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While recognizing the potential roles of Small and Medium Enterprises,

the ability of it in playing these roles depends largely on how they perform in the

business. There are numbers of factors influencing the performances of Small

and Medium Enterprises including legal and regulatory framework, infrastructure

and business development services, limited access of Small and Medium

Enterprises to finance, effective and poorly coordinated institutional support

framework, record keeping etc. However, the focal point of this paper is

concerned with Small and Medium Enterprises record keeping strategies. It is

important therefore to recognize the strong influence of record keeping attached

to Small and Medium Enterprises performances and development, the

importance of record keeping cannot be reduced in any means. In principle,

record keeping is the process of recording transactions and events in an

accounting system. Since the principles of accounting rely on accurate and

thorough records, record keeping is the foundation of accounting.

Proper record keeping is important on sustaining and expanding a

business. Without it, one runs the risk of hitting cash flow crunches, wasting

money, and missing out on opportunities to expand.

Background of the Study

Lipa, officially the City of Lipa (Filipino: Lungsod ng Lipa), is a first class

component city in the province of Batangas. It is one of the three cities in

Batangas (the others are Batangas City and Tanauan). It is located 78 kilometres
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(48 mi) south of Manila and has a population of 332,386 people according to the

2015 census.

Furthermore, Lipa City has many Small and Medium Enterprises (SMEs)

stratified into agri-business, manufacturing, retailing, service, wholesaling, and

other nature of business. The citys agricultural products such as poultry, meat

and dairy, are supplied to neighbouring towns and provinces. Three malls which

include SM City Lipa, Robinsons Place Lipa and Fiesta World Mall provide vigour

to the economic activities in the city aside from the public market. Famous food

chains line the city proper as well as in the expansion area of the urban core. The

city has attracted 61 domestic and foreign bank offices which makes it a suitable

financial hub not only of the province.

Behind the successful enterprises in Lipa City are the problems

encountered by them especially the small and medium enterprises in terms of

record keeping. Based on the interview conducted by the present researchers,

the problems encountered by the small and medium enterprises in Lipa City are

lack of knowledge in proper record keeping, cost of record keeping, being time

consuming of record keeping and the level of awareness towards the importance

of proper record keeping. Good records will help to monitor the progress of the

business, prepare financial statements, identify sources of income, keep track of

deductible expenses, keep track of basis in property, prepare tax returns and

support items reported on tax returns.

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Researchers choose the topic Assessment of Business Record Keeping

Strategies of Small and Medium Enterprises in Lipa City to find out the record

keeping strategies utilized by small to medium enterprises. Lipa City was chosen

because there are many small and medium enterprises on the said city as their

subject on their study. Furthermore, most businesses are interested in measuring

their profitability and to determine the profit, they should adopt appropriate

accounting bases, concepts, principles and standards to ensure the reliability of

its measurement.

In view of the importance of Small and Medium Enterprises to the

development of Lipa City, the researchers have designed this study to assess the

business record keeping practices of Small and Medium Enterprises in Lipa City.

Possible leanings that the present researchers may get are the importance of

proper record keeping in a business, the record keeping strategies that small and

medium enterprises utilized in Lipa City which help them to grow, the

consequences of poor record keeping which must be avoided and the big

contribution of small and medium enterprises to the economy of our country.

Statement of the Problem

This study determines the record keeping strategies by Small and Medium

Enterprises (SMEs) in Lipa City.

Specifically, this study aimed to answer the following questions:

1. What is the profile of the business in terms of:

1.1 Nature of Business;
1.2 Form of Business;
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1.3 Capitalization;
1.4 Years in operation; and
1.5 Number of employees?
2. How may the record keeping strategies of Small and Medium

Enterprises be assessed in terms of:

2.1 Policy Strategy;
2.2 Design Strategy;
2.3 Standard Strategy; and
2.4 Implementation Strategy?

3. Is there any significant difference on the respondents assessment

when grouped according to profile variables?

4. What Information, Education and Communication material maybe

produced on record keeping strategies for SMEs?

Theoretical Framework

Record keeping is the process of recording transactions and events in an

accounting system. It is the maintenance of a history of ones activities, as

financial dealings by entering data in ledgers or journals, putting documents in

files. Since the principles of accounting rely on accurate and thorough records,

record keeping is the foundation of accounting.

