JMJ Marist Brothers

NOTRE DAME OF MARBEL UNIVERSITY

City of Koronadal, Province of South Cotabato

BOOKKEEPING PRACTICES THAT INFLUENCE THE

OVERALL MANAGEMENT OF BUSINESS
OF ONLINE SELLERS IN SOUTH COTABATO

An Undergraduate Thesis
Presented to
The Faculty of the College of Business Administration
Notre Dame of Marbel University
City of Koronadal, South Cotabato

In Partial Fulfillment of the Requirements in ACRES 112

(Management Accounting Research)

Presented by

Bagayas, Virna Leila A.

Cabaylo, Aivan Q.
Castro, Rhona Mae S.
Martinez, Fredelyn N.
Solis, Karen Kae M.

May 2022
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Abstract

The study evaluated the influence of the bookkeeping practices to the overall management of

business of the online sellers in South Cotabato. It identified the demographic profile, the

level of bookkeeping practices and management employed in the online business. Using

Cochran, a sample size of 385 was calculated however only 213 online sellers were utilized

and identified through purposive and snowball sampling technique. The study utilized

frequency, mean, Pearson-r, multiple regression, and hierarchical regression using Hayes

PROCESS as the statistical tools for data analysis. The researchers used a descriptive-

quantitative correlational design and the data were gathered using a self-developed survey

questionnaire that was converted to an e-questionnaire using google forms. Findings show

that most of the online sellers in South Cotabato are under the merchandising business that is

in operation for less than a year with clients from within and outside South Cotabato. Where,

the online sellers have an average level of bookkeeping practice and a good level of

management of the online business. There was also an established significant relationship

among the bookkeeping practices and overall management. Moreover, the multiple

regression analysis identified three bookkeeping practices – recording, financial statement

preparation, and monitoring of business finances that significantly influence the overall

management of business. In the moderation analysis, only the type of business and scope of

clients have a moderating effect on the relationship of the independent and dependent

variables. Where, the type of business has a moderating effect on the relationship of

recording and overall management, and scope of clients has a moderating effect on the

relationship of monitoring of business finances and overall management.

Keywords: bookkeeping practices, overall management, online sellers, online business

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Dedication

This paper is wholeheartedly dedicated to our beloved parents who kept supporting us

morally, providing our needs financially, being an emotional support to each of us, and serving

as our inspiration to move forward and work hard.

Also, we dedicate this paper to our professors, friends, and classmates, who have

graciously given their time and effort to share their knowledge and expertise and encouraged

us to finish the study.

To the Notre Dame of Marbel University and the College of Business Administration,

who have become our pillars of wisdom behind our years of academic and confidence building,

dedication, and passion for work.

And lastly, to the Almighty God who have always been protecting us away from

harmful disease, especially COVID-19. Thank you for giving us strength, power of mind,

knowledge, and everything we have. All of this, we do and offer for the glory of God.
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Acknowledgement

The researchers would like to express their deepest gratitude to the following persons

that have collectively given their utmost effort and time to make this study possible.

Foremost, the researchers would like to extend their sincere gratitude to their thesis

adviser, Mrs. Michelle F. Capistrano, CPA, MBA, for her time, guidance, and support in the

conduct of this study.

The researchers would also like to thank to the distinguished members of the panel

headed by Dr. Aileen J. Rioja, together with Dr. Wilma A. Mercado, Ms. Angel Queen M.

Samoraga, CPA and Dr. Jennifer S. Era for imparting their knowledge to the researchers

and sharing their insights to help improve this paper.

To the Online Sellers in South Cotabato, who had given their time to be part of the

pool of respondents of the study and in answering truthfully the set of questions. We wish for

the success of your business and life endeavors. Without your full support, the conduct of this

study will not be possible.

To their families, especially their parents, for the unending financial, emotional, and

moral support from the beginning until the end of this research journey.

And lastly, to the Almighty God who graciously showered the researchers with

wisdom, strength, and power of mind to persevere in finishing the study. All for the glory of

God.

The Researchers
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Table of Contents

Abstract .................................................................................................................................... 2
Dedication ................................................................................................................................ 3
Acknowledgement ................................................................................................................... 4
List of Tables ........................................................................................................................... 7
List of Figures.......................................................................................................................... 9
List of Appendices ................................................................................................................. 10
Introduction ........................................................................................................................... 14
Background of the Study ................................................................................................. 14
Review of Related Literature .......................................................................................... 17
Bookkeeping .................................................................................................................... 17
Methods of Bookkeeping................................................................................................. 20
Bookkeeping Practices .................................................................................................... 21
Online Business ............................................................................................................... 29
Business Management ..................................................................................................... 30
Types of Business ............................................................................................................ 36
Number of Years in Operation ........................................................................................ 38
Scope of Clients ............................................................................................................... 40
Relationship of Bookkeeping Practices and Overall Management ................................. 42
Synthesis of the Literature ............................................................................................... 45
Theoretical Framework ................................................................................................... 51
Administrative Theory ..................................................................................................... 51
Quantitative Theory of Management ............................................................................... 52
Conceptual Framework ................................................................................................... 53
Statement of the Problem ................................................................................................ 55
Hypothesis ......................................................................................................................... 56
Significance of the Study ................................................................................................. 56
Scope and Limitation ....................................................................................................... 58
Definition of Terms .......................................................................................................... 60
Method ................................................................................................................................... 61
Research Design ............................................................................................................... 61
Locale of the Study ........................................................................................................... 62
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Sources of Data ................................................................................................................. 63

Population and Sampling Technique ............................................................................. 64
Respondents ...................................................................................................................... 65
Research Instrument ........................................................................................................ 68
Data Gathering Procedures ............................................................................................. 70
Data Analysis .................................................................................................................... 72
Ethical Consideration ...................................................................................................... 75
Results .................................................................................................................................... 77
Demographic Profile ........................................................................................................ 77
Level of Bookkeeping Practices Employed in The Online Business ............................ 79
Level of Online Sellers’ Management of Business ........................................................ 84
The Relationship between the Independent Variables – Recording, Financial
Statement Preparation, Monitoring of Business Finances, and Filing of Taxes, and
the Dependent Variable – Overall Management ............................................................ 87
Bookkeeping Practices (Recording, Financial Statement Preparation, Monitoring
of Business Finances, and Filing of Taxes) that influence the Overall Management
of Business of Online Sellers............................................................................................ 92
Moderating Effect of the Demographic Profile (Type of Business, Number of Years
in Operation, and Scope of Clients) on the Relationship of Bookkeeping Practices
(Recording, Financial Statement Preparation, Monitoring of Business Finances,
and Filing of Taxes) and Overall Management of Business of Online Sellers ............ 96
Discussions ........................................................................................................................... 100
Interpretation of the Results ......................................................................................... 100
Conclusions ..................................................................................................................... 123
Recommendations .......................................................................................................... 125
Appendices .......................................................................................................................... 130
References ............................................................................................................................ 166
Curriculum Vitae ................................................................................................................ 184
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List of Tables

Table
1 Current Business Set-up of the Online Sellers 66
2 Business Location of the Online Sellers 66
3 Service or Products Offered by the Online Seller 67
4 Reliability Statistics for Pre-testing 69
5 Reliability Statistics for Post Hoc Test 70
6 Statistical Treatment 72
7 Data Interpretation of the Level of Bookkeeping Practices Employed 74
8 Data Interpretation of the Level of Online Sellers’ Management of 74
Business
9 Interpretation of Correlation Coefficient 75
10 Frequency Distribution of the Type of Business of the Online Sellers 77
11 Frequency Distribution of the Number of Years in Operation of the 77
Online Sellers
12 Frequency Distribution of the Scope of Clients of the Online Sellers 78
13 Descriptive Statistics of the Recording Practices of Online Sellers 79
14 Descriptive Statistics of the Financial Statement Preparation Practices of 80
Online Sellers
15 Descriptive Statistics of the Monitoring of Business Finances Practices 81
of Online Sellers
16 Descriptive Statistics of the Filing of Taxes Practice of Online Sellers 82
17 Descriptive Statistics of the Level of Bookkeeping Practices Employed 83
18 Descriptive Statistics of the Planning Management of Online Sellers 84
19 Descriptive Statistics of the Organizing Management of Online Sellers 85
20 Descriptive Statistics of the Controlling Management of Online Sellers 86
21 Descriptive Statistics of the Overall Level of Online Sellers’ 87
Management of Business
22 Correlations of the Variables 87
23 Tests of Normality 88
24 Collinearity Statistics 90
25 Model Summary 92
26 ANOVA 93
27 Coefficients 94
28 Comparison of Main Sample with Split Sample 96
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29 Moderating Effect of Type of Business and Number of Years in 97

Operation on Recording and Overall Management
30 Moderating Effect of Scope of Clients on Recording and Overall 97
Management
31 Moderating Effect of Type of Business and Number of Years in 98
Operation on Financial Statement Preparation and Overall Management
32 Moderating Effect of Type of Business and Number of Years in 99
Operation on Monitoring of Business Finances and Overall Management
33 Moderating Effect of Scope of Clients on Monitoring of Business 99
Finances and Overall Management
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List of Figures

Figure

1 Fayol’s Administrative Management Model 52

2 Conceptual Framework 53
3 Map of South Cotabato 63
4 Normal P-Plot of Regression Standardized Residual 89
5 Scatterplot Result of the Homoscedasticity Test 91
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List of Appendices

Appendix

A Letter to the Respondents 130

B Letter to the Respondents for Pilot Testing of Survey 131

Questionnaires
C Survey Questionnaire 132
D Reliability Statistics using Cronbach’s Alpha 138
E Pearson R Correlation 139
F Multiple Regression Analysis 140
G Split Validation 146
H Type of Business and Number of Years in Operation on the 148
Relationship of Recording and Overall Management
I Scope of Clients on the Relationship of Recording and Overall 151
Management
J Type of Business and Number of Years in Operation on the 153
Relationship of Financial Statement Preparation and Overall
Management
K Scope of Clients on the Relationship of Recording and Overall 156
Management
L Type of Business and Number of Years in Operation on the 157
Relationship of Monitoring of Business Finances and Overall
Management
M Scope of Clients on the Relationship of Monitoring of Business 160
Finances and Overall Management
N Raw Data Set of the 213 Respondents 162
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Introduction

This section presents the study's background, theoretical framework, conceptual

framework, statement of the problem, hypothesis, significance of the study, scope and

limitation, and the definition of terms. The study was focused on the influence of bookkeeping

practices to the overall management of online business.

Background of the Study

Record keeping is essential to the management of business necessary for a good

business performance (Ademola et al., 2012). Bookkeeping is the exact and logical collection

of company-related events with the objective of communicating financial situation and

business performance at any moment. It enables enterprises to have a reliable measure of the

performance and financial position. This enables the decision maker to make a strategic

decision and have a benchmark for its revenue and income goals.

A study carried out on the “Effect of bookkeeping on the growth of Small and Medium-

sized Enterprises (SMEs) in Chuka Town” by Mutua, J. (2015), it was discovered that SMEs

do not maintain adequate accounting records due to a lack of accounting knowledge and the

high cost of hiring professional accountants. As a result, SMEs make ineffective use of

accounting data to assist financial performance measurement. In conclusion, Mutua J. (2015)

discussed that this situation made it impossible for the entrepreneurs to efficiently calculate the

earnings of the firm. While in a study conducted in Kenya by Chelimo, J.K. and Sopia, I.O

(2014), the findings show that bookkeeping positively enhanced growth of SMEs, measured

by its profitability and business expansion. The authors further discussed that bookkeeping can

be used as a tool for monitoring business transactions of SMEs.

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The World Trade Organization defines Electronic Commerce (E-commerce) as “the

production, distribution, marketing and sale or delivery of goods and services by electronic

means”. Ohidujjaman et. al (2013) described it as a revolution and turning point in online

business that contributes greatly to a country’s economy. While, Taher (2021) regarded it as a

powerful concept and process that has profoundly changed the present life. Businesses who

engage in e-commerce benefits in marketing due to its accessibility, convenience and

availability. Those that take advantage of the flexibility of the online environment create

customer value through lower cost, enhance choice, rapid fulfillment, and increased

socialization (Zhang et al, 2014; Shin 2014). With the use of the internet, online businesses

from home are able to maintain extremely low operating costs, requiring them to find creative

ways to leverage and combine limited resources (Daniel et al, 2014; Di Domenico et al, 2014).

With the tight competition in this venture, online businesses develop ways to compete. Thus,

with its highly entrepreneurial nature, Gagliardi (2013) recognized online home-based

business as a source of innovation and business diversity.

The introduction of the double-entry bookkeeping system, pioneered by Luca Pacioli,

posed an importance to businesses and has led to the evolution of how business operations are

managed (Ballada, 2012). Management enables the enterprise to satisfy the specific purpose

and mission of the business. Koontz and Weihrich discussed it as the process of designing and

maintaining an environment in which individuals, working together in groups, efficiently

accomplish selected aims. In the words of Henry Fayol, management is to forecast and to plan,

organize, coordinate and control. It makes the work productivity and workforce efficient for

achievement of goals.
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Management and bookkeeping are associated because record keeping, analyzing and

reporting of financial data are used in management like planning future operations, controlling

important systems, and decision making. Bookkeeping helps managers create timely decisions

by interpreting and analyzing overall financial data gathered through record keeping. It has

been recognized that appropriate accounting information is important for a successful

management of any business entity, whether large or small (European Commission (EC),

2008). This claim is in coherence with the study in 2016, “Role of Accounting Information on

Small and Medium Scale Business in Nigeria” by Adisa-Adedeji Fatai, that accounting

information is useful to businesses because it facilitates the solution or resolution of business

planning, organization, and control functions of companies as a social organization.

Small business owners who wanted to succeed managed the financial record keeping

the same as big businesses (Ademola, James, & Olore, 2012). In the study of Sibanda and

Manda (2016), revealed that failing to comply with maintaining complete accounting records

and non-adherence to adequate accounting practice can negatively affect the financial

performance of a business and can lead to an inevitable business failure.

As general business management is seen as one of the most important reasons for

keeping records, good record-keeping practices, in part induced by tax obligations, could lead

to improved management control for the businesses (Arhin, 2018). Thus, the need of this

information to support the decision making, especially in planning, organizing and controlling

the online business is vital. It will ensure that actions pertaining to growth and development

and addressing opportunities and threats are based on the actual representation of the financial

capability of the business. Alongside the current context, where social networks are used in

increasingly successful platforms for online business, a number of online businesses have not
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paid much attention to bookkeeping in relation to its commercial transactions. Making this

study relevant as the number of online businesses around the province increases due to limited

movement and physical contact brought by the pandemic.

In relation to the presented literature above, this study aims to understand the influence

of bookkeeping practices on the overall management of the online sellers by finding correlation

between these two variables and whether the demographic profile of the respondents have a

moderating effect on the bookkeeping practices and the overall management of business.

In addition, it is to determine the level of bookkeeping practices and level of

management employed in the online businesses, as well as the importance of bookkeeping

practices to the overall management of online business since bookkeeping is one thing that an

entrepreneur would not set aside and ignore to be successful in any, particularly, online

business ventures.

Review of Related Literature

This section covers the discussion of the related literature that has bearing on the

concerns of this study. Pieces of literature, documents, and published theses were scrutinized

to provide necessary framework for the study.

Bookkeeping

Bookkeeping, according to Benedict, et. al., (2017), is the practice of keeping track of

the money that enters and exits the business. Bookkeeping influences the growth and

development of the business by ensuring the utilization of information, tracking revenues and

taxes and determining the financial position (Ajao, et al. 2016).

Chelimo et al., (2014) conducted a study and discovered that bookkeeping was available

among the SMEs in Kabarnet Town Baringo County, Kenya, where majority of the businesses
 18

using a single-entry bookkeeping system with sales records being mostly kept by a larger

number of SMEs. Furthermore, the majority of SMEs maintained business records and claimed

that the records were not up to standard or in accordance with any established bookkeeping

standards. In another study, Accounting Record Keeping Practices in Small and Medium Sized

Enterprises (SME's) in Sri Lanka by Madurapperuma, et al., (2016), with the focus on

identifying accounting documents kept by the SMEs, the study revealed that only 20% of retail

businesses kept a comprehensive set of accounting records, whereas the majority of SMEs in

the service sector kept a cashbook only. Mutua J. (2015) conducted a study on the Impact of

Bookkeeping on the Growth of Small and Medium Enterprises in Chuka Town. In the findings,

only 52.7 percent of respondents kept financial records. As a result, many firms lack records

that the business owner can use. The author concluded that bookkeeping has an impact on the

growth of SMEs in terms of sales, business size, and profitability, and that there is a need for

collaboration from all stakeholders to ensure small businesses are operated in a more

professional manner in order to achieve overall economic growth.

Thus, with the aforementioned discussion, it can be noted that poor record keeping or

non-availability of financial records have consequences of mismanagement of resources and

poor cash management (Dawuda and Azeko, 2015). This situation is more likely to result in

the collapse of many SMEs, where more than half of the bankrupt or failed enterprises had no

records or merely had bank and taxation data. Failure to keep proper records is one of the

reasons why businesses fail as supported by Ibrahim (2015).

In a study conducted by Ibarra and Velasco (2015), Accounting knowledge and

practices of Micro, Small and Medium Enterprises (MSMEs) in Metro Manila and in Quezon

Province: A Comparative Analysis. The finding of the study made mention of the following,
 19

(1) MSMEs understand accounting principles and concepts; (2) the most common practices

include cash basis accounting, bad debt estimation based on credit sales, straight line method

of depreciation, net receivable estimation based on allowance for sales returns, official receipt

as a business document, and cash payment method.; (3) Accounting controls that are

commonly used include daily cash deposits, daily spending logging, and frequent budget

development.

Mkasiwa, T. A (2014) discussed that the financial reporting of SMEs has received

limited attention because many of the businesses in this sector are run by individuals or family

members, that frequently lacks knowledge and understanding of accounting and financial

concerns. According to Holmes, S., and Nicholls, D. (1989), the establishment of a sound

Accounting Information System (AIS) in SMEs is dependent on the owner's level of

accounting knowledge. Thus, training needs arise due to the gap between the knowledge, skills

and experience of the individual which is necessary to carry out the work (Fitrios, 2019).

Suppliers and franchisers (buyers) involved in long-term transactions with a firm would

also evaluate its accounting performances when evaluating the probability that the firm may

encounter financial difficulties and no longer fulfil its implicit obligations, according to Zhao,

Z. et al. (2015). In many circumstances, SMEs' owners or managers make business and

strategic decisions based on own perceptions or educated guesses because of the lack access

to quality accounting information. As studies show that many small businesses do not keep

complete records of accounts due to lack of knowledge in accounting and the cost of engaging

professional accountants (Mbroh & Attom, 2012).

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Methods of Bookkeeping

Paper-based journals/entries are used in manual record keeping systems, and the

journals are separated into parts for receipts and payments (Benedict, R. 2012). The primary

goal of manual bookkeeping is to record receipts and expenses in order to establish revenue

and expense records. According to Marshall (2015), keeping track of how and when money is

spent and earned can help a business maintain track of how the money is performing for it.

Benedict (2012) emphasizes that manual bookkeeping is simple to learn, is commonly

employed by small enterprises, and may be quite effective. Businesses can also use electronic

bookkeeping, in which an accounting software is utilized record transactions (Zakaria,et. al

2017) and automatically update journals. Through electronic bookkeeping, the transaction

recording procedure is reduced in the sense that transactions are quickly entered and matched

to the appropriate account.

Single entry systems are simpler to learn and use, but lack the precision and complexity

that a double entry system may give. According to Hussain (2013), a single-entry system is a

method of documenting financial transactions that is insufficient. It is a system that does not

keep track of either sides or accounting of all financial transactions and does not have a set of

standards for recording a company's financial transactions. Hence, a single-entry system is not

an appropriate method of documenting financial transactions since it does not provide all of

the information necessary by management and is a partial version of the double entry method,

as it does not reveal the full profit or loss or financial condition. Also, Scaglia J. et. al. (2013)

found that the single-entry bookkeeping system had certain limitations since it did not preserve

a complete record of all transactions. There was also a problem because there was no self-

balancing accounting procedure that could verify, to some extent, the accuracy of the books of
 21

accounts. Therefore, there was a desire for a consistently acknowledged accounting system

that could aid in the verification of the accuracy of books.

All of the aforementioned problems have been solved by the double entry system of

accounting. The single-entry system has been completely replaced by this system and is now

widely used everywhere. The main purpose of a double-entry bookkeeping system is to ensure

that a company’s accounts remain balanced and can be used to depict an accurate picture of

the company’s current financial position to both the management and external stakeholders

such as potential investors, current shareholders, suppliers, or the government.

Bookkeeping Practices

Nyathi and Benedict (2017) considered bookkeeping to be a day-to-day capability of a

business task, tracking money inflows and outflows. According to the European Commission

(2008), the accounting systems that are appropriate for Micro, Small and Medium enterprises

(MSMEs) are determined by the specific business operating demands, which includes the use

of financial records such as a general journal, the use of double-entry bookkeeping, the use of

simpler forms in creating the business' financial statements, and the application of the accrual

method of accounting.

With the assistance of bookkeeping, it is possible to avoid company failure; it is also

beneficial for solid financial planning and control, aids in decision making, is critical to the

survival and development of businesses and reveals the background picture that aids

organizational transformation (Ademola et al., 2012).

