntansi, 27(3), 442–464. https://doi.org/10.24912/ja.v27i3.1520

Hasibuan, A. N., & Hardana, A. (2024). Factors that influence people’s interest in using Sharia banking products. Jurnal Ilmu Perbankan Dan Keuangan Syariah, 6(1), 14. https://doi.org/https://doi.org/10.24239/jipsya.v6i1.242.53-70

Huang, Z., Savita, K. S., & Zhong-jie, J. (2022). The business intelligence impact on the financial performance of start-ups. Information Processing &Management. https://www.sciencedirect.com/science/article/pii/S0306457321002429

Jiang, W., Zhang, H., Nakonieczny, J., & Jamaani, F. (2024). Social capital, financial intelligence, and entrepreneurial financial performance: evidence from the post-pandemic challenges. Venture Capital, 26(4), 467–495. https://doi.org/10.1080/13691066.2023.2238901

Kaili, E., Psarrakis, D., & van Hoinaru, R. (2019). New Models of Financing and Financial Reporting for European SMEs: A Practitioner’s View. books.google.com. https://doi.org/10.1007/978-3-030-02831-2

Kim, H. H., Maurer, R., & Mitchell, O. S. (2021). How financial literacy shapes the demand for financial advice at older ages. Journal of the Economics of Ageing, 20, 100329. https://doi.org/10.1016/j.jeoa.2021.100329

Kiptum, A. K. (2019). Effect of financial skills on loan repayment: A case of micro and small enterprises in Elgeyo Marakwet County, Kenya. Ir-library.egerton.ac.ke. http://ir-library.egerton.ac.ke/handle/123456789/1923

Lai, S. F., Lim, W. L., Foo, M. Y., & Choo, S. M. (2023). Embedding Virtual Reality in HRM Practices to Enhance. In Accounting, and Finance. 2(1),37.https://doi.org/10.2991/978-94-6463-342-9_9

Mutanga, M., Ncube, N., Mbuyisa, E. N., & Magodhini, P. (2021). The influence of mental accounting, perceived trust and power of revenue authorities on tax compliance among SMEs in Zimbabwe. Journal of Accounting and Taxation, 13(2), 89–98. https://doi.org/10.5897/JAT2019.0352

Ng’ora, S., Mwakalobo, A. B. S., & Lwesya, F. (2022). Managerial skills for micro, small, and medium-sized enterprises (MSMEs). Management Dynamics in the Knowledge Economy, 10(4), 343-359. https://doi.org/10.2478/mdke-2022-0022

Orobia, L. A., Nakibuuka, J., Bananuka, J., & Akisimire, R. (2020). Inventory management, managerial competence, and financial performance of small businesses. Journal of Accounting, 3(1),28, https://doi.org/10.1108/JAEE-07-2019-0147

Shi, W., Ali, M., & Leong, C. M. (2024). Dynamics of personal financial management: a bibliometric and systematic review on financial literacy, financial capability, and financial behavior. International Journal of Bank Marketing.3(1),16. https://doi.org/10.1108/IJBM-06-2023-0359

Užík, M., Warias, R., & Glova, J. (2022). Management of transfer prices in professional football as a function of fan numbers. Mathematics, 10(16), 1–13. https://doi.org/10.3390/math10162982

Vyas, V., & Jain, P. (2020). Prioritization of financial performance determinants in Indian SMEs. Journal of Indian Business Research, 2, 169-190. https://doi.org/10.1108/JIBR-03-2018-0088

Wiharno, H., Hamzah, A., Rahmawati, T., & Supriatna, O. (2022). Peningkatan kapasitas ibu PKK Nurul Huda Kelurahan Awirarangan melalui pelatihan literasi keuangan. Journal of Entrepreneurship and Community Innovations. 1(1),28-34. https://doi.org/10.33476/jeci.v1i1.21.

Downloads

Published

2024-12-26

How to Cite

Hamzah, A., Rahmawati, T., Fitriani, C., & Febriansyah, Y. (2024). DETERMINANTS OF FINANCIAL PERFORMANCE EVALUATION IN SMALL AND MEDIUM ENTERPRISES. Akurasi : Jurnal Studi Akuntansi Dan Keuangan, 7(2), 463–486. https://doi.org/10.29303/akurasi.v7i2.612