Fundamental work of record keeping is that good records will help one

monitors the progress of your business, prepares ones financial statements,

identifies sources of income, keeps track of deductible expenses, keeps track of

the basis in property, prepare tax returns, and supports items reported on tax

returns.
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Figure 1.1
Record Keeping Strategies Model

According to National Archives of Australia (2015), DIRKS methodology is

a structured process for designing and implementing recordkeeping systems. It is

an eight-step process in which all aspects, or as many as possible, of a business

are studied in order to achieve complete records management practice. It is

based on traditional system design methodologies, but has been adapted to

meet recordkeeping objectives. Developing and Implementing a Record Keeping

System (DIRKS) provides a structure for many of the traditional operations the

organization has always conducted.

The researchers focused on Step E of DIRKS methodology in order to

identify the record keeping strategies utilized by the Small and Medium
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Enterprises. The Step E identifies strategies for satisfying recordkeeping

requirements, which may include adopting policies, procedures and practices,

designing new systems, implementing systems in a way which satisfies a

recordkeeping requirement, or adopting standards. The policy strategy involves

using policy or other forms of organizational rules as a means to meet

recordkeeping requirements. The design strategy enables to design or redevelop

recordkeeping systems in ways that makes the organization automatically meet

its recordkeeping requirements. The standards strategy concerns the use of

technical standards as means of ensuring that recordkeeping requirements are

met. The implementation strategy involves considering the way of

implementation on record keeping systems in the organization.

Conceptual Framework

The purpose of this study is to assess the business record keeping

strategies of the SMEs in Lipa City as perceived by the owners of the

businesses. To further elaborate the problem, the researchers have come up with

a conceptual framework.
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Input Process Output

Profile of the Business

Nature of business Survey
Form of business Questionnaires Information,
Capitalization Education and
Unstructured
Years in the operation Communication
Interview
Number of employees material on
Data analysis record keeping
Record Keeping Strategies
using statistical strategies for
Policy Strategy techniques Small and
Design Strategy Medium
Standard Strategy Interpretation of Enterprises
Implementation Data
Strategy

Figure1.2
Input-Process-Output Model

The Input-Process-Output, also known as IPO model, is a fundamental

model and conceptual schema of a general system. Figure 1.2 shows that the

program input consists of the profile of the business in terms of nature of

business, form of business, capitalization, years in the operation and number of

employees and the record keeping strategies in terms of policy strategy, design

strategy, standard strategy and implementation strategy. Through the process of

distribution of survey questionnaires, unstructured interviewing and data analysis

using statistical treatment, the needed information for the assessment of

business record keeping of selected Small and Medium Enterprises are

answered. The researchers also produced an Information, Education and

Communication material on record keeping strategies for Small and Medium

Enterprises, particularly a module, which serves as an output of their study.

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Research Hypothesis

This research study is pursued with the desire of testing that:

Ho: There is no significant difference in the assessment of business record

keeping strategies of selected Small and Medium Enterprises when grouped

according to its business profile.

Scope and Limitations of the Study

The researchers started this study on the second semester of 2016. It

deals on the assessment of business record keeping strategies of selected Small

Medium Enterprises in Lipa City.

This study is limited to Lipa City alone since it deals primarily on the

business record keeping strategies of selected Small Medium Enterprises in the

area. Lipa has many business establishments and are growing in terms of Small

and Medium Enterprises (SMEs) which will help the researchers in their present

study.

The researchers narrow the study to 190 respondents, the business

owners or book keepers of Small and Medium Enterprises. It is intended to such

since they are the ones responsible to maintain financial records for their

company or organization. The creation of financial transactions which includes

posting information to accounting journals or accounting software from source

documents as invoices to customers, cash receipts, and supplier invoices

depends on them.
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Simple random sampling was used to distribute the questionnaires among

the respondents. The researchers determine the profile of the business in terms

of nature of business, form of business, capitalization, years in the operation and

number of employees. It was also determine the different record keeping

strategies in terms of policy strategy, design strategy, standard strategy and

implementation strategy.