Recording

Journalizing is the process of recording transactions in a journal (Warren et al., 2013),

and some company owners are terrified of this accounting and record-keeping process (Abdul-
 22

Rahaman & Adejare, 2014). The general journal is the source book, and transactions are

documented chronologically in accordance with the date of occurrence. As a

result, MSMEs must adequately describe business transactions on journal entries. Maintaining

accurate records of revenue and spending enables a company owner to keep track of financial

activities (Abdul-Rahaman & Adejare, 2014). Dawuda and Azeko (2015) found that

insufficient record-keeping or the absence of financial documents results in resource

mismanagement and poor cash management. These factors contributed to the demise of several

businesses.

According to Hatteu (2012), the accounting system provides the information required

to make small scale business decisions. Oman, et al., (2015) concluded that MSMEs recognize

revenues when customers pay the full amount of goods or services purchased. In the case of

credit sales, revenues are recognized when products and services are paid for. Similarly, Mbroh

and Attom (2011) stated that a successful accounting system should be able to address the

information needs of both internal and external decision-makers for decision-making, rather

than simply keeping records. The company's records of business activities aid in decision-

making and provide verification as cited by Danford, et al., (2014).

Accounting functions are required in all organizations, large and small. Accounting

records backed up by properly validated vouchers are valuable evidence in court in the event

of customer, supplier, or employee fraud. Despite its importance, studies on small businesses

have revealed that 50 percent of them stagnate or deteriorate in performance, and about 60

percent fail during the first three years of operation due to management inefficiencies caused

by poor record keeping (Bowen, Morara, & Mureithi, 2009; Gronum, Verreynne, & Kastelle,

2012; Amoako, 2013; Mbroh & Attom, 2011; Ntim, Evans, & Anthony, 2014). Many are
 23

operating at a loss without realizing it due to poor or non-existent bookkeeping; also, many are

unable to obtain financing due to a lack of adequate records (Williams & Schaefer, 2013).

Thus, failure to keep proper records is one of the reasons why businesses fail as supported by

Ibrahim (2015). Moreover, recording could help small businesses, but owners may not have

the time or expertise to build and maintain a viable accounting journal (Ademola et al., 2012).

As supported by Samkin et al., (2014), limited resources may explain why small business

owners performed many of the tasks themselves and small businesses may have found it

difficult to perform functions such as bookkeeping (Breuer et al., 2013; Padachi, 2012; De

Lange, et al., 2012). Due to management's lack of knowledge, most small businesses were

unable to perform accounting functions effectively (Husin, et al., 2014). Thus, the decision-

making process for small business owners was simplified when business activities and

transactions were properly recorded (Breuer, et al., 2013; Obi, et al., 2014). Without keeping

records, it would be difficult to determine profitability and business vulnerability; hence,

bookkeeping has emerged as essential for the foundation of business (Ademola et al., 2012).

Financial Statement Preparation

Most small enterprises' financial statements include a balance sheet, an income

statement and a basic cash flow (Mike Enright, 2020). According to Gupta (2012), these

statement presents the summary of business records affects the company’s profit or loss.

When a business grows, it means that business grows with its own money and

resources. This growth also depends on the financial report of the company. A good financial

statement should make it easy for people to read and understand. Companies can better

understand the results and plan for a more profitable future if it shows a financial statement

that is clear and professional (Suh, 2017).

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As business owners realized the value of financial literacy and skills in decision-

making, its importance grew (Kidane, 2012; Samkin et al., 2014). Having an expert, according

to Banham, et al., (2014), small business owners needed advisers with knowledge outside of

the accounting industry to help sustain one’s businesses. Accountants with experience in other

business disciplines, such as marketing or finance, were able to assist small business owners

in achieving long-term viability (Barbera, et al., 2013; Gnan, et al., 2013). Similarly, small

business owners who hired accountants to manage the accounting system(s) and who could

also meet the advising needs were more successful (Banham et al., 2014; Jarvis, et al., 2012).

Constantly, Attom, et al., (2011) stated that a successful accounting system should be

able to meet the information needs of both internal and external decision-makers for decision-

making rather than just making one. Also, Bekhradinasab, V. (2020) conducted a study

wherein the income statement returns can be predicted by using pricing and differentiation

strategies. Thus, financially oriented business management styles contributed to innovative

high-growth strategies (Ademola et al., 2012). Business owner should understand financial

reporting and overcome barriers by implementing alternative methods of producing reports,

and that the information contained in the reports met the internal needs of the business and

aided the decision-making process in order to improve business performance (Baran, et al.,

2015).

Balance Sheet

The balance sheet depicts the business’ net worth, Ward (2012). It is a statement

of a company's financial condition that shows its assets, liabilities, and owners' equity

at a given point in time. It is considered as one of the most important tools for business
 25

owners that helps them figure out how well a company is doing financially. This also

let the user know what the company has and what it owes.

This financial report allows the users to find out if the company has a positive

net worth if it has enough cash and short-term assets to pay its debts, and if the company

is very indebted compared to its peers (Fernando, 2022). Lastly, it would help the

management when it comes to the decision-making needed in the business.

Income Statement

Often known as a profit and loss statement, income statements illustrate how

much profit a company made within a certain reporting period as well as the amount of

expenses expended while producing income. With the purpose of showing the

company’s financial performance, it includes the cumulative impact of revenue, gain,

expense and loss of transactions.

In a study conducted by Bekhradinasab, V. (2020), the returns in the income

statement can be predicted by adopting pricing and differentiation strategies. Thus, the

financial report helps the management decide what sort of business strategy it should

adopt for the income statement to become favorable.

Statement of Cash Flow

Cash flow is essentially the movement of money into and out of your business;

it's the cycle of cash inflows and cash outflows that determine your business' solvency.

It includes inflows and outflows of cash from operating activities, investing activities

and financing activities. Cash flow analysis helps to maintain adequate cash flow for

the business and to provide the basis for cash flow management (Noor et al. 2012).

Cash flows give important information for a sustainable development in the business,
 26

in maintaining the company's solvency, and protecting the company from the risk of

bankruptcy (Plaskova, N.S., 2020). In a study conducted by Bhundia, A. (2012), it

concluded that there is a positive relationship between earnings management and free

cash flows wherein the firm’s free cash flows stimulate earnings management.

Monitoring of Business Finances

Monitoring is a tool used in modern economic research to control economic processes,

especially financial aspects, at the micro and macroeconomic levels. According to Kovalev

(2011), financial monitoring in a company is a major subsection of financial management, and

its main characteristics are to optimize balance, mobilize and place resources, optimize internal

activities, be based on operational and accounting data with limited access, and make

operational decisions.

The fundamental element of the financial monitoring process is the continual

observation and analytical assessment of the dynamics of the company's financial standing,

revealing changes and bad tendencies in its financial development (Anureev,

2017). Moreover, according to Abdul-Rahamon, et al., (2014), accounting records help with

resource allocation and performance management. To effectively allocate resources, resource

allocation requires not only record keeping but also an assessment of the viability of the

business to be undertaken through capital budgeting.Comparison of actual performance against

standards and determination of the variances of actual budget to the planned budget.

Monitoring the expenses and cutting unnecessary costs will help the company’s income and

cash flow.

Thus, financial monitoring can be defined as a system of continuous observation,

analysis, and forecasting of the primary indicators of a company's financial and economic
 27

condition in order to timely devise and implement appropriate managerial solutions and assess

the efficacy. Abdul-Rahamon, et al., (2014); Ademola et al., (2012) views were similar wherein

keeping the information accurate, meaningful, and timely was a foundation necessary for

businesses to formulate decisions for survival and growth. the success of a business depended

on the accuracy of records kept and used to help make and guide decisions (Obi, et al., 2014;

Yin, L., 2014). Business owners needed to constantly monitor and evaluate the company's

progress as changes to the business plan occurred (Gapp, et al., 2014). The accounting system

was involved in continuous monitoring because it was part of the firm's evolution that created

the environment in which organizational changes occurred (Botes, et al., 2013).

According to Kovalev (2011), financial monitoring is based on the evaluation of

financial statements; only with analytical coefficient systems can he foresee insolvency and

spot continual changes in the company's financial flows. Using the financial monitoring results

based on efficient methods, company managers will be able to set the correspondence between

intermediate results of production activities and the objectives set for these stages, to identify

signs and preconditions of the company's financial standing disintegration in real - time basis,

and to reveal unused reserves to boost financial activity efficiency (Bondarenko V.A., et. al,

2018). Thus, as to the claims of Kuznetsova et. al., (2017), financial monitoring is vital while

tracing the changes in economic trends to support the certain level of competitiveness and

business success.

Furthermore, Hatteu (2012), found that keeping proper records on collectibles and

payables is important in the business operation to monitor the period of when to collect and

when to pay obligations as supported by the claims of Benedict, et al., (2017), wherein most
 28

micro-entrepreneurs frequently record all the money withdrawn from the business as well as

use business records to determine cash available within the business.

Filing of Taxes

Micro, Small, and Medium Enterprises (MSME) play an important part in the progress

of the city by generating employment and taxes for the local government, since adequate

records of business-related transactions and events are necessary in running a successful

enterprise. Moreover, adequate accounting records, specifically the financial statements serve

as a foundation for a complete and accurate income tax computation.

According to the World Bank, maintaining fair tax rates can support the development

of the private sector and the formalization of firms, including effects on firm creation and the

development of small and medium-sized enterprises (SMEs). Small and medium-sized

businesses, which contribute to economic growth and employment but do not contribute much

to tax income, benefit most from low tax rates. Creating an environment that encourages SME

growth while maintaining tax compliance is a difficulty that all governments face. Parallel to

the study conducted by Nasrullah in 2020, showed that a tax on online businesses on Instagram

have been earning a lot of money but not being taxed owing to a lack of precise obligatory

laws. As a result, the government intends to publish a new regulation to impose a tax on the

revenue of online businessmen on Instagram, with the rule that Instagrammers' income is

qualified as taxable income and value added tax as defined by the Indonesian Tax Law.

Online businesses, like non-online or physical enterprises, must follow the rules

outlined in the National Internal Revenue Code (NIRC). This involves registration, the

issuance of receipts or invoices, the withholding of certain taxes, the filing of tax returns, and

the keeping of books of accounts. The Bureau of Internal Revenue's goal is not to increase the
 29

tax responsibility of small business owners, but rather to bring income tax into the country's

tax net for larger internet enterprises such as Lazada, Netflix, Shopee, and Google. The online

registration that has begun is aimed at large internet merchants or dealers rather than small

firms (Padin, 2020). With proper tax management, owners benefit in the long term; better tax

management is related to higher returns (Mulyadi, M.S., 2015). Thus, A well-functioning tax

system allows the management to fulfill paying of taxes at a higher-level (Kosov. M.E., 2016).

Online Business

Online business is an entity run by a self-employed individual or partners that relies

heavily on the internet to conduct a substantial amount of business operations such as sourcing,

selling, delivering services, and interacting with stakeholders. Taher (2021) regarded electronic

commerce as a powerful concept and process that have profoundly changed the present life.

This modernizes previous definitions by recognizing that companies utilize the internet for a

broad variety of commercial operations (Anwar, 2014).

E-commerce is one of the components of the digital economy (Charim et al., 2019). It

connects a higher range of customers and sellers and enables a greater variety of products and

services to be offered (Mayer-Schönberger and Cukier, 2013). Online platforms are also a low-

cost way to collect client feedback. Several respondents mentioned this advantage, which were

used for product development or marketing. The influence on running expenses varies with the

options. Some e-commerce platform customers want to sell directly to save platform costs. But

e-commerce platforms are cheaper than physical storefronts (Oxera, 2015). However,

according to Allen Cranston (2020), businesses with physical store are more visible and can

establish customers' trust in purchasing decisions when customers will visit the store's website.
 30

As mentioned by Palic, M., (2015), more, if not the majority, of online businesses decided to

pursue merchandising business due to its cost-effectiveness and ease of access to products.

The sudden rise of online businesses is brought about by the pandemic, people needed

a way to survive and the digital platform provided an opportunity. Online businesses can

expand its business marketing optimally at such a lighter cost compared to an offline business.

In conducting business online, recording of transactions and finances often gets overlooked.

Business owners must also do bookkeeping even in the simplest of ways, since online

transactions are prone to fraudulent acts, keeping a record of your transactions makes it easier

to monitor. Bookkeeping will also help online business owners monitor its business

development (Ikhtiari, K., 2021).

Business Management

According to Henry Fayol, management is to forecast and to plan, organize, coordinate

and control. Management refers to a series of interrelated functions that operates, creates and

directs purposive organization through systematic, coordinated and co-operated human efforts.

Furthermore, management is goal-oriented, integrates resources, continuous and all pervasive

(Juneja, 2015).

Management helps with the optimum utilization of resources, helps with achieving

group goals, reduces costs, and establishes sound organization. Accounting information is

useful to businesses because it facilitates the solution or resolution of business planning,

organization, and control functions of enterprises as a social organization. Small business

accounting provides the crucial financial information required to make effective business

decisions, such as determining how much merchandise to purchase and establishing what

salaries the company can afford to pay (Amidu et. al, 2012).
 31

According to Ajao, et. al. (2016) accounting data is useful to businesses since it helps with

the activities of planning, organizing, leading, and controlling. As a result, it is widely

recognized that accurate bookkeeping and accounting information, as well as financial

statements, are vital for the successful functioning of any business, large or small. According

to Atanasova, et al., (2021), the favorable findings for the use of planning, organizing, and

controlling in the activities of the studied enterprises are attributable to entrepreneurial

initiative and activity in making entrepreneurial decisions to start and operate one's own

business, and bookkeeping, which is a financial control tool that lets managers to know the

financial positions of the businesses as cited by Eric, et al., (2012).

Planning

Planning entails deciding ahead of time what to do, how and when to do it, and who

will execute. It is the systematic process of making decisions about goals and activities the

organization will pursue (Bateman & Snell, 2013). It is a continuous process of identifying

new and emerging opportunities to the organization (Thorn, 2012), as well as combating threats

and dangers, as appropriate.

When it comes to business or management, planning is the first activity that managers

conduct to define the pattern of activities required to meet future events in order to achieve

organizational goals. It allows the business to bridge the gap from where is the business

currently and where it wants to go. Alattar et al. (2014), who discovered that planning

formalization has a positive and highly significant impact on the likelihood of belonging to a

group of growth firms. However, the findings of Biger (2012), Akroyd, et al., (2013), who

discovered that small business owners who lacked knowledge of strategic planning, possibly

due to a lack of business education or experience, suppressed business growth.

 32

According to Grigorievna (2020), planning also serves as a valuable management tool

from an internal viewpoint of the company. A systematically elaborated and regularly updated

financial plan, with a profound insight into all business matters, helps the management to

efficiently plan the company’s development and prepare the necessary modification measures

in a structured way. Such financial plan can serve as a guide to daily decision making and as a

control tool in managing the current business and place a greater emphasis on revenue

planning. Moreover, production, cash flow, and financial position budgets are heavily

implemented by approximately 75% of budgeting users, according to Ahmad (2017).

However, as Croll, et al., (2012) point out, a smaller firm may only require a basic budget and

some standard cost figures for more infrequent pricing and cost decisions, primarily for

planning and control. But, contrast with those of Martnez, et al., (2012), who found that self-

employed individuals with prior experience as employees and a management style that valued

cooperation and planning made significant progress for the business.

Planning is a vital part of financial management, and the first task of management itself.

Financial planning is done in every phase of an organization, in fact, as early as the start-up

phase. It involves creating a plan that sets out how much capital and how many resources the

company requires (Litman, 2020). This executive action that incorporates the abilities of

predicting, influencing, and regulating the nature and direction of change (Sharma, 2020)

assists the manager in shaping the organization’s future. Similarly, according to the study of

Ahmad (2017) most respondents (73 percent) indicated that annual budgets were widely used,

compared to monthly and continuous rolling budgets by less than half of total users.

Also, Lucas et al. (2013) discovered that SMEs focus on controlling information rather

than assisting decision making, and there is a strong tendency to make decisions without
 33

adequate, or even any, financial information or analysis. Despite its importance, accounting

reports were not widely used as the primary means of evaluating business performance (Halabi

et al., 2012). Thus, knowing what to track was critical in decision-making because the data was

used to develop and maintain strategies that met objectives (Sarraf et al., 2013).

Organizing

According to Gordon (2021), The process of combining people, arranging resources,

and allocating scheduled tasks to carry out the manager's strategy is known as organizing. This

function is carried out once a plan in achieving organizational goals is in place (Cohn, et al.,

2016). Goals defined throughout the managerial planning process drive organizing. It entails

creating an organizational structure that enables for the effective completion of activities in

order to meet objectives and achieve objectives.

A study in Kenya by Kabiru, (2018), concluded that organizing has a significant

influence on the organizational performance of businesses. In the same study, identifying the

tasks to be performed is critical to the development of the business' work flow process and

achieving desired business outcomes. Moreover, according to the study conducted by Fatima,

et. al.,(2016) on Accounting Information System: The Need of Modernisation, states that

recording and presentation of financial position enables the company to organize information

in an accurate and timely manner to the manager, internal and external users. In addition, the

study entitled, “Effects of Accounting information system in Organizational Profitability” by

Patel (2015) concluded that monitoring finances and record keeping enables the business to

make better decisions, organize internal control systems and enhance performance measures.

As to Holmes, et. al., (1989), the establishment of a sound Accounting Information

System (AIS) in SMEs is dependent on the owner's level of accounting knowledge. Thus,
 34

training needs arising due to the gap between the knowledge, skills and experience of the

individual with the necessary to carry out the work for the satisfaction of its customers (Fitrios,

2019). With this, according to Singh (2020), the management accountant can help the

management in organizing the human and nonhuman resources of the business by analyzing

different functions and assigning specific responsibilities. But, if the owner of the business has

employees, may prefer not to delegate tasks because owner-manager can do the tasks better.

However, according to John et al. (2018), one effect of not delegating responsibilities is poor

organizational inefficiency and failure to achieve the institution's goals, one of which is to

coordinate and supervise the various functions. Customer satisfaction measures, according to

Ittner, et. al., (2015), are leading indicators of non-financial performance and accounting. This

is supported by a subsequent study by Banker et al. (2013), in which it was discovered that

there is a positive relationship between customer satisfaction measures and future accounting

performance.

According to Charifzadeh (2017), managers must organize the resources of a business,

meaning the owners arrange the different elements of an organization into a purposeful and

efficient order or structure. Such elements or resources involve assets, funds, human resources

(workforce), and information.

Controlling

Installing processes to direct the team toward goals and evaluating performance against

goals is what control is all about (Batemen & Snell, 2013). The control function's mission is to

guarantee that the company stays on track to meet its objectives. As a result, management's

control role is inextricably linked to the planning phase.

 35

Managers set and convey performance criteria for people, processes, and devices as

part of the controlling function. According to Charifzadeh (2017), managers want to make sure

that things evolve in the intended manner: goals have been set with the intention of achieving

them, projects have been started in order to be completed as planned, and rules have been set

based on the expectation that are followed. Goal alignment is critical because most business

leaders must spread the influence across many areas of the organizational environment to

ensure an appropriate span of control, as cited by Kao, et al., (2015). Moreover, Raymond

Onyema Obinozie (2016), asserts that non-financial management control systems are strongly

and positively related to business organizational performance in terms of product and

organizational value.

As to the findings of the study conducted by Voku, et. al. (2014), controlling achieves

its goal by coordinating and integrating business functions and providing information to ensure

the rationality of executive actions, particularly those involving planning and monitoring.

Harvard Business School Online (2020) supports that, recording, financial statement

preparation, monitoring of business finances induces the management to assess and control the

entity through measuring the impact of the company's effort through direct expenses related to

the revenue. According to Singh (2020), the management accountant helps in controlling the

performance of the organization by using standard costing, budgetary control, accounting

ratios, cash and funds flow statements, cost reduction programs and evaluating the capital

expenditure proposals and return on investment. Moreover, Monja-kare, et al., (2013) found

that controlling was implemented in more than 60% of the most successful Croatian companies

and was regarded as a critical factor in company success, indicating that an effective

controlling function is positively related to business efficiency. Thus, controls should be

 36

implemented at all levels of the organizational structure to identify any potential negative

effects on the company (Dědečková, 2020). Kozarevic and Vehabovic's (2020) also claim that

adopting the controlling function had a positive impact on the development of net working

capital.

Types of Business

Economists frequently identify three broad areas of the economy: the primary sector,

which involves obtaining and harvesting natural goods from the earth, such as agriculture,

fishing, and mining, the secondary sector, which involves processing, manufacturing, and

construction, the tertiary sector provides services such as retail, entertainment, and banking.

Understanding industry distinctions enables business owners to connect effectively with its

target market, stay ahead of industry developments, and help monitor business performance.

However, as to the study conducted by Bui et al. (2020), the findings concluded that there was

no difference in the application of management accounting in the type of enterprise. accounting

in the type of enterprise. The authors further explained that the management accounting applied

relies heavily on the requirements of the manager and does not depend on the type of enterprise.

Service

When a task is offered by an entity to another entity it is defined as service. The service

industry emphasizes on quality importance since it has to please and meet its customers’ needs

and demands. Customer satisfaction, competitor activity, external factors, nature of the service

and internal organization factor makes quality service necessary (Poor et. al, 2013). A service,

according to Philip Kotler (2012), is an act or performance of one party to another that is

primarily intangible and does not result in ownership of something. It could be linked to a

physical product or not.

 37

The primary economic activity in the service industry is the provision of services rather

than producing goods. Providing a good amount of opportunities to freelancers and

entrepreneurs is a key characteristic of the service industry. (Service Economy: Definition &

Characteristics, 2015).

