ARTICLE REVIEW

The Use and Implications of Management Accounting Practices in Small and Medium-Sized
Enterprises
Zaid Jaradat, Roshaiza Taha, Rosliza Mat Zin , Wan Zuriati Wan Zakaria, Rozainun Abdul Aziz

Article Citation (APA Format)

Introduction
In recent years, management accounting in small and medium-sized firms (SMEs) has fueled
growing interest in the field of quality management. Research articles, on the other hand, is
dispersed, spanning topics including accounting, small business and entrepreneurship, general
management, and production and operations management. The goal of this article is to
integrate existing knowledge on management accounting in SMEs and offer concrete
recommendations for how to progress. Similar to large organization, SMEs also face issues
related to business sustainability as a result of among others, globalization, size, technology
advancement, intensified market competition, change in management and constraints in
capital funding (Davilla, 2005, Davilla and Foster, 2007, Nandan, 2010, Tuan Mat, 2010, Ahmad,
2012, Sleihat et al., 2012, Fasesin et al., 2015, Messner, 2016). According to Senftlechner and
Hiebl (2015), for businesses to survive and remain sustainable, they need to take into account
financial information as well as non-financial information. For this particular reason,
Management Accounting (MA) can be regarded as value-added accounting knowledge for SMEs
in order to assist them in improving their managerial functions since MA incorporates and
emphasizes both financial and non-financial information. Thus, management accounting is
indeed important to support the business functions (Davilla, 2005, Lavia López and Hiebl, 2015).

Summary
The data demonstrate that SMEs use management accounting at a lower rate and in a different
way than larger companies. The review illustrates how environmental, staff, and organizational
factors greatly influence the organization of management accounting in SMEs and how
appropriate management accounting helps SME performance in general, based on a
comparison of SMEs.
Analysis
Management accounting usefulness in improving the efficiency of business entity management
has been well documented in the literature. The benefits of using it have long been recognized,
and the development of new management accounting solutions further adds to that. However,
management accounting has only been applied in large companies thus far. Numerous cases
based on experience gained in large business entities indicate the possibility of its practical
implementation, as well as the advantages and benefits of implementing it. The article
discusses the use of management accounting in small and medium-sized businesses. The
assumptions of management accounting will be explored in regard to the special needs of small
and medium-sized businesses. The experience of accounting's applicability in small and
medium-sized businesses will be examined. There will be an overview of the challenges that
managers in small and medium-sized businesses confront when it comes to the use of
management accounting tools.

Conclusion
It complies the findings of research into the use of management accounting in small and
medium businesses from a variety of research institutes and other accounting-related
organizations. It also relates to the challenge of assisting small and medium-sized business
managers in the use of management accounting technologies. Its goal is to find answers to the
question of whether accounting outsourcing in small and medium businesses allows
management accounting to become more popular. This article is also a reason to consider
doing more research, the result of which should be a greater understanding of management
accounting among small and medium-sized business owners and managers, as well as the
development of skills in the practical application of management accounting tools in small and
medium-sized businesses.

Reference
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