The researchers are limited in extent investigation and information in

terms of interviews, research works and survey questionnaires assessing the

perception of the respondents. The questionnaires for the respondents are also

limited to the questions pertaining to the assessment process. In order to assure

manageability of the collected data, the questionnaire did not include open-ended

response items.

Significance of the Study

This study provided information regarding the business record keeping

strategies of small and medium enterprises in Lipa City. The study is believed to

be significant and beneficial to the following:

To the small and medium enterprises, this study will help them to know the

importance of a good business record keeping for the development, innovation

and progress of their foundation as enterprises.

To the businessmen, it will help them to develop their enterprises into a

competitive one. This can also be their guide to a continuous capability in record

keeping.
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To the municipality of Lipa City, this will enhance the operations, strategies

and techniques perform by the business located in this area.

To the Batangas State University, they may also benefit from the results of

this study as it will serve as a reference material for students, researchers and

faculty alike in relying information that will provide deeper knowledge about the

record keeping strategies of the businesses.

To Accounting students, this study would provide as additional information

for further researches being conducted by students of this college. Thus, it would

increase their awareness in business record keeping strategies of small and

medium enterprises.

To the present researchers, this study serves as their guide in studying

and understanding the business record keeping strategies as well as how it must

be assessed. This study also helps them to have a broader knowledge of some

related areas of concern.

To the future researchers, this study is expected to provide insights that

will help in their sources of information about the assessment of business record

keeping strategies of small and medium enterprises. This study will be able to

provide lots of information that will be helpful in their research.

Definition of Terms

The following terms are defined both conceptually and operationally

definition to help the researchers.

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Assessment. It is the process of documenting, usually measurable terms,

knowledge, skills, attitudes and beliefs (Agoncillo, 2006). In this study, it refers to

the evaluation of the business record keeping practices of selected Small and

Medium Enterprises.

Business Operation. These are internal factors that lie within the scope

and operations of a firm and hence within the control of management (Venugopal

2006). In this study, business operations are needed to be recorded to keep

track on the profitability of the business.

Design Strategy. This is to design or redevelop recordkeeping systems in

ways that enable the organization to automatically meet its recordkeeping

requirements (Macintosh, 2015). In this study, it is a record keeping strategy that

designs systems for record keeping.

Finance. This is the art and science of managing money (Gitman, 2010).

In this study, it is one of the factors influencing the performance of Small and

Medium Enterprises in general.

Implementation Strategy. It involves considering the way in which a

business implement recordkeeping systems in their organization (Macintosh,

2015). In this study, it is a record keeping strategy that implements systems for

record keeping.

Journal. It is a business diary in which all financial data pertaining to the

day to day business transactions of a firm is recorded using double-entry

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bookkeeping system (Ballada, 2013). In this study, it can be one of the records

that can be kept by the record keeper.

Policy Strategy. It involves using policy or other forms of organizational

rules as a means to meet recordkeeping requirements (Macintosh, 2015). In this

study, it is a record keeping strategy that provides system policies for record

keeping.

Record keeping. It is a mechanical task involving the collection of basic

financial data (Ballada, 2013). In this study, it refers to an important activity of a

business to know whether it is earning profit or operating in loss.

Small and medium enterprises.These are any businesses

activities/enterprises engaged in industry, agri-businesses/services, whether

single proprietorship, cooperative, partnership, or corporation whose total assets,

inclusive of those arising from loans but exclusive of the land on which the

particular business entitys office, plant and equipment are situated, must have

value falling under the following categories: By asset size: Small P3,000,001

P15,000,000 and Medium P15,000,001 P100,000,001; By number of

employees: Small 10-99 employees and Medium 100-199 employees (DTI,

2015)

In this study, they served as the respondents of the study engaged in

different industries, with an asset size of P3,000,001 P15,000,000 for the small

enterprises and P15,000,0001 P100,000,000 for the medium enterprises.

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Standards Strategy. This strategy concerns the use of technical

standards as means of ensuring that recordkeeping requirements are met

(Macintosh, 2015). In this study, it is a record keeping strategy that uses

standards for proper record keeping.

Transaction. This is a business deal: an occurrence in which goods,

services, or money is passed from one person, account, etc., to another

(Merriam-Webster's Learner's Dictionary, 2016). In this study, transaction should

regularly record to keep an eye on activities that may affect the business.