Retail, banks, education, real estate, social work, hotels, social work, electricity, gas,

and water supply, health, telecommunications, media, and recreation are some of the activities

that are included in the service industry. (Umarye, 2020). Customer satisfaction hugely impacts

the service industry since in a service industry the product that you offer is composed of

expertise and labor for the benefit of your customer. Customer service experience is also a way

for businesses in the service industry to differentiate themselves from competitors.

Merchandising

According to the American Marketing Association, merchandising is the planning

involved in marketing the appropriate item, in the right place, at the right time, in the right

numbers, at the right price. Merchandising is a type of business that we are interacting with on

a daily basis. It is a business which purchases and resells the purchased products to consumers.

(Merchandising Business: Definition & Examples, 2016).

Any business that purchases goods from a distributor and resells them at a different

price point is defined as a merchandising business. The merchandising business can be

generally identified into two: retail and wholesale. (Merchandising Company: Definition,

Activities & Income Components, 2014)

Merchandising may also be viewed as a variety of tools that helps in creating and

increasing sales for the business. It is also a technology to sway the shopping behavior of

buyers in the store to create sales. (Chkalova & Efremova, 2019).

 38

Manufacturing

According to Marcel Boussac (2021), manufacturing is any industry that produces

finished goods from raw materials through the use of manual labor or machines and is often

carried out in a methodical manner with a division of labor. Examples of manufacturing

industries are clothing industries, electronics, chemical industry, pharmaceutical industries.

The manufacturing industry is an important sector in many national economies, and it

contributes to long-term economic growth. At the same time, it is a sector that is sensitive to

internal and external factors that cause oscillations in the economic cycle, mirroring or even

outpacing the development of economic cycles (Herman, E. 2016). Manufacturing involves

the transformation of raw materials into finished goods, the process involves a whole sequence

of activities from innovating until recycling of the objects. (Roos, G., 2016).

Number of Years in Operation

Business operations are the daily actions that a company does in to improve the value

of the company and earn a profit. The activities can be optimized to create enough money to

pay expenses and produce a profit for the business' owners and to prolong the existence of the

business. The operations of a firm differ among industries and are built to meet the needs of

the individual industries. Understanding the procedures of a given industry can help a business

succeed and will have a future outlook.

According to the Bureau of Labor Statistics' Business Employment Dynamics,

approximately 80% of small businesses will survive the first year of operation. As of the most

recent data, 79.8 percent of small businesses that started in March 2016 survived to March

2017. Though the first year might be filled with financial hardships as entrepreneurs work to

get the start-up business off the ground, it can also be filled with small successes and rewarding
 39

experiences. Owners can celebrate all of the milestones of starting a new business, such as

incorporating, creating a website, or getting media attention (McIntyre, 2020).

Approximately 70% of small businesses will survive the second year of operation.

According to recent data, 69.2 percent of small businesses that started in March 2015 survived

to March of 2017. In year two, success is measured by meeting growth targets, no matter how

small. Year two should see a huge expansion in the company's client base. At this point, success

might be defined as either breaking even or making a profit (McIntyre, 2020). Similarly,

Mohamad Alayuddin (2008) discussed that the length of business operations can be a

determining factor that represents the stability of a business, with the main challenge of

financial stability in the first three years of business operation.

Approximately half of all small businesses will survive the fifth year of operation.

According to data, 50.2 percent of small businesses that launched in March of 2012 survived

until March of 2017. Success can be described as understanding that the company has a solid

business idea and is prepared to work hard over the next few years to see it through (McIntyre,

2020).

Around 30% of enterprises will survive the tenth year of operation. Many businesses

that are dubbed "overnight successes" have actually been in operation for at least ten years.

Similarly, according to studies on small businesses, half of them stagnate or deteriorate in

performance, and roughly 60% collapse during the first three years of operation due to

management inefficiencies caused by poor record keeping (Bowen, et al., 2009; Gronum, et

al., 2012; Amoako, 2013; Attom, et al., 2011; Anthony, et al., 2014).
 40

Scope of Clients

A client base, according to Shown Grimsley (2021), is simply the group of customers

the business serves or plans to serve. A client base, also known as a target market, is a group

of consumers within a larger consumer market to whom you are aiming to sell goods or

services, which includes present and previous customers.

Customers are the driver for the business revenues, without them the business ceases

to exist. All business entities position its strategies in a customer driven manner. It is important

for a business to identify which customer groups and clients of interest to target. When the

organization plans to satisfy its clearly defined clients (Kotler, 2012), it needs to adapt to the

target audiences’ needs and wants (Lynn, 2011). Through this, the business is able to

understand the customers better through feedbacks that are relevant for business use. Thus,

according to Niel Kokemuller (2018), organizations with broad target markets can gain

tangible and intangible benefits such as increased total customers, media flexibility, higher

revenue, and cash flow. Similarly, according to the study conducted by Pehrsson (2011), the

findings of the study concluded that the broader the product or customer scope of a firm, the

better the financial performance if the firm operated in a growing market. It further implied

that the business must be aware of its main competitor’s scope, and adapt its scope to the level

of the market growth.

Service

Services are economic actions that bring about a desired change in, or on behalf of, the

service recipient, delivering value and benefits for the clients. Thus, just as in commodities,

the emphasis remains on customer satisfaction, but in services, the emphasis is on the human
 41

reception of these benefits (Bhat, 2019). Today, according to Thimmanna Bhat (2019), the

services industry is acknowledged as a critical field for economic well-being.

Consumption of services such as education, health care, and civil services,

transportation and communication, tourism, and so on are some of the services offered. Event

management and media services for major sporting and cultural events captivate billions of

people, produce enormous income, and significantly contribute to the economic prosperity of

the country and governments hosting such events. As a result, consumers' attention has

switched significantly from increased purchase of physical products to increased consumption

of services. Indeed, once fundamental needs are met, consumers appear to prefer more services

than things, and a greater standard of living usually indicates increasing consumption of

services rather than increased consumption of products alone (Bhat, 2019).

Merchandising

The merchandising industry covers an enormous range of consumer needs. This

includes department stores, chain stores, supermarkets, drug stores, footwear, general apparel

for men, women and children, health and beauty, home improvement hardware, mass

merchants, jewelry and accessories, hobby and craft, electronics supply, etc. Whether physical

or digital store, merchandising aims to influence customer intent to reach business and sales

goals.

According to Uddin (2014), merchandising is the process of designing, developing, and

presenting a product line for a certain target market; or those individuals that are buying raw

materials & accessories, producing garments within scheduled time, including price,

assortment, style, and services. Merchandising stands out as a business activity among

companies that deal with items that need to be changed often.

 42

Manufacturing

In the manufacturing industry, bulk purchasers are typically dealers or distributors of

the business' product. If the business has a strong dealer network, the product will naturally

reach the end customers, and the sales volume will continually be increasing. Or perhaps, the

business has a set of consumers who buy from the manufacturing unit of the firm on a regular

basis but only under a certain contract. In this situation, these account for a significant portion

of sales (Chawla, 2017).

According to Olise and Ojiaku (2018), the client set of a manufacturing industry may

be separated into two parts: the apparent customer and the user, which is a subtlety that many

businesses overlook. The apparent client is the one or group of individuals who make

purchasing decisions and, in essence, hold the purse strings. The user is the individual or group

that actually uses the goods or receives the service directly.

Relationship of Bookkeeping Practices and Overall Management

Bookkeeping is an essential function of business for financial management. It is the

keeping of accurate records showing the financial health and position through financial

statements. In addition, financial data are not just presented but also organized and analyzed

to track income and expenses as well as strategize for the future. It also influences the growth

and development of the business by ensuring the utilization of information, tracking revenues

and taxes and determining the financial position (Ajao, et al. 2016).

A record keeping system enables entrepreneurs to provide accurate and timely financial

reports that demonstrate the progress and present state of an organization. Accounting for a

small business gives an instant view of the company's current financial situation, indicating

whether it has any cash on hand and whether its debts and liabilities exceed its current cash
 43

and receivables (Boame I., et. al., 2014). Small business accounting provides the crucial

financial information required to make effective business decisions, ranging from determining

how much merchandise to purchase to dictating what wages the company can afford to pay

(Ajao, O. et. al., 2016). Accounting accuracy enables small firms to budget for the future

month, quarter, or year.

The preparation required to create a budget also serves to notify the business owner of

impending cash-flow concerns and periods of unusually low or high demand (Zakaria, W., et.

al., 2017). Previous researches (Boame, I., et al., 2014., Ajao, O., et al., 2016, Kirsten C., et

al., 2012) has shown that performing bookkeeping duties allows business owners to benefit in

a variety of ways, including profit calculation, inventory purchasing decisions, income

statement preparations, measuring business performance by comparing current and previous

financial records, understanding the big picture of the business financials, forecasting,

budgeting, and attracting customers. It was discovered that micro-entrepreneurs engage in

insufficient bookkeeping procedures and struggle to understand suitable bookkeeping

standards, leaving them unable to reap the above-mentioned outcome benefits of bookkeeping

(Zakaria, W., et. al., 2017).

As bookkeeping is one of the most important business skills, it is essential for micro-

entrepreneurs to practice it. An accurate record of the financial performance of the business

serves as a vehicle for monitoring performance in specific areas. In a study on the types of

accounting system used by failed enterprises, inefficient or absent accounting records were a

crucial factor in the demise of many businesses. Due to the lack of proper financial accounting

practice, two-thirds of new businesses survive for at least two years and only 44% survive for

at least four years (Kofi, M.E, et al., 2014). Another analysis is on the Impact of Accounting
 44

Records Keeping on the Performance of the Small-Scale Enterprises in Ogbomosho, Oyo

State, Nigeria, in which the majority of respondents were found to keep business accounting

records and on a cash basis records were preserved (Adekunle et al., 2014).

Sales purchases, creditors and debtors, receipts, invoices, and payment vouchers were

applied as record keeping documents in lowering operating costs and increasing productivity

and efficiency, since accounting records are very important for decision making, it was

concluded that record keeping is crucial for decision making and business adjustment

(Olatunji, 2013). Thus, proper record keeping contributes significantly to the performance of

small-scale businesses. Moreover, if proper records were adequately kept, it would facilitate

efficient, proper timely decision-making, trace problems and to provide appropriate solutions,

and enhance performance in small business (Ernest, 2018).

The importance of availability of accurate financial information to owners and

managers for measuring of performance cannot be over emphasized (Amoako et al., 2014) as

it enables entrepreneurs to provide accurate and timely financial reports that demonstrate the

progress and present state of an organization. This is in relation to the findings of Muhindo,

A., Mzuza, M. K., & Zhou, J. (2014) that there is a positive relationship between the accounting

information system and profitability level of small-scale businesses and Mutua (2015) that

there is a strong relationship between business performance and the level of training in business

management, especially in business finance record keeping. Where accounting information

plays an important role in facilitating the decision-making process of the management.

 45

Synthesis of the Literature

Bookkeeping influences the growth and development of the business by ensuring the

utilization of information, tracking revenues and taxes and determining the financial position

(Ajao, et al. 2016). Business managers expressed satisfaction by stating that the accounting

information aids operation in identifying each resource capability (Legaspi, 2018). Chelimo,

et al., (2014) conducted a study and concluded that bookkeeping has an impact on the growth

of SMEs in terms of sales, business size, and profitability, and that there is a need for

collaboration from all stakeholders to ensure small businesses are operated in a more

professional manner in order to achieve overall economic growth.

Benedict emphasizes that manual bookkeeping is simple to learn, is commonly

employed by small enterprises, and may be quite effective. Businesses can also use electronic

bookkeeping, in which an accounting software is utilized to automatically update journals.

According to Eric, et al., (2012), the single-entry system is an "informal" accounting or

bookkeeping system in which a user enters only one business financial transaction. Accounting

entries in double entry accounting systems record financial activities in respect to assets,

liabilities, income, and expenses. The single-entry system has been completely replaced by this

system and is now widely used everywhere. The main purpose of a double-entry bookkeeping

system is to ensure that a company’s accounts remain balanced and can be used to depict an

accurate picture of the company’s current financial position to both the management and

external stakeholders such as potential investors, current shareholders, suppliers, or the

government.

Benedict, et al., (2017) considered bookkeeping to be a day-to-day capability of a

business task, tracking money inflows and outflows. With the assistance of bookkeeping, it is
 46

possible to avoid company failure; it is also beneficial for effective financial planning and

control, aids in decision making, is critical to the survival and development of businesses and

reveals the background picture that aids organizational transformation (Ademola et al.; 2012).

This is beneficial to both the owner and outside users in terms of information and legal

evidence. Maintaining accurate records of revenue and spending enables a company owner to

keep track of financial activities (Abdul-Rahaman, et al., 2014). Azeko, et al., (2015) found

that insufficient record-keeping or the absence of financial documents results in resource

mismanagement and poor cash management. Thus, Failure to keep proper records is one of the

reasons why businesses fail as supported by Ibrahim (2015). According to Gupta (2012), the

summary of business records affects the company’s profit or loss.

According to Enright (2020), most small enterprises' financial statements include a

balance sheet, an income statement and a basic cash flow. Companies can better understand

the results and plan for a more profitable future if it show a financial statement that is clear and

professional (Suh, 2017). Users can use the balance sheet to find out if the company has a

positive net worth if it has enough cash and short-term assets to pay its debts (Fernando, 2022).

The income statement helps the management decide what sort of business strategy it should

adopt for the income statement to become favorable. Cash flow analysis helps to maintain

adequate cash flow for the business and to provide the basis for cash flow management (Noor

et al. 2012).

According to Kovalev (2011), financial monitoring can be defined as a system of

continuous observation, analysis, and forecasting of the primary indicators of a company's

financial and economic condition in order to timely devise and implement appropriate

managerial solutions and assess the efficacy.

 47

According to the World Bank, maintaining fair tax rates can support the development

of the private sector and the formalization of firms, including effects on firm creation and the

development of small and medium-sized enterprises (SMEs). The Bureau of Internal Revenue's

goal is not to increase the tax responsibility of small business owners, but rather to bring

income tax into the country's tax net for larger internet enterprises. Tax management benefits

the owners in the long term; better tax management is related to higher returns (Mulyadi, M.S.,

2015).

E-commerce is one of the components of the digital economy (Charim et al., 2019). It

connects a higher range of customers and sellers and enables a greater variety of products and

services to be offered (Cukier, et al., 2013). In conducting business online, recording of

transactions and finances often gets overlooked. Business owners must also do bookkeeping

even in the simplest of ways, since online transactions are prone to fraudulent acts, keeping a

record of the business transactions makes it easier for the business owner to monitor its

finances. Bookkeeping will also help online business owners monitor the development in the

business (Ikhtiari, K., 2021).

According to Henry Fayol, management is to forecast and to plan, organize, coordinate

and control. Accounting information is useful to businesses because it facilitates the solution

or resolution of business planning, organization, and control functions of enterprises as a social

organization. Small business accounting provides the crucial financial information required to

make effective business decisions, such as determining how much merchandise to purchase

and establishing what salaries the company can afford to pay (Amidu et. al, 2012).

According to Grigorievna (2020), planning serves as a valuable management tool from

an internal viewpoint of the company. A systematically elaborated and regularly updated

 48

financial plan, with a profound insight into all business matters, helps the management to

efficiently plan the company’s development and prepare the necessary modification measures

in a structured way.

According to Holmes, S., and Nicholls, D. (1989), the establishment of a sound

Accounting Information System (AIS) in SMEs is dependent on the owner's level of

accounting knowledge. Thus, training needs arising due to the gap between the

knowledge,skills and experience of the individual with the necessary to carry out the work

(Fitrios, 2019).

According to Singh (2020), the management accountant helps in controlling the

performance of the organization by using standard costing, budgetary control, accounting

ratios, cash and funds flow statements, cost reduction programs and evaluating the capital

expenditure proposals and return on investment. Thus, controls should be implemented at all

levels of the organizational structure to identify any potential negative effects on the company

(Dědečková, 2020). Customer satisfaction, competitor activity, external factors, nature of the

service and internal organization factor makes quality service necessary (Poor et. al, 2013).

A service, according to Philip Kotler, is an act or performance of one party to another

that is primarily intangible and does not result in ownership of something. Any business that

purchases goods from a distributor and resells them at a different price point is defined as a

merchandising business. The merchandising business can be generally identified into two:

retail and wholesale. (Merchandising Company: Definition, Activities & Income Components,

2014). According to Marcel Boussac (2021), manufacturing is any industry that produces

finished goods from raw materials through the use of manual labor or machines and is often
 49

carried out in a methodical manner with a division of labor. Business operations are the daily

actions that a company does to improve the value of the company and earn a profit.

According to the Bureau of Labor Statistics' Business Employment Dynamics,

approximately 80% of small businesses will survive the first year of operation. About 70% of

small businesses will survive the second year of operation. Approximately half of all small

businesses will survive the fifth year of operation. Around 30% of enterprises will survive the

tenth year of operation.

Today, according to Thimmanna Bhat (2019), the services industry is acknowledged

as a critical field for economic well-being and a greater standard of living usually indicates

increasing consumption of services rather than increased consumption of products alone (Bhat,

2019). Merchandising stands out as a business activity among companies that deal with items

that need to be changed often. According to Ojiaku, et al., (2018), the client set of a

manufacturing industry may be separated into two parts: the apparent customer and the user,

which is a subtlety that many businesses overlook. The apparent client is the one or group of

individuals who make purchasing decisions and, in essence, hold the purse strings. The user is

the individual or group that actually uses the goods or receives the service directly.

Bookkeeping is an essential function of business for financial management. It is the

keeping of accurate records showing the financial health and position through financial

statements. In addition, financial data are not just presented but also organized and analyzed

to track income and expenses as well as strategize for the future. It also influences the growth

and development of the business by ensuring the utilization of information, tracking revenues

and taxes and determining the financial position (Ajao, et al. 2016).
 50

Small business accounting provides the crucial financial information required to make

effective business decisions,ranging from determining how much merchandise to purchase to

dictating what wages the company can afford to pay (Ajao, O. et. al., 2016). Accounting

accuracy enables small firms to budget for the future month, quarter, or year. The preparation

required to create a budget also serves to notify the business owner of impending cash-flow

concerns and periods of unusually low or high demand (Zakaria, W., et. al., 2017). Previous

research (Boame, I., et al., 2014., Ajao, O., et al., 2016, Kirsten C., et al., 2012) has shown that

performing bookkeeping duties allows business owners to benefit in a variety of ways,

including profit calculation, inventory purchasing decisions, income statement preparations,

measuring business performance by comparing current and previous financial records,

understanding the big picture of the business financials, forecasting, budgeting, and attracting

customers. As bookkeeping is one of the most important business skills, it is essential for

micro-entrepreneurs to practice it.

The importance of availability of accurate financial information to owners and

managers for measuring of performance cannot be over emphasized (Amoako et al., 2014) as

it enables entrepreneurs to provide accurate and timely financial reports that demonstrate the

progress and present state of an organization. This is in relation to the findings of Muhindo, et

al., (2014) that there is a positive relationship between the accounting information system and

profitability level of small-scale businesses and Mutua (2015) that there is a strong relationship

between business performance and the level of training in business management, especially in

business finance record keeping. Where accounting information plays an important role in

facilitating the decision-making process of the management.

 51

Theoretical Framework

Administrative Theory

The administrative theory of management is focused on principles that could be used

by managers to coordinate the internal activities of organizations. As proposed by Henri Fayol,

the main focus of this theory is on how the management of the organization is structured and

how well the individuals therein are organized to accomplish the tasks given to them. The

administrative theory focuses on improving the efficiency of management first so that the

processes can be standardized and then moves to the operational level where the individual

workers are made to learn the changes and implement those in the respective routine jobs.

According to Fayol, the business operations of an organization could be divided into

six broad activities. (1) Technical, which pertains to producing and manufacturing products.

(2) Commercial, that includes the buying, selling and exchange of goods. (3) Financial, which

is in pursuit of the optimal use of capital. (4) Security, the protection of employees and

property. (5) Accounting, which includes the recording and taking stock of costs, profits,

liabilities, maintaining balance sheets and compiling statistics. (6) Managerial, which includes

planning, organizing, commanding, coordinating and controlling.

 52

Figure 1

Fayol’s Administrative Management Model

Source: Technofunc (2020)

Quantitative Theory of Management

This theory is concerned with applying quantitative management tools focusing on

decision making, economic effectiveness, mathematical models, and the use of computers. The

three main branches of quantitative approach include: Management Science, Operations

Management and Management Information Systems (Gareth et al, 2004).

Management Science

This approach stresses the use of mathematical models and statistical methods

for decision making. Management science techniques are widely used in capital

budgeting, cash flow management, production scheduling, developing product

strategies, human resource planning and inventory optimization.

Operations Management

It is an applied form of management science but somewhat less mathematical

and statistically sophisticated and can be applied more directly to managerial situations.

In operations management, operations manager makes use of quantitative techniques

 53

like forecasting, inventory analysis, quality control methods and techniques.

Operations management is primarily used in inventory management, work scheduling,

production planning, facilities location and design and quality assurance.

Management Information Systems (MIS)

It is an information system that helps managers by providing information about

events occurring internally and externally. Management Information Systems (MIS) is

capable of providing timely and appropriate information allowing managers to make

effective information-based decisions.

Conceptual Framework

Figure 2
Conceptual Framework

d
Bookkeeping Practices

Recording

Financial Statement
Preparation
Overall Management
of Business
Monitoring of Business
Finances

Filing of Taxes

Demographic Profile
• Type of Business
• No. of Years in Operation
• Scope of Clients
 54

The variables consist of the bookkeeping practices, demographic profile, and

management of business. The independent variable, bookkeeping practices which includes the

recording, financial statement preparation, monitoring of business finances and filing of taxes

describes the level of bookkeeping practices employed in the online business. The dependent

variable, overall management of business which includes the planning, organizing and

controlling function as indicators. The moderating variable, demographic profile of the online

business which includes the type of business, number of years in operation and scope of clients.

The framework starts with the bookkeeping practices employed by the online sellers

which includes recording, financial statement preparation, monitoring of business finances and

filing of taxes. The framework also includes the demographic profile of the online business

which pertains to the type of business, number of years in operation and scope of clients as the

moderating variable. Both bookkeeping practices and demographic profile points to the overall

management of business that encompasses the planning, controlling and organizing. The arrow

signifies the relationship or influence of bookkeeping practices and demographic profile of the

online business to the overall management of the business.

The framework is formulated based on the theories related to management and

accounting. This includes the Administrative Theory of Henry Fayol which is focused on

principles that could be used by managers to coordinate the internal activities of organizations.

It includes activities like technical, commercial, financial, security, accounting and managerial

which speaks of the two variables in the study – bookkeeping practices and management of

business. The Quantitative Theory of Management is also used in developing the framework.

It is concerned with the quantitative tools and techniques that can be used by managers in

inventory management, work scheduling, production planning, facilities location and design
 55

and quality assurance. The mentioned frameworks are used in discussing the provided

indicators of the variables found the in the conceptual framework. It serves as a guiding

principle in finding relevant literature to support the study.

Statement of the Problem

This study aims to understand the influence of bookkeeping practices to the overall

management of business of online sellers. The study also aims to determine if the demographic

profile has a moderating effect on the relation of the bookkeeping practice and overall

management of business. Specifically, the study seeks to answer the following questions:

1. What is the demographic profile of the online sellers in terms of:

a. Type of Business

b. No. of Years in Operation

c. Scope of Clients

2. What is the level of bookkeeping practices employed in terms of:

a. Recording

b. Financial Statement Preparation

c. Monitoring of Business Finances

d. Filing of Taxes

3. What is the level of online sellers management of business in terms of:

a. Planning

b. Organizing

c. Controlling

4. Is there a significant relationship between the bookkeeping practices with overall

management of the online business?

 56

5. Which among the bookkeeping practices influence the overall management of

business of online sellers?

6. Does the demographic profile of the online sellers have a moderating effect on the

bookkeeping practices and the overall management of business of online sellers?

Hypothesis

Ho1: There is no significant relationship between bookkeeping practices (recording,

financial statement preparation, monitoring of business finances, and filing of taxes)

and overall management of online business

Ho2: The bookkeeping practices (recording, financial statement preparation,

monitoring of business finances, and filing of taxes) cannot influence the overall

management of the business of online sellers

Ho3: The demographic profile (type of business, number of years in operation, and

scope of clients) of the online sellers does not have a moderating effect on the

bookkeeping practices (recording, financial statement preparation, monitoring of

business finances, and filing of taxes) and overall management of business of online

sellers

Significance of the Study

The findings of this study will be beneficial to the following:

Online Sellers. Findings of the study will be used to improve the overall management

of online sellers through the use of bookkeeping. This will enable them to understand the

importance of bookkeeping and its relationship with overall management. The study could also

bring awareness on the benefits of being duly registered with the Bureau of Internal Revenue.
 57

Customers. The findings of the study will provide development of the management of

online business. Thus, through the study, the customers satisfaction with online shopping

experience can be increased due to the developed and efficient manner of online business

management.

Bookkeepers. Through the study, the hiring of the bookkeepers or outsourcing of the

bookkeeping services can be promoted as a practice of the online sellers to properly manage

the finances and tax obligations of the online business.

Business Permits and Licensing Office. The study can be used in regulating the entry,

registration, and operations of the online business in the respective local communities in South

Cotabato.

Bureau of Internal Revenue. The study can be used in regulating the registration with

the BIR, tax concerns, and tax collection from the online sellers.

Department of Trade and Industry and Local Government Units. The study will

provide insights as to the status of the online business and help business registration and in

crafting intervention programs that will promote growth and stability among online businesses

in South Cotabato.

The Business Students and the Academe. The study will provide insights on the

relevant concepts of bookkeeping and management utilized in the online business set up. This

will also benefit them in understanding the concepts pertaining to online business.

Future Researchers. This study can be used as a future reference for student

researchers interested in studying similar topics and methods as this research. It may give

insight to future researchers in areas of bookkeeping, management and online business.

 58

Scope and Limitation

The conceptual scope of the study is focused and limited on the bookkeeping practices

that influence the overall management of business of online sellers. The study was limited

within the geographical area of the South Cotabato province. The respondents of the study

included only the owner or managers of online business in which bulk or most of business

transactions are performed online and, if applicable, with physical store used for pick-up of

products.

The formulated questionnaire is limited in understanding the demographic profile of

the online seller, and level of bookkeeping practices and management employed in the online

business. Lastly, the current COVID-19 pandemic was another limiting factor as the

researchers are unable to physically gather data due to the risk of being infected by the virus.

The researchers utilized google forms for the survey questionnaire that was be sent

electronically through different online platforms.

After two weeks of data gathering and sending of the electronic copy of the survey

questionnaires to a sufficient number of online sellers in South Cotabato to meet the target

sample size of 385 online sellers, only 213 responses was retrieved that represents to a 55.32%

response rate. Though the researchers have exhausted the limited time and tried different ways

in inviting respondents to participate, most are unresponsive in the direct messages and emails,

and even in the comment sections of the online seller’s business accounts or pages. Some, also

declined to participate in the study. Moreover, one reason for the unresponsiveness of the

online sellers is that most are not full-time online sellers, some are students, working

professionals, and have other work engagements. Hence, limiting online seller’s capacity to
 59

participate in the study. Thus, only the 213 retrieved responses within the timeframe were

utilized as the sample size of the study.

Green (1991) and similar to Harris (1985) discussed a rule of thumb for the minimum

acceptable sample size in a regression model, in testing the overall model, he recommended a

minimum sample size of 50 + 8k (where k is the number of predictors). In the study there are

4 predictor or independent variable under the bookkeeping practice, the acceptable sample size

would be 82 [50 + 8(4)]. Also, Hair et al. (2014) discussed in the book, Multivariate Analysis,

that 10:1 ratio is desirable in a regression model. Hence, the 213-sample size in the study is

acceptable to proceed with the process of multiple regression analysis.

Random or probability sampling should be used to select respondents because it

reduces bias and allows results to be extended to the entire sampling population (Godambe

1982, Smith 1983, Snedecor 1939, Topp et al. 2004). However, this is not always feasible

because missing data invalidates random samples statistical inference (Godambe 1982). With

this, another limitation of the study was the use of non-probabilistic technique in identifying

the respondents of the study through the use of purposive and snowball sampling. This is

common because not everyone wants to participate and may be unavailable during

sampling requiring to find a new set of respondents (Alexiades 1996). When a sample is

representative, purposive sampling data, may still be valid since it gains validity across the

domain it represents, providing external validity (Lopez et al. 1997, Seidler 1974, Smith 1983,

Zelditch 1962). Non-probability methods improve internal validity more than external

validity (Bernard 2002, Godambe 1982, Snedecor 1939). However, purposive sampling limits

the interpretation of results to the population under study (Bernard 2002), as supported

by Lincoln and Guba (1985), where researchers proceed to select participants from that
 60

population, with the goal of selecting a sample that is representative of the population.

Hence, quantitative researchers would do better at achieving representative samples for the

statistical generalizability model if it had a more purposive approach which is, if explicitly

added to correspond more closely to population parameters as cited by Shadish et al. (2002).

Definition of Terms

Bookkeeping – refers to the process of keeping track of every financial transaction

made by a business firm from the opening of the firm to the closing of the firm.

Management – refers to the activities that involve planning, organizing, and

controlling.

Online Business – refers to any kind of business or commercial transaction that

includes sharing information across the internet.

Online Sellers – refers an individual or other entity who offers a good or service

through the use of internet for business or commercial transaction. Operationally defined as

any online seller within the province of South Cotabato in which bulk or most of the business

transactions are performed online and, if applicable, with physical store used for pick-up of

products.
 61

Method

This section presents the research design, locale of the study, sources of data,

population and sampling technique, respondents, research instrument, data gathering

procedures and data analysis.

Research Design

The descriptive-quantitative correlational design was be used in this study. It is a

method that attempts to collect quantifiable information for statistical analysis of the

population sample. The researchers utilized research questions that is descriptive in nature in

attempting to identify responses associated, or in correlation with a specific variable, regardless

of whether that variable was dependent, independent, or moderating (Creswell, 2014). In this

study, it includes the demographic profile, and the level of bookkeeping and management

practices employed in the online business.

Quantitative research methods involve careful planning, encompassing all aspects of

the study inclusive of research questioning, sampling, and data collection (Borrego, Douglas,

& Amelink, 2009). The quantitative analysis approach was used to identify the perceived

relationship between the independent – Bookkeeping Practices and dependent variable –

Overall Management (Creswell, 2005). Allison (1998) and Creswell (2003) believed that

quantitative research involves collecting numerical information that can be quantified and

statistically be tested to either reject or not reject the hypothesis. Nonexperimental Quantitative

research is descriptive in nature and does not allow manipulation of the independent variables

(Christensen et al., 2011).

Correlational research is appropriate when the intent is to measure variables without

providing the researcher the ability to control the specific responses (Neuman, 2013).
 62

Nonexperimental correlational studies could be practical when the researcher is attempting to

demonstrate the relationship between variables, and when there is a complete lack of ability to

influence or dictate the independent variables (Monette et al., 2014). This is in relation with

the objective of the study to determine if there is a significant relationship between the

bookkeeping practices and overall management.

The reason for descriptive-quantitative correlational design selection was based on the

necessity of hypothetical deduction and statistical analysis of data (Allwood, 2012), that the

research study demands. The findings from the descriptive- quantitative correlational study

design may reveal whether bookkeeping practices influence the overall management of online

business and whether the demographic profile – type of business, number of years in operation

and scope of clients, moderates the effect of bookkeeping practices on the overall management

of business.

Locale of the Study

The study was conducted in the municipalities and city within the province of South

Cotabato. The province is a key player and one of the country’s fastest growing development

clusters known as SOCCSKSARGEN. The province has a total land area of about 3,706 square

kilometers. It is divided into two (2) Districts. District I, which includes the Municipalities of

Tampakan, Tupi and Polomolok. District II, which includes Municipalities of Banga, Surallah,

Sto. Niño, T’boli, Lake Sebu, Tantangan, and Norala, and City of Koronadal as the capital of

the province.

The province, specifically City of Koronadal, houses the different regional offices.

South Cotabato became the one of the most progressive and competitive provinces in the

Philippines, surpassing other provinces in almost every aspect of development. The strong
 63

human synergy and the rich resources of the province that is conducive for business and trade

are the very reason the study was conducted in the area. Moreover, the researchers are also

residing within the provincial scope that allows them to have a first-hand experience of the

dynamic business and trade operations.

Figure 3

Map of South Cotabato

Source: https://en.wikipedia.org/wiki/South_Cotabato

Sources of Data

The study used both primary and secondary sources of data. These two sources helped

the researchers in attempting to assess the bookkeeping practices that influence the overall

management of business of online sellers in South Cotabato. The primary data provided the

first-hand evidence while the secondary sources provided the second-hand information and

commentary from other research studies.

 64

The primary data was collected through survey-questionnaires and covered the

demographic profile of the respondents, level of bookkeeping method employed, and level of

online seller’s management of business.

The collected secondary data covered the previous studies conducted with the same

variables and articles that discuss the concepts and theoretical connection between the

dependent and independent variables.

Population and Sampling Technique

The target population of the study are the online sellers in the province of South

Cotabato. The respondents of the study included only the owner or managers of online business

in which bulk or most of the business transactions are performed online and, if applicable, with

physical store that is used for pick-up of products.

In calculating for the sample size of the study, the researchers used Cochran’s Sample

Size Formula. Cochran’s formula is considered especially appropriate in situations with large

populations, and is recommended to be used for studies with infinite populations (Cochran,

1977). In this study, the researchers utilized the 95% confidence level, ±5% precision level

and 0.5 maximum variability, assuming that the population is large. Thus, the sample size in

this study is 385 online sellers. However, after conducting the data gathering, only 213

responses were retrieved and used in the study. This represents a 55.32% response rate.

For the sampling technique, the study utilized a purposive sampling. It is process in

which subjects are selected by the researcher to meet a specific purpose. The purposive

sampling technique is a type of non-probability sampling that is most effective when one needs

to study a certain cultural domain with knowledgeable experts within. Choosing the purposive

sample is fundamental to the quality of data gathered; thus, reliability and competence of the
 65

informant must be ensured (Tongco, M. D., 2007). The purposive sampling technique is a

deliberate choice of a participant due to the qualities the participant possesses. The researcher

decides what need to be known and sets out to find people who can and are willing to provide

the information by virtue of knowledge or experience (Bernard, H. R., 2002).

Snowball or chain-referral sampling method was also used in conducting the study,

wherein the respondents are asked to assist the researchers in identifying other potential

respondents. This method is acceptable provided that the topic is not sensitive or personal. This

sampling method involves a primary data source nominating other potential data source that

will be able to participate in the research studies until the researchers has enough data to

analyze and draw conclusions.

Respondents

The study involved the online sellers or owner/manager of online businesses in the

province of South Cotabato. In selecting the respondents, the researchers had set a criterion for

the study to follow. The respondents of the study were limited to the online seller or

owner/manager of online business in which bulk or most of the business transactions are

performed online and, if applicable, with physical store used for pick-up of products. These

respondents were identified through the use different online platforms that allows the conduct

of business and trade. This includes, but is not limited to, the Facebook Marketplace and Online

Business Group Pages, Instagram, and DTI and Business Blogs in South Cotabato.

The tables presented below describes the respondents of the study in terms of the online

seller’s current business set-up, business location, and service or products offered.
 66

Table 1

Current Business Set-up of the Online Sellers

Business Set up Frequency Percentage

Online Transaction with Physical Store 147 69%
Purely Online Transaction 66 31%
Total 213 100%

Table 1 indicates that majority of the online sellers in South Cotabato operates through

the use of online business transactions and with physical store, used for the pickup of products

with a frequency of 147 or 69% of the total population of the study.

Table 2

Business Location of the Online Sellers

Location Frequency Percentage

Koronadal 117 54.90%
Banga 17 8%
Surallah 17 8%
Tantangan 12 5.60%
Norala 9 4.20%
Polomolok 9 4.20%
Tupi 8 3.80%
Tampakan 7 3.30%
Sto. Niño 6 2.80%
T’boli 6 2.80%
Lake Sebu 5 2.30%
Total 213 100%

The table shown above depicts that most of the online seller respondents of the study

are located in the City of Koronadal with the frequency count of 117 (54.90%). While, Lake
 67

Sebu had the least number of online seller respondents of the study with the frequency count

of 5, representing a 2.30% of the entire population of the study.

Table 3

Service or Products Offered by the Online Seller

Service or Product Offered Frequency Percentage

Clothing Apparel 87 40.8%
Food Products 21 9.9%
Health Care and Beauty Products 20 9.4%
Assorted Items 18 8.5%
Cakes and Pastries 15 7.0%
Ladies Accessories 10 4.7%
Home Appliances 8 3.8%
Service Assistance 8 3.8%
Flowers and Floral Arrangement 7 3.3%
Party Needs 4 1.9%
KPOP Merchandise 3 1.4%
Motor Parts and Accessories 3 1.4%
Bags 2 0.9%
E-cigarettes 2 0.9%
Footwear 2 0.9%
Printing Services 1 0.5%
School and Office Supplies 1 0.5%
Second Hand Cars 1 0.5%
Total 213 100%

With the services or products offered by the online sellers in South Cotabato, Clothing

Apparel is mostly offered with a frequency count of 87 (40.8%) and the least offered by the

covered online sellers in the study are the printing services, school and office supplies, and

second-hand cars.
 68

Research Instrument

The study utilized a self-developed survey questionnaire, that was administered online

and served as a primary source of data that covered the following, (1) The demographic profile

which seeks to determine the type of business, number of years in operation, and scope of

clients of the online sellers. (2) The level of bookkeeping practices employed that includes

items pertaining to the business’ recording, financial statement preparation, monitoring of

business finances, and filing of taxes. (3) The level of online seller’s management of business

in terms of planning, organizing, and controlling.

The researchers used a checklist in determining the demographic profile of the

respondents. A 5-point Likert Scale was used in assessing the level of bookkeeping practices

employed and the level of online seller’s management of business. The respondents chose from

a 5-point frequency scale, (5) Always, (4) Often, (3) Sometimes, (2) Rarely, and (1) Never. A

5-point Likert Scale is commonly used to increase the response rate and response quality along

with reducing the respondents’ “frustration level” (Babakus and Mangold 1992).

With the current threat of the COVID-19 pandemic, the researchers utilized the

different online platforms such as Facebook Messenger, Instagram, Email and/or Google

Forms as a substitute to the traditional pen and paper set up. This helped in minimizing the

cost of conducting the study and promoted the pursuit of safety and precautionary measures

against COVID-19 for the researchers and the respondents.

The self-developed survey-questionnaire was subjected to pre-testing and validation of

the research adviser and panel to ensure the appropriateness of the questionnaire in attaining

the objectives of the study.

 69

Pre-test Reliability Test using Cronbach Alpha

The study utilized Cronbach Alpha to test the internal consistency and enhance the

reliability of the survey questionnaire. Cronbach Alpha was used in pilot testing of the 10

respondents to determine the scale of reliability of the questionnaire and reduce the ambiguity,

making sure that the questionnaire is understandable and user-friendly.

The pilot study was conducted by administering the same questionnaire to the 10

respondents to ensure the consistency of responses and reliability of the questions in the

questionnaire.

Table 4

Reliability Statistics for Pre-test

Reliability Statistics
Cronbach's Alpha Cronbach's Alpha Based N of Items
on Standardized Items

.924 .907 35

The researchers conducted a pilot testing of the survey questionnaire that was

composed of 10 online sellers located within the province of South Cotabato.

Cronbach’s Alpha of 0.8 or above is regarded as highly acceptable for assuming

homogeneity of items, while 0.7 is the limit of acceptability. As there are different reports

about the acceptable values of alpha, ranging from 0.70 to 0.95 (Nunnally J, Bernstein L, 1994

and DeVellis R., 2003), the table shown above displays the 0.924 Cronbach’s Alpha of the

study, from a 35-item survey questionnaire. Therefore, the pilot testing of the survey

questionnaire showed a reliable and regarded as a highly acceptable result.

 70

Post Hoc Reliability Test using Cronbach Alpha

Table 5

Reliability Statistics for Post Hoc Test

Reliability Statistics
Cronbach's Alpha Cronbach's Alpha Based N of Items
on Standardized Items

.949 .953 35

A post hoc reliability test was also conducted after the conduct of the survey which was

answered by 213 online seller respondents. The table shown above displays the 0.949

Cronbach’s Alpha of the study, from a 35-item survey questionnaire. Cronbach’s Alpha of 0.8

or above is regarded as highly acceptable for assuming homogeneity of items, while 0.7 is the

limit of acceptability. Therefore, the post hoc reliability testing of the survey questionnaire still

showed a reliable and regarded as a highly acceptable result.

Data Gathering Procedures

Due to the COVID-19 pandemic, the researchers conducted the study online through

the use of google forms as a substitute to the traditional pen and paper set up. It was distributed

through the different online/social media platforms. These platforms include Facebook

Messenger, Instagram and Email. The following was done in collecting the data from the

samples that was collected from the online sellers in South Cotabato.

The research adviser and the distinguished members of the panel was asked to validate

the self-developed survey questionnaire of the researchers. Afterwards, a pilot testing using

Cronbach’s Alpha was conducted on the 10 owner or manager of online business within South

Cotabato through the use of the google forms. This was done to measure and control the

reliability of the research data. After the highly acceptable results of the pilot testing using
 71

Cronbach’s Alpha, the researchers were given the clearance for data gathering that allowed to

formally start the data gathering process. After which, the researchers identified the

respondents of the study using the criteria for the respondents through the online platforms that

allows the conduct of business and trade such as, but not limited to, the Facebook Marketplace,

Online Business Group Pages, Instagram, and DTI and Business Blogs in South Cotabato, this

is to ensure that the respondents of the study are actual online sellers that are in operation.

Thus, making sure the reliability of the data gathered through the online survey. After

identifying the research respondents, the personal or business accounts that were used by the

online sellers in conducting the online business transactions were privately messaged to ask

for the permission to conduct the study through the permission narrative that includes an

explanation and purpose of the study. After the permission was granted by the online seller,

the link of survey questionnaire was given as google forms was used as the medium in

conducting the data gathering as suppose to the traditional pen and paper set up, wherein the

respondents answered independently during their convenient time. The researchers,

afterwards, retrieved the data of the questionnaires once the respondents are done answering

the survey. In google forms, the responses automatically appear in the records of the

researchers right after the submission of the respondent. After the retrieval of data in the two-

week time frame for data gathering, the data was tallied and tabulated using the IBM SPSS

wherein the results were analyzed and interpreted to provide the implications of the study and

used to develop conclusions and recommendations of the study.

As to the limitations encountered during the data gathering procedure, the health

restrictions and time frame for data gathering were the limiting factors that the researchers

have foreseen. The communication between the researchers and the respondents were only
 72

made through the different online intermediaries in pursuit of the health safety of both the

researchers and respondents, all within the two-week data gathering time frame. Another

limiting factor that was encountered in the conduct of the data gathering was amount of

identified online sellers that were not responsive in the private messages for the permission to

conduct the study sent by the researchers.

Data Analysis

Table 6
Statistical Treatment

Statement of Problem Statistical Tool

1. What is the demographic profile of Online Sellers

in terms of: Central Tendency
a. Type of Business (Frequency)
b. Number of Years in Operation
c. Scope of Clients

2. What is the level of bookkeeping practices

employed in terms of:
a. Recording Central Tendency
b. Financial Statement Preparation (Mean)
c. Monitoring of Business Finances
d. Filing of Taxes

3. What is the level of Online Seller’s management

of business in terms of: Central Tendency
a. Planning (Mean)
b. Organizing
c. Controlling

4. Is there a significant relationship between the

bookkeeping practices and overall management Pearson R Correlation
of the online business?

5. Which among the bookkeeping practices

influence the overall management of business of Multiple Regression Analysis
online sellers?
 73

6. Does the demographic profile of the online sellers

have a moderating effect on the bookkeeping Hierarchical Regression
practices and the overall management of business Analysis/ Hayes PROCESS
of online sellers?

Central tendency frequency statistics was used to describe the demographic profile of

the respondents in the first statement of the problem. It includes the type of business, number

of years in operation and the scope of clients of the online sellers. This enabled the researchers

to observe the number of times an online seller belongs to the specific criteria provided by the

researchers.

For the second and third statement of the problem, central tendency (mean) was used

in determining the level of bookkeeping practices employed by the online seller and in the

level of online seller’s management of business. This was used in getting inferences as to

influence of bookkeeping practices to the overall management of online sellers.

Pearson R Correlation was used in assessing the relationship between a dependent

variable and several predictor variables in fourth statement of the problem. Multiple

Regression Analysis was used in identifying which bookkeeping practices influence the overall

management of business of online sellers indicated in the fifth statement of the problem

Hierarchical Regression Analysis / Hayes PROCESS was used in determining if the

demographic profile of the online sellers have a moderating effect on the bookkeeping

practices and overall management of business as presented in the sixth statement of the

problem.
 74

Survey Rating Scale and Data Interpretation

Table 7

Data Interpretation of the Level of Bookkeeping Practices Employed

Scale Mean Score Response Anchor Verbal Interpretation

5 4.21 – 5.00 Always Excellent Bookkeeping Practice

4 3.41 – 4.20 Often Good Bookkeeping Practice

3 2.61 – 3.40 Sometimes Average Bookkeeping Practice

2 1.81 – 2.60 Rarely Weak Bookkeeping Practice

1 1.00 – 1.80 Never Non-existence of Bookkeeping

Practice

Table 8

Data Interpretation of the Level of Online Sellers’ Management of Business

Scale Mean Score Response Anchor Verbal Interpretation

5 4.21 – 5.00 Always Excellent Management of

Business
4 3.41 – 4.20 Often Good Management of Business

3 2.61 – 3.40 Sometimes Average Management of

Business
2 1.81 – 2.60 Rarely Weak Management of
Business
1 1.00 – 1.80 Never Non-existence of Management
of Business
 75

Interpretation of the Correlation Output

Pearson R Correlation was used to determine the interrelationship among the

independent variables – recording. financial statement preparation, monitoring of business

finances, and filing of taxes, and the dependent variable – overall management. In describing

the strength of the relationship of each variable, the table of correlations interpretation below

as suggested by Hair et al. (2014) was utilized.

Table 9

Interpretation of Correlation Coefficient

Range of Coefficient
Description of Strength
From To
± 0.81 ± 1.00 Very Strong
± 0.61 ± 0.80 Strong
± 0.41 ± 0.60 Moderate
± 0.21 ± 0.40 Weak
± 0.00 ± 0.20 Weak to No Correlation
Source: Hair et al. (2014)

Ethical Consideration

There are various codes of ethical conduct that standardize the actions of researchers.

According to American Psychological Association (APA), ethical norms include issues such

as requirements for honesty, requirements for informed consent, anonymization and storage of

data, the right of access to data for participants and duty of confidentiality for all those who

undertake research. In the book of Business Research Methods by Bryman and Bell (2007),

the following are the ten essential principles of ethical considerations in dissertations. First,

the participants who participated in the research should not be subjected to any form of harm.

Second, the dignity of the participants who participated in the research should be a top priority
 76

of the researchers. Third, before the study, the researchers should acquire permission from the

participants who will participate in the research. Fourth, it is necessary to ensure that the

participants' privacy who participated in the research is protected. Fifth, the confidentiality of

the study data should be guaranteed to an adequate level. Sixth, the anonymity of the

participants who will participate in the research should be maintained. Seventh, there must be

no misrepresentation or exaggeration regarding the research's goals and objectives. Eighth,

when there are affiliations, funding sources, and conflicts of interest, it should be all disclosed.

Ninth, any research-related communication should be undertaken with honesty and

transparency. Lastly, any misinformation, as well as distorted presentation of main data results,

must be avoided.

The researchers kept an eye on all of the ethical considerations mentioned above. With

that in mind, the researchers privately recognized its respondents' security in obtaining the data

in the survey responses. In addition, the researchers always respected the privacy and

confidentiality of the respondents. This is in relation to the Republic Act No. 10173, also

known as the Data Privacy Act of 2012, where the researchers made sure that the respondents

would remain anonymous. Moreover, only the researchers have access to the data and survey

questionnaires answered by the respondents.

In presenting the gathered data from the respondents, the researchers made sure that all

data was be disclosed and presented with honesty and objectivity. Also, the researchers

strongly adhered to follow ethical guidelines to avoid data falsification problems. This is in

pursuit of encouraging the presentation of knowledge and facts, which is the primary purpose

of research (Palaskar, 2019).

 77

Results

This section presents the results of the data gathered based on the primary source. This

includes the results presented through a table and its respective narrative report.

Demographic Profile

Table 10

Frequency Distribution of the Type of Business of the Online Sellers

Type of Business Frequency Percentage

Merchandising 137 64.3%

Service 50 23.5%

Manufacturing 26 12.2%
Total 213 100%

In table 10, the distribution of the respondents based on the type of business is shown.

137 respondents or 64.3% are under the merchandising business, 50 respondents or 23.5% in

the service business, and 26 respondents or 12.2% are in the manufacturing business.

Table 11
Frequency Distribution of the Number of Years in Operation of the Online Sellers

Number of Years in Operation Frequency Percentage

Less than a year 87 40.8%

1-3 years 85 39.9%

More than 3 years but less than 6 years 29 13.6%

More than 6 years but less than 10 years 7 3.3%

More than 10 years 5 2.3%

Total 213 100%

 78

When it comes to the number of years in operation (see table 11), the online sellers that

is operation for less than a year is more frequent as represented by the 40.8% of the entire

population of the study. While, online sellers that had been operating for more than 10 years

are the least frequent, regarded by the lowest percentage of 2.3%.

Table 12

Frequency Distribution of the Scope of Clients of the Online Sellers

Scope of Clients Frequency Percentage

Within and Outside South Cotabato 127 59.6%

Within South Cotabato only 84 39.4%

Outside South Cotabato only 2 0.9%

Total 213 100%

As shown in table 12, the online sellers with clients within and outside South Cotabato

had the highest frequency count of 127, represented by the 59.6% of the population of the

study. While, clients outside South Cotabato only had the lowest frequency count of 2.
 79

Level of Bookkeeping Practices Employed in The Online Business

The following tables present the level of bookkeeping practices employed in the online

business in terms of recording, financial statement preparation, monitoring of business

finances, and filing of taxes. Moreover, the overall level of the respective bookkeeping

practices is presented at the last part of the table.

Table 13

Descriptive Statistics of the Recording Practices of Online Sellers

Questions Mean Verbal Interpretation

I record all the receivables of my online 4.28 Excellent Recording Practice

business
I record all the payables of my online 4.28 Excellent Recording Practice
business

I record all the sales of my online 4.26 Excellent Recording Practice

business

I record all the purchases & expenses of 4.19 Good Recording Practice
my online business

I use journals or accounting books to 3.31 Average Recording Practice

record my transactions

Overall Level of Recording Practice 4.06 Good Recording Practice

In table 13, it shows that the recording practices employed by the online sellers,

specifically the recording of the receivables and payables are regarded as the highest indicator

or recording practices with both having a mean score of 4.28. On the other hand, the indicator

‘I use journals or accounting books to record my transactions’ had the lowest mean score of

3.31. Overall, the level of recording practice of the online sellers in South Cotabato garnered

a mean score of 4.06.

 80

Table 14

Descriptive Statistics of the Financial Statement Preparation Practices of Online Sellers

Questions Mean Verbal Interpretation

The end product of the financial 3.31 Average Financial

statements is fully utilized for the Statement Preparation
development of the business Practice

The financial statements are prepared 3.20 Average Financial

and used in decision making Statement Preparation
Practice

The financial statements are used to 3.19 Average Financial

analyze trends in business operations Statement Preparation
Practice

The financial statements (Income 2.85 Average Financial

Statement, Balance Sheet, Cash Flow) Statement Preparation
are prepared regularly Practice

The business hires someone to prepare 1.86 Weak Financial

the financial statements Statement Preparation
Practice
Overall Level of Financial Statement 2.88 Average Financial
Preparation Practice Statement Preparation
Practice

As to the financial statement preparation practices of the online sellers (see table 14),

the ‘The end product of the financial statements is fully utilized for the development of the

business’ had the highest mean score of 3.31. While, the indicator “business hires someone to

prepare the financial statements” resulted in having the lowest mean score of 1.86. Overall,

the level of financial statement preparation practice of the online seller respondents scored a

2.88 mean.
 81

Table 15

Descriptive Statistics of the Monitoring of Business Finances Practices of Online Sellers

Questions Mean Verbal Interpretation

I monitor my receivables regularly 4.37 Excellent Monitoring of

Business Finances
Practices
I keep my personal and business fund 4.34 Excellent Monitoring of
separate Business Finances
Practices
I monitor my payables regularly 4.32 Excellent Monitoring of
Business Finances
Practices
I regularly monitor the cash flow (income 4.27 Excellent Monitoring of
and expenses) and account balances Business Finances
(receivable and payable) of my online Practices
business
Additional funds needed for the business is 4.05 Good Monitoring of
easily identified Business Finances
Practices

Overall Level of Monitoring of Business 4.27 Excellent Monitoring of

Finances Practice Business Finances
Practices

When it comes to the monitoring of business finances (see table 15), the monitoring of

receivables regularly received the highest mean score of 4.37. While, the indicator ‘additional

funds needed for the business is easily identified’, resulted in 4.05 mean score that is the lowest

among the indicators of the practice of monitoring of business finances. Overall, the level of

monitoring of business finances practices of the online sellers in South Cotabato has a mean

score of 4.27.
 82

Table 16

Descriptive Statistics of the Filing of Taxes Practice of Online Sellers

Questions Mean Verbal Interpretation

I acknowledge my tax obligations 2.28 Weak Filing of Taxes

Practices
I monitor my tax returns filing 2.00 Weak Filing of Taxes
Practices
I make sure that I pay my taxes on time 2.00 Weak Filing of Taxes
Practices
I comply with BIRs tax mandate 1.97 Weak Filing of Taxes
• BIR RMC No. 60-2020 ‘Obligations of Practices
Persons Conducting Business
Transactions Through Any Forms of
Electronic Media, and Notice to
Unregistered Businesses’
*BIR RMC No. 55-2013 ‘Reiterating
Taxpayers' Obligations in Relation to Online
Business Transactions’
The business is registered in BIR 1.94 Weak Filing of Taxes
Practices

Overall Level of Filing of Taxes 2.03 Weak Filing of Taxes

Practice Practices

Table 16 presents the level of tax filing practices of online sellers. Overall, the

mentioned bookkeeping practice only earned a mean score of 2.03. Where, the highest

indicator with a mean of 2.28 pertains to the online sellers’ acknowledgment of tax obligations

and the least mean score of 1.94 pertains to the indicator, ‘the business is registered in BIR’.
 83

Table 17

Descriptive Statistics of the Level of Bookkeeping Practices Employed

Bookkeeping Practices Mean Verbal Interpretation

Monitoring of Business Finances 4.27 Excellent Bookkeeping

Practice
Recording 4.06 Good Bookkeeping
Practice

Financial Statement Preparation 2.88 Average Bookkeeping

Practice

Filing of Taxes 2.03 Weak Bookkeeping

Practice

Overall Level of Bookkeeping Practice 3.31 Average Bookkeeping

Employed Practice

Table 17 presents the level of bookkeeping practices - recording, financial statement

preparation, monitoring of business finances, and filing of taxes, employed by the online

sellers in South Cotabato. With monitoring of business finances having the highest mean score

of 4.27 and filing of taxes with the least mean score of 2.03. Overall, the level of bookkeeping

practice employed by the online sellers in South Cotabato resulted to a mean score of 3.31.
 84

Level of Online Sellers’ Management of Business

The following tables present the level of online sellers’ management business in terms

of planning, organizing, and controlling Moreover, the overall level of the respective

management functions is presented at the last part of the table.

Table 18

Descriptive Statistics of the Planning Management of Online Sellers

Questions Mean Verbal Interpretation

I identify in advance what needs to be done 4.18 Good Planning of the

and the necessary resources to implement Business
the plan
I set goals and objectives, and create a 4.08 Good Planning of the
flexible action plan to achieve for my online Business
business
I make use of alternative course of action in 4.00 Good Planning of the
achieving the set goals and objectives Business

I craft strategies to gain competitive 3.92 Good Planning of the

advantage and lessen threats of competition Business

I forecast my target monthly sales quota 3.63 Good Planning of the

Business

Overall Level of Planning Management 3.96 Good Planning of the

Business

Presented in table 18 is the level of planning employed by the online sellers in the

online business. The indicator of the planning management, ‘I identify in advance what needs

to be done and the necessary resources to implement the plan’, earned the highest mean score

of 4.18 among all the indicators. While, the indicator of planning that pertains to the forecasting

of the target monthly sales quota had the lowest mean score of 3.63. Overall, the level of

planning management of the online sellers resulted to a mean score of 3.96.

 85

Table 19

Descriptive Statistics of the Organizing Management of Online Sellers

Questions Mean Verbal Interpretation

I make sure that every process is 4.35 Excellent Organizing of

coordinated the Business
I identify activities that needs to be 4.19 Good Organizing of the
performed Business

I properly allocate the resources across the 4.19 Good Organizing of the
business operation Business
I establish a business operation work 4.08 Good Organizing of the
process and structure to follow (from Business
receiving an order to packing and then
delivery)
I delegate tasks and responsibilities 3.88 Good Organizing of the
Business
Overall Level of Organizing 4.13 Good Organizing of the
Management Business

When it comes to the level of management organizing (see table 19), the indicator “I

make sure that every process is coordinated” had the highest mean score of 4.35 among the

indicators of the organizing function. While, the indicator ‘I delegate tasks and

responsibilities’ received the lowest mean score of 3.88. Overall, the organizing function of

management resulted to a mean score of 4.13.

 86

Table 20

Descriptive Statistics of the Controlling Management of Online Sellers

Questions Mean Verbal Interpretation

I make sure that tasks are accomplished 4.36 Excellent Controlling of

effectively and efficiently the Business
I make necessary adjustments in the 4.25 Excellent Controlling of
operations along the way the Business

I make use of corrective actions when 4.04 Good Controlling of the

necessary Business

I compare actual performance against 3.91 Good Controlling of the

standards Business

I establish performance/output standards 3.87 Good Controlling of the

Business

Overall Level of Controlling Management 4.08 Good Controlling of the

Business

For the results of the level of controlling function of management, table 20 is presented

above. Where the highest mean score of 4.36 pertains to the indicator ‘I make sure that tasks

are accomplished effectively and efficiently’. While, ‘I establish performance/output

standards’ resulted as the indicator of controlling management with the lowest mean score of

3.87. Overall, the controlling function of management resulted to a mean score of 4.08.
 87

Table 21

Descriptive Statistics of the Overall Level of Online Sellers’ Management of Business

Questions Mean Verbal Interpretation

Organizing 4.13 Good Management of

Business
Controlling 4.08 Good Management of
Business
Planning 3.96 Good Management of
Business
Overall Level of Online Sellers’ 4.06 Good Management of
Management of Business Business

Table 21 presents the level of online sellers’ management of business in South Cotabato

with the following indicators, planning, organizing, and controlling. Where, organizing

received the highest mean score of 4.13 and planning with the lowest mean score of 3.96.

overall, the level of management of the online sellers resulted to a 4.06 mean score.

The Relationship between the Independent Variables – Recording, Financial Statement

Preparation, Monitoring of Business Finances, and Filing of Taxes, and the Dependent

Variable – Overall Management

Table 22

Correlations of the Variables

Financial Monitoring Filing

Overall Statement of Business of
Management Recording Preparation Finances Taxes
Overall Pearson Correlation 1 .600** .542** .584** .265**
Management Sig. (2-tailed) .000 .000 .000 .000
N 213 213 213 213 213
**. Correlation is significant at the 0.01 level (2-tailed).
 88

The correlation coefficient suggests that recording (r = 0.600) has a strong positive

relationship with the overall management. While, financial statement preparation (r = 0.542)

and monitoring of business finances (r = 0.584) have a moderate positive relationship with the

overall management. Lastly, filing of taxes (r = 0.265) has a weak positive relationship with

the overall management. Moreover, all the variables included in the study are below the

threshold of significance of 0.05. This indicates that the bookkeeping practices (recording.

financial statement preparation, monitoring of business finances, and filing of taxes) have a

statistically significant relationship with the overall management of business of online sellers.

Assumptions for Multiple Regression Analysis

In performing the analysis, multiple regression was used to test the relationship

between the independent variable, bookkeeping practices of recording, financial statement

preparation, monitoring of business finances, and filing of taxes and the dependent variable,

overall management. However, the assumptions in multiple regression analysis: normality test,

collinearity, heteroscedasticity, and sufficiency of observation was conducted to determine if

the data of the study are fit for the multiple regression analysis.

Normality Test

Table 23

Test of Normality

Kolmogorov-Smirnova Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
Standardized .057 213 .091 .985 213 .027
Residual
a. Lilliefors Significance Correction
 89

The test of normality of bookkeeping practices and overall management is presented in

the table above, the Kolmogorov-Smirnov and Shapiro-Wilk test on the standardized results.

For the data to be normally distributed the p value should be greater than 0.05. On larger sample

size (n ≥50), Kolmogorov–Smirnov test is used to determine the normality of the data (Mishra,

P., Pandey, C. M., Singh, U., Gupta, A., Sahu, C., & Keshri, A., 2019). Hence, in the case of

this study, the p value is greater than the threshold of significance of 0.05 showing that the data

for this study is normally distributed and the normality assumption is not violated.

Figure 4

Normal P-Plot of Regression Standardized Residual

In addition, the normal probability plot of the standardized residuals can also be used

to evaluate the assumption that the residuals are normally distributed. The normal probability

plot of the residuals should approximately follow a straight line. In the figure above, it shows

that normal probability plot of the residuals is approximately linear supporting the condition

that the error terms are normally distributed.

 90

Collinearity Test

Table 24

Collinearity Statistics

Unstandardized Standardized Collinearity

Coefficients Coefficients Correlations Statistics
Std. Zero-
Model B Error Beta t Sig. order Partial Part Tolerance VIF
1 (Constant) 2.103 .184 11.455 .000

Recording .482 .044 .600 10.901 .000 .600 .600 .600 1.000 1.000

2 (Constant) 1.478 .211 7.006 .000

Recording .310 .053 .386 5.824 .000 .600 .373 .303 .614 1.629

Monitoring .310 .060 .345 5.196 .000 .584 .338 .270 .614 1.629
of Business
Finances
3 (Constant) 1.641 .207 7.932 .000

Recording .203 .057 .252 3.525 .001 .600 .237 .176 .490 2.042

Monitoring .285 .058 .317 4.939 .000 .584 .323 .247 .608 1.646
of Business
Finances
Financial .132 .032 .258 4.168 .000 .542 .277 .209 .651 1.536
Statement
Preparation
a. Dependent Variable: Overall Management

On the collinearity test, table 24, collinearity statistics of bookkeeping practices showed

that there are no VIF values greater than 5 for model 3 that indicate a strong presence of

collinearity. The highest VIF for model 3 is 2.042. Thus, there is no multicollinearity issue for

model 3.
 91

Homoscedasticity Test

Figure 5

Scatterplot Result of the Homoscedasticity Test

On Homoscedasticity Test, the ZPRED (X) and ZRESID (Y) were measured on the

scatterplot to test the presence of a pattern in a graph. The graph does not show the presence

of a pattern, thus all the relevant variables in model 3 are part of the model.

Sufficiency of Observations

Multiple Regression Analysis is applied to test the explanatory and predictive power of

the different independent variables – recording, financial statement preparation, monitoring

of business finances, and filing of taxes, to the dependent variable – overall management.

Moderation analysis was also applied in this study with the moderating variables – type of

business, number of years in operation, and scope of clients

On the sufficient number of observation test, the ideal ratio is at least 10 observations

per parameter or variable, dependent, independent, and moderating variables. In this study, the
 92

number of parameters or variable is 8 multiplied to the number of observations of 10, resulting

to 80, the study must have at least 80 samples to pass the sufficiency of observation test. In

actual, the study utilized a total of 213 sample size that is considered more than sufficient than

the 80-sample size requirement.

Bookkeeping Practices (Recording, Financial Statement Preparation, Monitoring of

Business Finances, and Filing of Taxes) that influence the Overall Management of

Business of Online Sellers

The hypothesis tests if the bookkeeping practices (recording, financial statement

preparation, monitoring of business finances, and filing of taxes) carry a significant influence

overall management of business of online sellers. The dependent variable, overall

management, was regressed on the independent variables to test the hypothesis, Ho2.

Table 25

Model Summary

Std. Change Statistics

Error of
R Adjusted the R Square F Sig. F Durbin-
Model R Square R Square Estimate Change Change df1 df2 Change Watson
1 .600a .360 .357 .54654 .360 118.829 1 211 .000
2 .658b .433 .428 .51569 .073 26.997 1 210 .000
3 .690c .477 .469 .49669 .043 17.371 1 209 .000 1.772
a. Predictors: (Constant), Recording
b. Predictors: (Constant), Recording, Monitoring of Business Finances
c. Predictors: (Constant), Recording, Monitoring of Business Finances, Financial Statement
Preparation
d. Dependent Variable: Overall Management

The model summary illustrates that under model 3, the R (multiple correlation

coefficient) value measures the quality of the prediction of the dependent variable. Hence, the

R value of 0.690 in this model indicates that there is strong level of influence based on the
 93

table of correlations interpretation by Hair et. al (2014) presented in table. The R2 (coefficient

of determination) of 0.477 depicts that the model explains 47.7% of the variance in the

dependent variable, overall management is explained by the three statistically significant (p <

0.01) independent variables – recording, financial statement preparation, and monitoring of

business finances.

Table 26

ANOVA

Model Sum of Squares df Mean Square F Sig.

1 Regression 35.494 1 35.494 118.829 .000b
Residual 63.026 211 .299
Total 98.520 212
2 Regression 42.674 2 21.337 80.233 .000c
Residual 55.847 210 .266
Total 98.520 212
3 Regression 46.959 3 15.653 63.449 .000d
Residual 51.561 209 .247
Total 98.520 212
a. Dependent Variable: Overall Management
b. Predictors: (Constant), Recording
c. Predictors: (Constant), Recording, Monitoring of Business Finances
d. Predictors: (Constant), Recording, Monitoring of Business Finances, Financial Statement
Preparation

The ANOVA table is used in determining the overall significance of the model

generated by the multiple regression analysis. Overall, model 3, shows a statistically significant

model with F (3, 209) = 63.449 and with p-value of < 0.01 with the inclusion of the significant

predictors (recording, monitoring of business finances, and financial statement preparation)

of overall management.
 94

Table 27

Coefficients

Unstandardized Standardized Collinearity

Coefficients Coefficients Correlations Statistics
Std. Zero-
Model B Error Beta t Sig. order Partial Part Tolerance VIF
1 (Constant) 2.103 .184 11.455 .000

Recording .482 .044 .600 10.901 .000 .600 .600 .600 1.000 1.000

2 (Constant) 1.478 .211 7.006 .000

Recording .310 .053 .386 5.824 .000 .600 .373 .303 .614 1.629

Monitoring .310 .060 .345 5.196 .000 .584 .338 .270 .614 1.629
of Business
Finances
3 (Constant) 1.641 .207 7.932 .000

Recording .203 .057 .252 3.525 .001 .600 .237 .176 .490 2.042

Monitoring .285 .058 .317 4.939 .000 .584 .323 .247 .608 1.646
of Business
Finances
Financial .132 .032 .258 4.168 .000 .542 .277 .209 .651 1.536
Statement
Preparation
a. Dependent Variable: Overall Management

The results of the standardized beta coefficients under model 3 indicated that

monitoring of business finances is the strongest predictor with β = 0.317 and p-value < 0.01.

The financial statement preparation with β = 0.258 and p-value < 0.01, and recording with β =

0.252 and p-value < 0.05 also showed a significant contribution in influencing the overall

management.
 95

Regression Model Equation:

Overall Management = 1.641 + 0.203 (REC) + 0.132 (FSPrep) + 0.285 (MBFIN) + error

Overall Management = 1.641 + 0.203 (4.06) + 0.132 (2.88) + 0.285 (4.27) + 0.05

Overall Management = 3.899

In creating the MRA equation, the unstandardized beta coefficient was utilized. The

equation is used in predicting the overall management of the online sellers based on the

regression coefficient value of the independent variables and its respective mean value (see

table 17). The figures indicated in the regression model equation above explains that for every

unit increase in the recording by 0.203, monitoring of business finances by 0.285, and financial

statement preparation by 0.132, the overall management would increase by 1.641.

Split Validation

The result of the main sample was validated through split samples using the same

multiple regression method to obtain unbiased estimates and check on the accuracy on the

prediction. The main sample of 213 were divided into two random samples, where split one

had 103 samples and split two had 110 samples. The split one had an 45.1% of variance that

is relatively lower than the main sample. While, the split two had a variance of 50.3% that is

higher than the main sample. However, in split sample 2, only two independent variables:

financial statement preparation and monitoring of business finances were significant in

influencing the dependent variable, overall management.

The data in the split validation table have a slight difference from the main sample,

through an addition of another independent variable that is not significant on split sample 2.

However, despite this slight difference, the data can still be generalized throughout the

population.
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Table 28

Comparison of Main Sample with Split Samples

Model Component Main Sample Split Sample 1 Split Sample 2

n = 213 n = 103 n = 110
Model Fit
R2 0.477 0.451 0.503
Adjusted R2 0.469 0.434 0.494
Std. error of estimate 0.49669 0.51694 0.48341
Independent Variables
Recording Significant Significant Not Significant
Financial Statement Significant Significant Significant
Preparation
Monitoring of Business Significant Significant Significant
Finances
Filing of Taxes Not Significant Not Significant Not Significant

Moderating Effect of the Demographic Profile (Type of Business, Number of Years in

Operation, and Scope of Clients) on the Relationship of Bookkeeping Practices (Recording,

Financial Statement Preparation, Monitoring of Business Finances, and Filing of Taxes)

and Overall Management of Business of Online Sellers

To investigate the hypothesis Ho3, a simple moderation analysis was performed using

the PROCESS v4.0 by Andrew F. Hayes. The outcome variable is the overall management.

Only the significant influencing variables were included in the analysis, this includes

bookkeeping practices of recording, financial statement preparation, and monitoring of

business finances.
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Recording and Overall Management

Table 29

Moderating Effect of Type of Business and Number of Years in Operation on Recording and
Overall Management
R R-sq MSE F df1 df2 p
0.6518 0.4248 0.2848 11.3066 13.0000 199.0000 0.0000
Test(s) of highest order unconditional interaction(s)
R2-chng F df1 df2 p
X*W 0.0178 3.0824 2.0000 199.0000 0.0480
X*Z 0.0075 0.6477 4.0000 199.0000 0.6291
Focal Predict: Recording (X)
Mod Var: Type of Business (W)
Mod Var: Number of Years in Operation (Z)

In the test of unconditional interaction. It shows that the R2 significantly changes (p =

0.0480) by 0.0178 with the inclusion of the interaction term, X*W. While, the R2 does not

significantly change (p = 0.6291) by 0.0075 with the inclusion of the interaction term, X*Z.

Thus, the type of business can significantly moderate (p < 0.05) the influence of recording with

the overall management, while the number of years in operation cannot significantly moderate

(p > 0.05) the influence of recording with overall management.

Table 30

Moderating Effect of Scope of Clients on Recording and Overall Management

R R-sq MSE F df1 df2 p

0.6192 0.3834 0.2935 25.7422 5.0000 207.0000 0.0000
Test(s) of highest order unconditional interaction(s)
R2-chng F df1 df2 p
X*W 0.0038 0.6302 2.0000 207.0000 0.5335
Focal Predict: Recording (X)
Mod Var: Scope of Clients (W)

While, in the test of unconditional interaction of the moderating variable, scope of

clients, it shows that the R2 change of 0.0038 is not significant (p = 0.5335) with the inclusion
 98

of the interaction term, X*W. Thus, the scope of clients cannot significantly moderate (p >

0.05) the influence of recording with overall management.

Financial Statement Preparation and Overall Management

Table 31

Moderating Effect of Type of Business and Number of Years in Operation on Financial

Statement Preparation and Overall Management
R R-sq MSE F df1 df2 p
0.5703 0.3253 0.3340 7.3796 13.0000 199.0000 0.0000
Test(s) of highest order unconditional interaction(s)
R2-chng F df1 df2 p
X*W 0.0003 0.0504 2.0000 199.0000 0.9509
X*Z 0.0081 0.5997 4.0000 199.0000 0.6633
Focal Predict: Financial Statement Preparation (X)
Mod Var: Type of Business (W)
Mod Var: Number of Years in Operation (Z)

In the test of unconditional interaction. It shows that the interaction between the

variables with the moderating variables – type of business (p = 0.9509) and number of years

in operation (p = 0.6633), has no significance and no moderating effect on financial statement

preparation and overall management, where both p-values is greater than the significance

threshold of 0.05.

Moderating Effect of Scope of Clients on Financial Statement Preparation and Overall

Management

ERROR: A linear or near linear dependency (singularity) exists in the data

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Monitoring of Business Finances and Overall Management

Table 32

Moderating Effect of Type of Business and Number of Years in Operation on Monitoring of

Business Finances and Overall Management
R R-sq MSE F df1 df2 p
0.6642 0.4411 0.2767 12.0816 13.0000 199.0000 0.0000
Test(s) of highest order unconditional interaction(s)
R2-chng F df1 df2 p
X*W 0.0146 2.5958 2.0000 199.0000 0.0771
X*Z 0.0534 1.7386 4.0000 199.0000 0.1429
Focal Predict: Monitoring of Business Finances (X)
Mod Var: Type of Business (W)
Mod Var: Number of Years in Operation (Z)

In the test of unconditional interaction. It shows that the interaction between the

variables with the moderating variables – type of business (p = 0.0771) and number of years

in operation (p = 0.1429), has no significance and no moderating effect on monitoring of

business finances and overall management, where both p-values is greater than the significance

threshold of 0.05.

Table 33

Moderating Effect of Scope of Clients on Monitoring of Business Finances and Overall

Management
R R-sq MSE F df1 df2 p
0.6475 0.4193 0.2764 29.8883 5.0000 207.0000 0.0000
Test(s) of highest order unconditional interaction(s)
R2-chng F df1 df2 p
X*W 0.0508 9.0589 2.0000 207.0000 0.0002
Focal Predict: Recording (X)
Mod Var: Scope of Clients (W)

While, in the test of unconditional interaction of the moderating variable, scope of

clients, it shows that the R2 change of 0.0508 is significant (p = 0.0002) with the inclusion of

the interaction term, X*W. Thus, the scope of clients can significantly moderate (p < 0.05) the

influence of monitoring of business finances with overall management.

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Discussions

This section presents the discussion and interpretation of the results presented in the

previous section. Implications and relevant literatures to support the result are studied and

identified according to the objectives of the study. The section also presents the conclusions

and recommendations of the study based on the interpreted results.

Interpretation of the Results

Demographic Profile of the Online Sellers

Online Sellers in South Cotabato

The pre-qualifying criteria allowed the researchers to understand and describe

the respondents of the study in terms of the business set-up, products or services

offered, and business location. Where, most of the online sellers in South Cotabato

have a current business set-up of performing online business transactions with a

physical store that is used for the pick-up of products. Where, majority of them are

located in the City of Koronadal that mostly sells clothing apparels.

Type of Business

Majority of the online sellers in South Cotabato were involved in the

merchandising business. This implies that the merchandising business is the most

common type of online business found in the city and municipalities in South Cotabato

and online sellers are commonly into merchandising business that sells clothing

apparels, as the mostly sold product in the province. According to Palic, M. (2015),

most online businesses, not the majority, decided to pursue a merchandising business

due to its cost-effectiveness and ease of access to products.

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Number of Years in Operation

Most of the online sellers in South Cotabato are operating for less than a year,

implying that entrepreneurs have embraced the digital phenomenon for online shopping

and are motivated to build a start-up business. The results of the study had revealed that

as the years in operation increases, the number of operating online businesses

decreases. Implying that not all are as motivated when the operations began and also

factored with the difficulties related to running the business. This finding is supported

by the studies of Mbroh and Attom (2011), Gronum (2012), Amoako (2013), Bowen

et. al (2014), and Ntim et. al (2014) on small businesses, that half or most of them

stagnate or deteriorate in performance, and roughly 60 percent of them collapse during

the first-three years of operation due to management inefficiencies caused by poor

record keeping. Moreover, the results are also parallel with the findings of the Bureau

of Labor Statistics, where approximately 80 percent of small business will survive the

first year of operation, 70 percent on the second year, 50 percent on the fifth year in

operation, and around 30 percent will survive the tenth year in operation.

Scope of Clients

Majority of the online sellers in South Cotabato have clients from within and

outside the provincial scope. This implies that these online sellers are not constrained

in terms of who and where the customers are located as long as both parties agree on

the payment and delivery method. This type of client scope would also imply that

through having a wide customer base, business develop and continual operations is

possible. The findings of this study can be anchored with the claim of Kokemuller N.

(2018), where organizations with broad target market can gain tangible and intangible
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benefits such as increased total customers, media flexibility, higher revenue and cash

flow.

Level of Bookkeeping Practices

Recording

In the result of the recording practices, the indicators ‘I record all the

receivables of my online business’, and ‘I record all the payables of my online business’

both have gained the highest mean score which implies that online sellers keep and

create an own version of record journal in order to be reminded of whom to pay the

obligations or whom to collect the receivables, since the online sellers only have limited

resources in capitalizing the business, hence, considered to be as the working capital in

order to keep the business operating. The company's records of business activities aid

in decision-making and provide verification (Danford, John, & Lazaro, 2014). This can

be compared to accounting records that are backed up by properly validated vouchers

as valuable evidence in court in the event of customer, supplier, or employee fraud. The

result of the study is parallel with the claims of Rod Velasco and Gulf Oman (2015) in

which the authors concluded that MSMEs recognize revenues when customers pay the

full amount of goods or services purchased. In the case of credit sales, revenues are

recognized when products and services are paid for.

While, the indicator ‘I use journals or accounting books to record my

transactions’ gained the least mean score which implies that online sellers in South

Cotabato have a limited knowledge in terms of properly recording business transaction

that is why online sellers only make an own version of record journal. Similarly,

recording could help small businesses, but owners may not have had the time or
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expertise to build and maintain a viable accounting journal (Ademola et al., 2012). The

findings are consistent with the views of Samkin et al. (2014), where limited resources

may explain why small business owners performed many of the tasks themselves.

Small businesses may have found it difficult to perform functions such as bookkeeping

(Breuer et al., 2013; Padachi, 2012; Sangster, Stoner, De Lange, O'Connell, &

Scataglini-Belghitar, 2012). However, due to management's lack of knowledge, most

small businesses were unable to perform accounting functions effectively (Husin &

Ibrahim, 2014). Thus, failure to keep proper records is one of the reasons why

businesses fail as supported by Ibrahim (2015).

Overall, online sellers in South Cotabato employ a good level of recording

practice in which recording business transaction, whether formal or informal, can have

an impact to whether the online business is improving, which items are saleable, how

much money expend or what improvements are required to help increase the likelihood

of business success. This is in coherence with the findings of Mutua J. (2012) that

recording business transaction has an impact on the growth of SMEs in terms of sales,

business size and profitability. As supported by the study of Dawuda and Azeko (2015)

which concluded that insufficient record-keeping or the absence of financial documents

results in resource mismanagement and poor cash management. Without keeping

records, it would be difficult to determine profitability and business vulnerability; thus,

bookkeeping has emerged as essential for the foundation of business (Ademola et al.,

2012). Where, the decision-making process for small business owners is simplified

when business activities and transactions were properly recorded (Breuer, Frumusanu,

& Manciu, 2013; Umeji & Obi, 2014).

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Financial Statement Preparation

Based on the result of the financial statement preparation practices of the online

sellers, the indicator ‘The end product of the financial statements is fully utilized for

the development of the business’ gained the highest mean score which indicates that

financial statements are prepared by the online sellers for the purpose of expanding the

business operations. As business owners realized the value of financial literacy and

skills in decision-making (Kidane, 2012; Samkin et al., 2014). Similarly, Mbroh and

Attom (2011) stated that a successful accounting system should be able to meet the

information needs of both internal and external decision-makers for decision-making

rather than just making one. Bekhradinasab, V. (2020) conducted a study parallel to the

findings of the study wherein the income statement returns can be predicted by using

pricing and differentiation strategies. Thus, the financial report helps the management

decide what sort of business strategy business should adopt for the income statement

to become favorable.

On the other hand, the indicator ‘The business hires someone to prepare the

financial statements’ gained the least mean score which implies that it is the online

sellers in South Cotabato that prepares the financial statements of the online business

rather than hiring someone to make one since the online sellers only record the

expenditures and cash sales for a particular day to reconcile cash balance for the day as

cited by Rod Velasco and Gulf Oman (2015). However, Banham and He (2014)

disagree with the findings, where small business owners needed advisers with

knowledge outside of the accounting industry to help sustain the businesses.

Accountants with experience in other business disciplines, such as marketing or

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finance, were able to assist small business owners in achieving long-term viability

(Barbera & Hasso, 2013; Songini, Gnan, & Malmi, 2013). Similarly, small business

owners who hired accountants to manage the accounting system(s) and who could also

meet other advising needs were more successful (Banham & He, 2014; Jarvis & Rigby,

2012).

Based on the result of the study, the online business employs an average level

of financial statement preparation where the online sellers in South Cotabato have an

efficient way to prepare financial statements, make timely decisions for the survival

and development to continue business operations. The practice of financial statement

preparation allows the users to find out if the company has a positive net worth if it has

enough cash and short-term assets to pay its debts, and if the company is very indebted

compared to its competitors (Fernando, 2022). Financially oriented business

management styles contributed to innovative high-growth strategies (Ademola et al.,

2012). As a result, a good financial statement should be simple to read and understand.

Companies can better understand the results and plan for a more profitable future if

financial statements are prepared in a clear and professional manner (Suh, 2017).

Monitoring of Business Finances

In the practice of monitoring of business finances, the indicator ‘I monitor my

receivables regularly’ have gained the highest mean score which indicates that online

sellers in South Cotabato have been monitoring the cash flow of the business

particularly the receivables, since mainly these online sellers are focused on monitoring

the cash inflows and outflows of the business. The claims of Kuznetsova et. Al., (2017),

supports the result of the study, since financial monitoring is vital while tracing the
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changes in economic trends to support the certain level of competitiveness and business

success. Furthermore, the findings of the study are consistent with the findings of

Hatteu (2012), who found that keeping proper records on collectibles and payables is

important in the business operation to monitor the period of when to collect and when

to pay obligations.

On the other hand, the indicator ‘Additional funds needed for the business is

easily identified’ have the least mean score which indicates that online sellers in South

Cotabato have limited resources in terms of capitalizing the business finances since this

type of business can also considered as a start-up business. The result contradicts the

fundamental element of the financial monitoring process, which states that continuous

observation and analytical assessment of the dynamics of the company's financial

standing can change the company's financial development tendencies (Anureev,

2017). Moreover, the result contradicts with the claims of Abdul-Rahamon & Adejare,

(2014), in which accounting records help with resource allocation and performance

management. To effectively allocate resources, resource allocation requires not only

record keeping but also an assessment of the viability of the business to be undertaken

through capital budgeting.

Overall, the online sellers in South Cotabato have an excellent business

monitoring practices wherein the online sellers have enough knowledge and strongly

adhere to the entity concept and going concern principle which, these online sellers

expect that to continue to operate as long as the business profits are good as cited by

Rod Velasco and Gulf Oman (2015). Abdul-Rahamon & Adejare, (2014); Ademola et

al., (2012) views are similar to the results wherein keeping the information accurate,
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meaningful, and timely was a foundation necessary for businesses to formulate

decisions for survival and growth.

Filing of Taxes

In the tax filing practices of the online sellers in South Cotabato, the indicator

‘I acknowledge my tax obligations’ have gained the highest mean score which indicates

that online sellers acknowledge the taxes of the business. This coincides with the views

of World Bank wherein adequate accounting records, specifically the financial

statements serve as a foundation for a complete and accurate income tax computation

and maintaining fair tax rates can support the development of the private sector and the

formalization of firms, including effects on firm creation and the development of small

and medium-sized enterprises (SMEs).

On the other hand, the indicator that gained the lowest mean score is ‘The

business is registered in BIR’, which implies that the online sellers’ business in South

Cotabato are not registered in BIR as there is a lack of awareness on the BIR tax

mandate , particularly BIR RMC No. 60 – 2020 (Obligations of Persons Conducting

Business Transactions Through Any Forms of Electronic Media, and Notice to

Unregistered Businesses’) and BIR RMC No. 55-2013 (Reiterating Taxpayers'

Obligations in Relation to Online Business Transactions) in which online sellers are

operating without the knowledge of these aforementioned BIR tax mandates. The result

can be attributed to the views of World Bank in which small and medium-sized

businesses, which contribute to economic growth and employment but do not

contribute much to tax income, benefit most from low tax rates. This situation also
 108

creates an environment that encourages SMEs growth while maintaining tax

compliance is a difficulty that the government face.

Overall, online sellers in South Cotabato employs a weak filing of taxes,

indicating that most of the online sellers does not practice filing of taxes may be

because online business are considered small businesses and not required to comply

with such taxes. However, the goal of the Bureau of Internal Revenue is not to increase

the tax responsibility of small business owners, but rather to bring income tax into the

country's tax net for larger internet enterprises such as Lazada, Netflix, Shopee, and

Google. The result of the study is parallel to the study conducted by Nasrullah in 2020,

which showed that a tax on online businesses on Instagram have been earning a lot of

money but not being taxed owing to a lack of precise obligatory laws. As a result, the

government intends to publish a new regulation to impose a tax on the revenue of online

businessmen on Instagram, with the rule that Instagrammers' income is qualified as

taxable income and value added tax as defined by the Indonesian Tax Law. Thus, with

proper tax management, owners benefit in the long term; better tax management is

related to higher returns (Mulyadi, M.S., 2015), and a well-functioning tax system

allows the management to fulfill paying of taxes at a higher-level (Kosov. M.E., 2016).

Overall Level of Bookkeeping Practices

With the results of the overall bookkeeping practices, ‘Monitoring of Business

Finances’ gained the highest mean which implies that online sellers in South Cotabato

have an excellent bookkeeping practice of monitoring of business finances. Where the

online sellers monitor its business finances regularly as this bookkeeping practice helps

the business in identifying what needs to be done in order for the business to continue
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operating. Knowing when and how to allocate resources, products, services, and pricing

was crucial to survival (Banham & He, 2014). As a result, business owners needed to

constantly monitor and evaluate the company's progress as changes to the business plan

occurred (Stewart & Gapp, 2014). The accounting system was involved in continuous

monitoring because it was part of the firm's evolution that created the environment in

which organizational changes occurred (Lawrence & Botes, 2013). The findings of the

study are associated with the claims of Adejare, et.al (2014), wherein most of the

respondents strongly agree that record keeping practices reduces operating costs,

improves efficiency, and productivity and these practices assist in resource allocation

and performance planning and used these records to evaluate performance of

businesses.

On the other hand, the bookkeeping practice that had the lowest mean is the

‘Filing of Taxes’ indicating that online sellers in South Cotabato does employ a weak

level of this bookkeeping practice of tax filing as the business is not registered in BIR

and that online sellers in South Cotabato are not aware of BIR tax mandate on online

sellers, specifically the BIR RMC No. 60-2020 which is the ‘Obligations of Persons

Conducting Business Transactions through Any Forms of Electronic Media and Notice

to Unregistered Businesses’.

Overall, online sellers in South Cotabato employs an average level of

bookkeeping practices which indicates that these online sellers still have something to

improve particularly in filing of taxes and financial statement preparation. The findings

also indicated that the business owner should understand financial reporting and

overcome barriers by implementing alternative methods of producing reports, and that

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the information contained in the reports met the internal needs of the business and aided

the decision-making process in order to improve business performance (Bauer &

Baran, 2015).

Level of Management of Business of Online Sellers

Planning

With the results of the planning function of management, the indicator ‘I

identify in advance what needs to be done and the necessary resources to implement

the plan’ have gained the highest mean score indicating that online sellers in South

Cotabato determines what has to be done ahead of time, as well as the resources

required to carry out the plan of the online business, may it be for expansion purposes

and/or for the development of the business processes. The findings are consistent with

those of Alattar et al. (2014), who discovered that planning formalization has a positive

and highly significant impact on the likelihood of belonging to a group of growth firms.

Similarly, SMEs place a greater emphasis on revenue planning of business. Similarly,

production, cash flow, and financial position budgets are heavily implemented by

approximately 75% of budgeting users, according to Ahmad (2017). Furthermore, as

Demong and Croll (2012) point out, a smaller firm may only require a basic budget and

some standard cost figures for a more infrequent pricing and cost decisions, primarily

for planning and control.

However, indicator ‘I forecast my target monthly sales quota’ gained the least

mean score which can be attributed that online sellers do not record or provide sales

quotas in managing the business considering it is small and is only concerned whether

the business will make a profit or a loss.This could also be attributed to the findings of
 111

Biger (2012), and Ng and Akroyd (2013), who discovered that small business owners

who lacked knowledge of strategic planning, possibly due to a lack of business

education or experience, suppressed business growth. The findings contrast with those

of Romero and Martnez-Román (2012), who found that self-employed individuals with

prior experience as employees and a management style that valued cooperation and

planning made significant progress for the business.

Overall, the level of planning management of online sellers found in South

Cotabato employs a good level of planning management. The overall result of the study

is parallel on the study of Atanasova and Madgerova (2021), in which forecasting and

planning process shows that entrepreneurs most often develop forecasts for the income

and business expenses as well as the cash flow. Thus, small business accounting

provides the crucial financial information required to make effective business

decisions, ranging from determining how much merchandise to purchase to dictating

what wages the company can afford to pay. Financial planning occurs at all stages of

an organization, including the start-up phase. It entails developing a strategy that

specifies how much capital and resources the company requires (Litman, 2020).

Knowing what to track was critical in decision-making because the data was used to

develop and maintain strategies that met objectives (Sarraf et al., 2013).

Organizing

The indicator ‘I make sure that every process in the business is coordinated’ of

the organizing function of management gained the highest mean score which indicates

that online sellers in South Cotabato ensure that all business operations are aligned in

order to complete the assigned task effectively and efficiently for the purpose of
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business/product value and most importantly for customer satisfaction. The findings of

the study are parallel to the study conducted by Kabiru et al. (2018), identifying the

tasks to be performed is critical to the development of the business' work flow process

and achieving desired business outcomes. Furthermore, according to Charifzadeh

(2017), owner-managers must organize a business' resources, which means arranging

the various elements of an organization into a purposeful and efficient order or structure

to ensure that the work flow process is coordinated across all business functions.

On the other hand, the indicator ‘I delegate tasks and responsibilities’ gained

the lowest mean score which implies that the online sellers handle the task solely and

does not seek help or assign tasks to the employees, if there is any. Furthermore, if an

online seller has employees, not delegating responsibilities is poor organizational

inefficiency and failure to achieve the institution's goals, one of which is to coordinate

and supervise the various functions (John et al., 2018).

Overall, online sellers in South Cotabato employs a good level of organizing

management and this result can be compared to the study conducted by Kabiru, et.al

(2018) in terms of the organizing functions wherein organizing has an impact on the

organizational performance of state corporations. It is assumed that management in

these firms does perform key management functions with the required skill and

diligence. Furthermore, this result is consistent with Administrative Theory, which

states that organizing can be used on standardizing and improving the working process,

as well as the adoption of new types of business structures, because these are

attributable to the importance of business management to the various business activities

and functions.
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Controlling

Under the controlling function of management, the indicator ‘I make sure that

tasks are accomplished effectively and efficiently’ gained the highest mean score which

indicates that online sellers in South Cotabato gives ample time in ensuring that tasks

are being done without any errors in order to maintain the value of the online business.

Moreover, goal alignment is critical because most business leaders must spread

influence across many areas of the organizational environment to ensure an appropriate

span of control, as cited by Kao, Pai, Lin, and Zhong (2015). According to Charifzadeh

(2017), managers want to ensure that things evolve in the intended way: goals have

been set with the intention of achieving them, projects have been started with the

intention of being completed as planned, and rules have been set with the expectation

that will be followed.

On the other hand, the indicator that gained the least mean score is ‘I establish

performance/output standards’ which indicates that online sellers do not follow or

establish a specific performance standard on the business since there is no requirement

needed to be met. However, as to the findings of the study conducted by Voku, et. Al.,

(2014), states that controlling achieves its goal by coordinating and integrating business

functions and by providing information to ensure the rationality of executive actions,

particularly those involving planning and monitoring.

Overall, the online sellers in South Cotabato have a good level of controlling

management of business which implies that the online sellers maintain control over the

management of business specifically in making adjustments as to the business

operations. Similarly, Pac and Monja-kare (2013) found that controlling was
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implemented in more than 60% of the most successful Croatian companies and was

regarded as a critical factor in company success, indicating that an effective controlling

function is positively related to business efficiency. Thus, the study's findings are

consistent with the claim of Kozarevic and Vehabovic(2020), that adopting the

controlling function had a positive impact on the development of net working capital.

Similarly, Raymond Onyema Obinozie (2016) asserts that non-financial management

control systems are strongly and positively related to business organizational

performance in terms of product and organizational value.

Overall Management of Business of Online Sellers

Overall, the indicator ‘Organizing’ have gained the highest mean score among

the three indicators of business management. This implies that online sellers in South

Cotabato strictly implement the process of organizing in the business processes

particularly in terms of process coordination which could either lead to customer

satisfaction or business/product value. Similarly, customer satisfaction measures,

according to Ittner and Larcker (2015), are leading indicators of non-financial

performance and accounting. This is supported by a subsequent study by Banker et al.

(2013), which discovered a positive relationship between customer satisfaction

measures and future accounting performance.

While, the indicator ‘Planning’ has the least mean score showing that online

sellers do not rely on forecasting, planning and preparing the needed information for

the business to grow since these individuals were only concern if the business will have

a profit or loss. But, Sarraf et al., (2013) contradicts with the result since knowing what

to track was important when it came to decision-making because the information served
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to create and maintain strategies that accomplished goals. Thus, small business

accounting provides the crucial financial information required to make effective

business decisions, ranging from determining how much merchandise to purchase to

dictating what wages the company can afford to pay. This could also be attributed to

the findings of Biger (2012), and Ng & Akroyd (2013) in which small business owners

who lacked knowledge of strategic planning, perhaps due to lack of business education

or experience, held back business growth.

Overall, online sellers in South Cotabato employs a good level of business

management which implies that the online sellers properly manage the business

knowing that these individuals are motivated to make the business grow and eventually

be a big business rather than the small one. This could be anchored to the study

conducted by Atanasova and Madgerova (2021), in which the favorable findings for

the use of planning, organizing, and controlling in the activities of the studied

enterprises are attributable to entrepreneurial initiative and activity in making

entrepreneurial decisions to start and operate one's own business, and bookkeeping,

which is a financial control tool that lets managers to know the financial positions of

the businesses as cited by Eric and Gabriel (2012).

The Relationship between the Independent Variables – Recording, Financial Statement

Preparation, Monitoring of Business Finances, and Filing of Taxes, and the Dependent

Variable – Overall Management

There is a positive significant relationship between the recording, financial statement

preparation, monitoring of business finances, filing of taxes, and the overall management of

business. The presence of the significant relationship among the variables implies that the
 116

bookkeeping practices – recording, financial statement preparation, monitoring of business

finances, and filing of taxes can influence the overall management of online sellers. Where,

recording has a strong positive relationship, financial statement preparation and monitoring of

business finances have a moderate positive relationship, and filing of taxes has a weak positive

relationship. This positive relationship among the variables implies that the relationship among

the variables tend to move in the same direction. Meaning, when the level of bookkeeping

practices increases (or decreases), the overall management of the business of online sellers also

increases (or decreases).

According to Ajao, et al (2016), bookkeeping influences the growth and development

of the business by ensuring the utilization of information, tracking of revenues and taxes, and

determining the financial position. Moreover, the author highlighted the accounting for small

businesses that provides a crucial information to make effective decisions. The assistance of

bookkeeping is beneficial for the solid financial planning and control, that aids in the decision

making and organizational transformation (Ademola et al, 2012). The findings of the study

can also be related to the findings of Muhindo, A., Mzuza, M. K., & Zhou, J. (2014) that there

is a positive relationship between the accounting information system and profitability level of

small-scale businesses. The essence of the Henri Fayol’s Administrative Theory was also

relevant with the findings of the study. The provided framework, specifically the financial,

accounting, and managerial activities, when duly focused could lead to the coordination of the

internal activities of the organization. Hence, the business operations, as influenced by the

principles of management, can be structured in a way that improves the efficiency of

management aided by standardized processes.

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Previous researches from Boame, I., et al. (2014), Ajao, O., et al. (2016), and Kirsten

C., et al. (2012) has shown that performing bookkeeping duties allows business owners to

benefit in a variety of ways including profit calculation, inventory purchasing decisions,

income statement preparations, measuring business performance by comparing current and

previous financial records, understanding the big picture of the business financials, forecasting,

budgeting, and attracting customers. The discussed benefits of performing bookkeeping duties

are in coherence with the mathematical models and statistical methods under the Quantitative

Theory of Management that is focused on the decision making and economic effectiveness.

Highlighting the models and concepts under Management Science, the managerial situations

and quantitative techniques in the Operations Management, and the effective information-

based decisions through the Management Information System.

Moreover, the presence of the positive correlation between the variables can also lead

to business failure when bookkeeping practices are poorly implemented. Wherein, the

insufficient bookkeeping procedure and struggle to understand suitable bookkeeping standards

leads to failure in reaping the mentioned outcome benefits of bookkeeping (Zakaria W., et al,

2017). This is also supported by Sibanda and Manda (2016) where failure to maintain complete

accounting records and non-adherence to adequate accounting practice can negatively affect

the financial performance of the business.

Through the results of the Pearson R Correlation, it indicated that the bookkeeping

practices (recording, financial statement preparation, monitoring of business finances, and

filing of taxes) have a significant relationship with the overall management of online business.

Hence, the null hypothesis 1 that states “There is no significant relationship between
 118

bookkeeping practices (recording, financial statement preparation, monitoring of business

finances, and filing of taxes) and overall management of online business” is rejected.

Bookkeeping Practices (Recording, Financial Statement Preparation, Monitoring of

Business Finances, and Filing of Taxes) that influence the Overall Management of

Business of Online Sellers

Only the independent variables, recording, financial statement preparation, and

monitoring of business finances significantly influences the overall management of business

of online sellers in South Cotabato. This implies that the changes in the mentioned significant

independent variables correlate with the shifts in the dependent variable. Indicating that every

unit increase (or decrease) in the bookkeeping practices of recording, financial statement

preparation, and monitoring of business finances leads to an increase (or decrease) in the

overall management of business of online sellers. Moreover, the significant independent

variables can play a significant role in shaping the overall management. The result clearly

directs a positive affect of the significant bookkeeping variables to the overall management of

business. However, the relatively lower explanatory power of the model implies that the

recording, financial statement preparation, and monitoring of business finances does not

explain much of the variability in the overall management. Where, the significant bookkeeping

practices can only influence, not predict, the movement in the overall management of business

of online sellers.

The result of the regression analysis revealed the influence that bookkeeping practices

have to the overall management of the business of online sellers in South Cotabato. This is in

coherence with the study of Adisa-Adedeji Fatai (2016) on the “Role of Accounting

Information on Small and Medium Scale Business in Nigeria”, where it claimed that
 119

accounting information is useful to businesses as it facilitates the solution and resolution of

business planning, organization, and control functions of companies as a social organization.

Ernest (2018) also stated that if proper records were adequately kept, it would facilitate the

enhancement of business performance and management of business, making proper record

keeping crucial for decision making and business adjustment (Olantunji, 2013). However, in

cases of failure to maintain complete accounting records and non-adherence to adequate

accounting practice, as stated by Sibanda and Manda (2016), can negatively affect the financial

performance of the business.

Also, the results of the mean scores level of bookkeeping practices and coefficients of

the bookkeeping practices that significantly influence the overall management revealed that

monitoring of business finances and recording practices implies to a good to excellent level of

bookkeeping practice is employed in the online business, wherein the practice of monitoring

of business finances is considered to have a strongest influence to the overall management.

This result is in line with the conducted study of Patel (2015) about the “Effects of Accounting

Information System in Organizational Profitability”, which concluded that monitoring finances

and record keeping enables the business to make better decisions, organize internal control

systems and enhance performance measures. Moreover, with the influence that the practice of

financial statement preparation on the overall management is supported by the findings of

Fatima et, al (2016) about the Accounting Information System: The Need of Modernisation,

which states that recording and presentation of financial position enables the company to

organize information in an accurate and timely manner to the manager, internal and external

users.
 120

Overall, the influence of bookkeeping practices (recording, financial statement

preparation, and monitoring of business finances) on the overall management of business of

online sellers that was revealed through the results of the study is supported by the Harvard

Business School Online (2020) wherein recording, financial statement preparation, monitoring

of business finances induces the management to assess and control the entity by making

comparisons actual performance against standards and determination of the variances of actual

budget to the planned budget, and through monitoring the expenses and cutting unnecessary

costs will help the company’s income and cash flow. Lastly, this stated influence between the

variables is inferred with the results of the study of Ajao, Oyeyemi, Moses (2016) stating that

bookkeeping practices are directly related to the growth, survival, and achievement of the

firms’ objectives.

Through the results of the Multiple Regression Analysis, it indicated only the three

bookkeeping practices (recording, financial statement preparation, and monitoring of business

finances) carries a significant influence on the overall management of online business. Hence,

only these three significant independent variables included in the regression model that

influence the overall management rejects the null hypothesis 2, “The bookkeeping practices

(recording, financial statement preparation, monitoring of business finances, and filing of

taxes) cannot influence the overall management of the business of online sellers”. While the

bookkeeping practice of filing of taxes does not reject the null hypothesis 2.

Moderating Effect of the Demographic Profile (Type of Business, Number of Years in

Operation, and Scope of Clients) on the Relationship of Bookkeeping Practices (Recording,

Financial Statement Preparation, Monitoring of Business Finances, and Filing of Taxes)

and Overall Management of Business of Online Sellers

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The result of the moderation analysis using the hierarchical multiple regression / Hayes

PROCESS indicated that the type of business has a moderating effect on the relationship of

the bookkeeping practice of recording and overall management. This moderating effect implies

that in incorporating the type of business to the relationship between recording and overall

management, the overall management could be improved as indicated by the significant R 2

change with the inclusion of the interaction between the moderating variable (type of business)

and recording. Further, this implies that the type of business makes the online sellers pay

attention to the recording practices and so leading to an improvement on the overall

management of the online business. At the same time, this moderating effect induced by the

type of business strengthens the relationship between bookkeeping practice and overall

management of business of the online sellers. However, the finding of this study about the

moderating effect of type of business on the relationship of recording and overall management

contradicts with the result of Management Accounting Practices among Vietnamese Small and

Medium Enterprises discussed by Bui et al. (2020) which concluded that there was no

difference in the application of management accounting in the type of enterprise. The authors

further explained that the management accounting applied relies heavily on the requirements

of the manager and does not depend on the type of enterprise.

Also, there was an established moderating effect of the scope of clients on the

relationship of the bookkeeping practice of monitoring of business finances and overall

management. This moderating effect implies that in incorporating the scope of clients to the

relationship between monitoring of business finances and overall management, the overall

management could be improved as indicated by the significant R 2 change with the inclusion of

the interaction between the moderating variable (scope of clients) and monitoring of business
 122

finances. Further, this implies that the scope of clients makes the online sellers pay attention

to the monitoring of business finances practices and so leading to an improvement on the

overall management of the online business. At the same time, this moderating effect induced

by the scope of clients strengthens the relationship between bookkeeping practice and overall

management of business of the online sellers. The revealed moderating effect of scope of

clients on the relationship of monitoring of business finances and overall management is

supported by the results of Product/Customer Scope: Competition Antecedents, Performance

Effects and Market Context Moderations by Pehrsson (2011). Wherein, the findings of the

study concluded that the broader the product or customer scope of a firm, the better the

financial performance if the firm operated in a growing market. It further implied that the

business must be aware of its main competitor’s scope, and adapt its scope to the level of the

market growth.

Lastly, the non-existence of the moderating effect of the number of years in operation

to the relationship of the independent and dependent variables is not parallel with the findings

of Mohammad Alayuddin (2018), where the length of business operations can be a determining

factor that represents the stability of a business, with the main challenge of financial stability

in the first three years of business operation.

Through the results of the Moderation Analysis, it indicated only type of business has

a significant moderating effect to the relationship of recording and overall management, and

scope of clients also has a significant moderating effect to the relationship of monitoring of

business finances and overall management. Hence, only these two cases reject the null

hypothesis 3, “The demographic profile (type of business, number of years in operation, and

scope of clients) of the online sellers does not have a moderating effect on the bookkeeping
 123

practices (recording, financial statement preparation, and monitoring of business finances)

and overall management of business of online sellers”. Thus, all other cases do not reject the

null hypothesis 3.

Conclusions

The study aimed to understand the influence of bookkeeping practices to the overall

management and aimed to determine if the demographic profile has a moderating effect on the

relationship of bookkeeping practices and overall management of business of online sellers in

South Cotabato. Based on the results of the study, the following conclusions were drawn;

The results of the study established a significant relationship between the bookkeeping

practices (recording, financial statement preparation, monitoring of business finances, and

filing of taxes) and the overall management of online business. However, only recording,

financial statement preparation, and monitoring of business finances carries a significant

influence to the overall management. Lastly, only the moderating variables – type of business

and scope of clients have a significant moderating effect to the relationship of independent and

dependent variables. Where, type of business has a significant moderating effect on the

relationship of recording and overall management, and scope of clients has a significant

moderating effect on the relationship of monitoring of business finances and overall

management

Majority of the online sellers are situated in the City of Koronadal and sells clothing

apparels that performs business transaction online with a physical store for the pickup of goods.

Moreover, the merchandising business is the most common business type. When it comes to

the number of years in operation, most are operating for less than a year and 1-3 years with

clients located within and outside South Cotabato.

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When it comes to the recording and monitoring of business finance practices of the

online sellers, recording and monitoring of receivables and payables of the online business is

duly observed. However, majority of them do not outsource bookkeeping services or hire

individuals to perform the recording and financial statement preparation but the online sellers

made sure to utilized the end product of the financial statements for the development of the

business. Also, despite fully acknowledging the tax obligations of the business, majority of the

online sellers in South Cotabato are not registered in the BIR.

With the online sellers’ business management practice, resources in implementing the

plan are identified in advance wherein every work process are made sure to be coordinated to

effectively and efficiently accomplish the tasks. However, the online business’ target monthly

sales quota, delegation of tasks and responsibilities, and establishment of performance or

output standards needs to be focused on to improve the overall level of management employed

in the online business.

For the null hypothesis 1, the Pearson-r correlation revealed that the bookkeeping

practices – recording have a significant strong positive relationship, financial statement

preparation and monitoring of business finances have a significant moderate positive

relationship, and filing of taxes shows a significant weak positive relationship. Overall, there

is a significant relationship between bookkeeping practices and overall management of online

business. Thus, Ho1 is rejected.

For the null hypothesis 2, the multiple regression analysis revealed that recording,

financial statement preparation, and monitoring of business finances are significant predictors

of the overall management of business. These results impose a direct positive affect of the

significant predictors on the overall management of business. However, the R2 have a relatively
 125

lower explanatory power, wherein the independent variables in the model does not explain

much of the variability in the dependent variable. Where, the significant bookkeeping practices

cannot predict but only influence the movement of the overall management. To conclude, the

recording, financial statement preparation, and monitoring of business finances carries a

significant influence to the overall management of business of online sellers in South Cotabato.

Thus, reject the Ho2. However, the filing of taxes does not influence the overall management

of business. Hence, it does not reject the Ho2.

For the null hypothesis 3, the results of the hierarchical regression analysis using Hayes

PROCESS had identified that the type of business and scope of clients have a moderating effect

on relationship of the independent and dependent variable. However, not all cases have a

significant moderating effect that strengthens the relationship between bookkeeping practices

and overall management of business of the online sellers. To specifically conclude, only type

of business has a significant moderating effect to the relationship of recording and overall

management, and scope of clients also has a significant moderating effect to the relationship

of monitoring of business finances and overall management. Hence, only these two cases reject

Ho3. Thus, all other cases do not reject the Ho3.

Recommendations

By having a proper bookkeeping practice, the online sellers in South Cotabato could

better gauge management decisions to ensure the long-term success of the business. On the

basis of the aforementioned findings and conclusions, the researchers therefore recommend

the following:
 126

Online Sellers

Online sellers in South Cotabato who are already implementing bookkeeping practices

should develop the financial statement preparation practice and tax filing practices by

considering the services of a bookkeeper or a bookkeeping service firm so that the records are

kept intact and can be easily tracked for business transactions. On the other hand, online sellers

in South Cotabato should maintain the currently employed bookkeeping practices in terms of

monitoring the business finances in order to mitigate the risk of business loss. Moreover, the

online sellers in South Cotabato should improve overall management practices in order for the

business to be coordinated in all aspects of business functions by focusing on forecasting target

monthly sales quota, delegating tasks and responsibilities, and establishing performance or

output standards that the online business should follow.

Overall, the online sellers should improve the level of bookkeeping practices employed

in the business. This can be done by being aware of the basics of bookkeeping through taking

advantage of the available bookkeeping seminars or workshops that could be offered by the

government intermediaries and private bookkeeping firms, as not all online seller has the

capacity to hire a professional accountant to take a look into the numbers of the business.

Online sellers should also consider the registration of the online business with the Bureau of

Internal Revenue to take advantage of the benefits of being a BIR-registered business, like the

eligibility for DTI's low-interest loan program, as well as the government's small wage subsidy

program and tax breaks from DTI and other government agencies.

Business Permits and Licensing Office

The findings of the study can assist the office to enhance the level of the online sellers

and business bookkeeping practices by employing bookkeeping ang management seminars as

 127

a pre-requisite upon issuance and/or renewal of business permits, allowing them to be more

efficient and coordinated in managing the businesses, whether online or a traditional business.

Bureau of Internal Revenue

The result of the study revealed that most of the online businesses are not registered

with the BIR. Thus, the study can serve as a reference for the bureau to raise awareness on

online sellers who have yet to comply with the BIR Revenue Memorandum Circular 60-2020

and facilitate the registration with the BIR, tax concerns, and tax collection from the online

sellers. The bureau could also gauge the online sellers by conducting an information drive on

the mentioned revenue code, and highlight the benefits and advantages of being a tax registered

business.

Department of Trade and Industry and Local Government Units

The study can provide awareness into the current registration status of online

businesses in South Cotabato, provide program interventions to sustain the growth and

development of the online sellers in South Cotabato. As the study had identified that currently

the online sellers in South Cotabato have an average level of bookkeeping practices and a good

level of business management, the department could focus the current Mentor ME (micro

entrepreneurs) program on relevant bookkeeping and management practices, in which a

coaching and mentoring approach is applied where large corporations teach Micro and Small

Enterprises or MSEs on different aspects of business operations. By integrating such

discussions, the awareness of the online seller on how to better handle business transactions

through proper bookkeeping practices and improvement of business management can be

boosted.
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The Business Students and the Academe

The findings of the study can be used as a reference for the relevant concepts in

bookkeeping practices and business management that was employed in an online business

setup. As the business students are geared towards building a business, regardless of online or

traditional business, the academe plays an influential role in strengthening the bookkeeping

and accounting, financial management, and business management background of the students.

Through this study, the academe could integrate basic accounting and management

subjects to every student, not only to the business student, since becoming an entrepreneur is

not limited to the students under the business management courses. Thus, it could help in the

development of a curriculum that is flexible enough to integrate basic accounting and

management subjects regardless of the course or field in academics.

Future Researchers

The findings of this study could be used as a starting point for the future researcher to

research on the areas that was not addressed through this study. The future research could also

narrow down the study scope to a specific city or municipality in order to gauge the status or

situation of the online sellers in the area in terms of bookkeeping practices and business

management. Moreover, the researchers could also further explore the areas of the

bookkeeping practices that are poorly observed in this study, like the financial statement

preparation and filing of taxes by unraveling reasons as to the poor practice of this indicators.

Furthermore, other indicators of bookkeeping practices that was not utilized in the study could

be explored in the pursuit of discovering a strong indicator of bookkeeping practices that

predicts the management of the business.

 129

The future researchers should also meet the target sample size or more and ensure the

sufficiency of the time for data gathering to ensure the participation of the respondents. This

would enable them to understand more the relationship between bookkeeping practices and

business management, as a larger number of respondents would better help in generalizing the

findings of the study.

 130

Appendix A

Letter to the Respondents

April 2022

Dear Respondent:

Good day!

In partial fulfilment of our requirement in Accounting Research, we, the 4th year Bachelor of
Science in Management Accounting students of Notre Dame of Marbel University, are
currently conducting a study with a chosen topic on online business
The study entitled, “BOOKKEEPING PRACTICES THAT INFLUENCE THE
OVERALL MANAGEMENT OF BUSINESS OF ONLINE SELLERS IN SOUTH
COTABATO” aims to understand the influence of bookkeeping practices to the overall
management of business of the online sellers. The importance of this study is to give owners
of online businesses insight into the importance of employing bookkeeping to develop the
management of the business.
In line with this, we would like to ask and invite you to be part of the pool of respondents of
the study. We hope that you could assist us by accepting our invitation and by responding to
the survey questionnaire honestly and completely. Rest assured that the data gathered will
remain confidential and be used for academic purposes only.
We believe that you are with us in our enthusiasm to finish this requirement. We are hoping
for your positive response on this study. Your approval to be part of the study will be gladly
appreciated. For further questions contact or email us at 09273505642 and
cabayloaivan@gmail.com
Thank you!

Respectfully yours,
The Researchers
Noted by:
MICHELLE F. CAPISTRANO, CPA, MBA
Research Adviser
 131

Appendix B
Letter to the Respondents for the Pilot Testing of Survey Questionnaires

April 2022

Dear Respondent:

Good day!

In partial fulfilment of our requirement in Accounting Research, we, the 4th year Bachelor of
Science in Management Accounting students of Notre Dame of Marbel University, are
currently in the process of validating the research instrument for our study with a chosen topic
on online business.
The study entitled, “BOOKKEEPING PRACTICES THAT INFLUENCE THE
OVERALL MANAGEMENT OF BUSINESS OF ONLINE SELLERS IN SOUTH
COTABATO” aims to understand the influence of bookkeeping practices on the overall
management of business of the online sellers. The importance of this study is to give owners
of online businesses insight into the importance of employing bookkeeping to develop the
management of the business.
In line with this, we would like to ask your good office for permission to allow us to conduct
a pre-test of our research instrument. Rest assured that the data gathered will remain
confidential and be used for academic purposes only.
We believe that you are with us in our enthusiasm to finish this requirement. We are hoping
for your positive response on this study. Your approval to conduct of the study will be gladly
appreciated. For further questions contact or email us at 09273505642 and
cabayloaivan@gmail.com
Thank you!

Respectfully yours,
The Researchers
Noted by:
MICHELLE F. CAPISTRANO, CPA, MBA
Research Adviser
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Appendix C
Survey Questionnaire
Page 1 of 6

“BOOKKEEPING PRACTICES THAT INFLUENCE THE OVERALL

MANAGEMENT OF BUSINESS OF ONLINE SELLERS IN SOUTH COTABATO”

Dear Respondents:
We, the 4th year Bachelor of Science in Management Accounting student-researchers
of Notre Dame of Marbel University, would like to ask and invite you to be part of the pool of
respondents for the study. You were chosen to be part of conducting the study because you fit
the criteria that the researchers have set for the study.
The study entitled, “BOOKKEEPING PRACTICES THAT INFLUENCE THE
OVERALL MANAGEMENT OF BUSINESS OF ONLINE SELLERS IN SOUTH
COTABATO” aims to understand the influence of bookkeeping practices on the overall
management of the business of online sellers. The importance of this study is to give owners
of online businesses insight into the importance of employing bookkeeping to develop the
management of the business.
We hope that you could assist us by accepting our invitation and by responding to the
survey questionnaire honestly and completely. Rest assured that the data gathered will remain
confidential and be used for academic purposes only. The researchers will respect your
decision if you wish to decline the invitation to participate in this study. We believe that you
are with us in our enthusiasm to finish this requirement. Thank you very much.
Sincerely,
The Researchers

GENERAL INSTRUCTIONS:
• Tick (/) the box which corresponds to your answer and kindly provide your answers on
the spaces provided. Please answer all the questions to the best of your knowledge.
• For the Likert’s Scale, use the scale provided in rating, 5 to 1.
 133

Page 2 of 6
Part I: RESPONDENT’S DEMOGRAPHIC PROFILE
Name of the Respondent (Optional):
Name of the Online Business (Optional):
1. What is your current business set-up? How do you conduct / market your business?
Purely online transaction
Online transaction with physical store

2. Where is your business located?

Banga
Koronadal
Lake Sebu
Norala
Polomolok
Sto. Niño
Surallah
Tampakan
Tantangan
T’boli
Tupi

3.1 What type of business do you operate?

Service
Merchandising
Manufacturing
3.2 What service or product do you offer? Provide your answer.

4. How long is the business in operation?

Less than a year
1-3 years
More than 3 years but less than 6 years
More than 6 years but less than 10 years
More than 10 years

5. What is the scope of client of your online business?

Within South Cotabato only
Outside South Cotabato only
Within and Outside South Cotabato
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Page 3 of 6
Part II: LEVEL OF BOOKKEEPING EMPLOYED IN THE ONLINE BUSINESS
Rate the following statements pertaining to the level of bookkeeping practices employed in
your online business. Use the scale below as a guide in measuring the level of bookkeeping
employed in your online business.

RATING SCALE
Range 5 4 3 2 1
Always Often Sometimes Rarely Never
Description (A) (O) (S) (R) (N)

A. RECORDING
Statements pertaining to Recording 5 4 3 2 1
1 I use journals or accounting books to record my
transactions
2 I record all the sales of my online business
3 I record all the purchases & expenses of my online
business
4 I record all the receivables of my online business
5 I record all the payables of my online business

B. FINANCIAL STATEMENT PREPARATION

Statements pertaining to Financial Statement Preparation 5 4 3 2 1
1 The business hires someone to prepare the financial
statements
2 The financial statements (Income Statement, Balance
Sheet, Cash Flow) are prepared regularly
3 The financial statements are prepared and used in decision
making
4 The financial statements are used to analyze trends in
business operations
5 The end product of the financial statements is fully utilized
for the development of the business
 135

Page 4 of 6

C. MONITORING OF BUSINESS FINANCES

Statements pertaining to Monitoring of Business Finances 5 4 3 2 1
1 I keep my personal and business fund separate
2 Additional funds needed for the business is easily identified
3 I monitor my payables regularly
4 I monitor my receivables regularly
5 I regularly monitor the cash flow (income and expenses) and
account balances (receivable and payable) of my online
business

D. FILING OF TAXES
Statements pertaining to Filing of Taxes 5 4 3 2 1
1 The business is registered in BIR
2 I comply with BIRs tax mandate
• BIR RMC No. 60-2020 ‘Obligations of Persons
Conducting Business Transactions Through Any
Forms of Electronic Media, and Notice to
Unregistered Businesses’
*BIR RMC No. 55-2013 ‘Reiterating Taxpayers'
Obligations in Relation to Online Business
Transactions’
3 I acknowledge my tax obligations
4 I monitor my tax returns filing
5 I make sure that I pay my taxes on time
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Page 5 of 6

Part III: LEVEL OF ONLINE SELLER’S MANAGEMENT OF BUSINESS

Rate the following statements pertaining to the level of management employed in your online
business. Use the scale below as a guide in measuring the level of management employed in
your online business.

RATING SCALE
Range 5 4 3 2 1
Always Often Sometimes Rarely Never
Description (A) (O) (S) (R) (N)

A. PLANNING
Statements pertaining to Planning 5 4 3 2 1
1 I set goals and objectives, and create a flexible action plan
to achieve for my online business
2 I identify in advance what needs to be done and the
necessary resources to implement the plan
3 I forecast my target monthly sales quota
4 I craft strategies to gain competitive advantage and lessen
threats of competition
5 I make use of alternative course of action in achieving the
set goals and objectives

B. ORGANIZING
Statements pertaining to Organizing 5 4 3 2 1
1 I delegate tasks and responsibilities
2 I identify activities that needs to be performed
3 I establish a business operation work process and structure
to follow (from receiving an order to packing and then
delivery)
4 I make sure that every process is coordinated
5 I properly allocate the resources across the business
operation
 137

Page 6 of 6

C. CONTROLLING
Statements pertaining to Controlling 5 4 3 2 1
1 I establish performance/output standards
2 I compare actual performance against standards
3 I make use of corrective actions when necessary
4 I make sure that tasks are accomplished effectively and
efficiently
5 I make necessary adjustments in the operations along the
way

END OF SURVEY QUESTIONNAIRE

Thank you for taking your time and helping us out by answering the survey questionnaires.
We hope for the success of your online business. God bless and stay safe.
Sincerely,
The Researchers
 138

Appendix D

Reliability Statistics using Cronbach’s Alpha

Pilot Testing Reliability Statistics

Reliability Statistics
Cronbach's
Alpha Based on
Cronbach's Standardized
Alpha Items N of Items
.924 .907 35

Post Hoc Test Reliability Statistics

Reliability Statistics
Cronbach's
Alpha Based on
Cronbach's Standardized
Alpha Items N of Items
.949 .953 35
 139

Appendix E

Pearson R Correlation

Correlations
OMGT REC FSPrep MBFIN FTAX
OMGT Pearson Correlation 1 .600** .542** .584** .265**
Sig. (2-tailed) .000 .000 .000 .000
N 213 213 213 213 213
REC Pearson Correlation .600** 1 .585** .621** .257**
Sig. (2-tailed) .000 .000 .000 .000
N 213 213 213 213 213
FSPrep Pearson Correlation .542** .585** 1 .429** .493**
Sig. (2-tailed) .000 .000 .000 .000
N 213 213 213 213 213
MBFIN Pearson Correlation .584** .621** .429** 1 .179**
Sig. (2-tailed) .000 .000 .000 .009
N 213 213 213 213 213
FTAX Pearson Correlation .265** .257** .493** .179** 1
Sig. (2-tailed) .000 .000 .000 .009
N 213 213 213 213 213
**. Correlation is significant at the 0.01 level (2-tailed).
 140

Appendix F

Multiple Regression Analysis

Correlations
OMGT REC FSPrep MBFIN FTAX
Pearson Correlation OMGT 1.000 .600 .542 .584 .265
REC .600 1.000 .585 .621 .257
FSPrep .542 .585 1.000 .429 .493
MBFIN .584 .621 .429 1.000 .179
FTAX .265 .257 .493 .179 1.000
Sig. (1-tailed) OMGT . .000 .000 .000 .000
REC .000 . .000 .000 .000
FSPrep .000 .000 . .000 .000
MBFIN .000 .000 .000 . .005
FTAX .000 .000 .000 .005 .
N OMGT 213 213 213 213 213
REC 213 213 213 213 213
FSPrep 213 213 213 213 213
MBFIN 213 213 213 213 213
FTAX 213 213 213 213 213

Variables Entered/Removeda
Model Variables Entered Variables Removed Method
1 REC . Stepwise (Criteria: Probability-of-F-to-
enter <= .050, Probability-of-F-to-
remove >= .100).

2 MBFIN . Stepwise (Criteria: Probability-of-F-to-

enter <= .050, Probability-of-F-to-
remove >= .100).

3 FSPrep . Stepwise (Criteria: Probability-of-F-to-

enter <= .050, Probability-of-F-to-
remove >= .100).

a. Dependent Variable: OMGT

 141

Model Summaryd
Std. Error Change Statistics
Mod R Adjusted of the R Square F Sig. F Durbin-
el R Square R Square Estimate Change Change df1 df2 Change Watson
1 .600a .360 .357 .54654 .360 118.82 1 211 .000
9
2 .658b .433 .428 .51569 .073 26.997 1 210 .000

3 .690c .477 .469 .49669 .043 17.371 1 209 .000 1.772

a. Predictors: (Constant), REC

b. Predictors: (Constant), REC, MBFIN
c. Predictors: (Constant), REC, MBFIN, FSPrep
d. Dependent Variable: OMGT

ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 35.494 1 35.494 118.829 .000b
Residual 63.026 211 .299
Total 98.520 212
2 Regression 42.674 2 21.337 80.233 .000c
Residual 55.847 210 .266
Total 98.520 212
3 Regression 46.959 3 15.653 63.449 .000d
Residual 51.561 209 .247
Total 98.520 212
a. Dependent Variable: OMGT
b. Predictors: (Constant), REC
c. Predictors: (Constant), REC, MBFIN
d. Predictors: (Constant), REC, MBFIN, FSPrep
 142

Coefficientsa
Standardiz
ed
Unstandardized Coefficient Collinearity
Coefficients s Correlations Statistics
Zero- Toleran
Model B Std. Error Beta t Sig. order Partial Part ce VIF
1 (Consta 2.103 .184 11.455 .000
nt)
REC .482 .044 .600 10.901 .000 .600 .600 .600 1.000 1.000
2 (Consta 1.478 .211 7.006 .000
nt)
REC .310 .053 .386 5.824 .000 .600 .373 .303 .614 1.629
MBFIN .310 .060 .345 5.196 .000 .584 .338 .270 .614 1.629
3 (Consta 1.641 .207 7.932 .000
nt)
REC .203 .057 .252 3.525 .001 .600 .237 .176 .490 2.042
MBFIN .285 .058 .317 4.939 .000 .584 .323 .247 .608 1.646
FSPrep .132 .032 .258 4.168 .000 .542 .277 .209 .651 1.536
a. Dependent Variable: OMGT

Collinearity Diagnosticsa
Variance Proportions
Model Dimension Eigenvalue Condition Index (Constant) REC MBFIN FSPrep
1 1 1.979 1.000 .01 .01
2 .021 9.702 .99 .99
2 1 2.967 1.000 .00 .00 .00
2 .021 11.858 .73 .54 .00
3 .012 15.470 .26 .46 .99
3 1 3.861 1.000 .00 .00 .00 .01
2 .109 5.939 .04 .00 .01 .76
3 .017 15.028 .76 .53 .04 .22
4 .012 17.692 .19 .46 .95 .01
a. Dependent Variable: OMGT
143
 144

Tests of Normality
Kolmogorov-Smirnova Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
Standardized Residual .057 213 .091 .985 213 .027
a. Lilliefors Significance Correction
145
 146

Appendix G

Split Validation

Split Sample 1 with N of 103

Descriptive Statistics
Mean Std. Deviation N
MGT 4.0492 .68707 103
REC 4.0136 .88085 103
FSPrep 2.8019 1.36640 103
MBFIN 4.2408 .78434 103
FTAX 2.0291 1.47832 103

Model Summaryd
Change Statistics
Std. Error F
Mod R Adjusted of the R Square Chang Sig. F Durbin-
el R Square R Square Estimate Change e df1 df2 Change Watson
1 .611a .373 .367 .54671 .373 60.100 1 101 .000

2 .646b .417 .405 .52981 .044 7.544 1 100 .007

3 .671c .451 .434 .51694 .034 6.040 1 99 .016 2.020

a. Predictors: (Constant), REC

b. Predictors: (Constant), REC, FSPrep
c. Predictors: (Constant), REC, FSPrep, MBFIN
d. Dependent Variable: MGT
 147

Split Sample 1 with N of 110

Descriptive Statistics
Mean Std. Deviation N
MGT 4.0745 .67955 110
REC 4.1091 .81843 110
FSPrep 2.9564 1.31089 110
MBFIN 4.3000 .73435 110
FTAX 2.0436 1.42001 110

Model Summaryc

Std. Error Change Statistics

Mod R Adjusted R of the R Square F Sig. F Durbin-
el R Square Square Estimate Change Change df1 df2 Change Watson
1 .654a .427 .422 .51667 .427 80.556 1 108 .000

2 .709b .503 .494 .48341 .076 16.375 1 107 .000 1.513

a. Predictors: (Constant), MBFIN

b. Predictors: (Constant), MBFIN, FSPrep

c. Dependent Variable: MGT

 148

Appendix H

Type of Business and Number of Years in Operation on the Relationship of Recording

and Overall Management

Run MATRIX procedure:

***************** PROCESS Procedure for SPSS Version 4.0 *****************

Written by Andrew F. Hayes, Ph.D. www.afhayes.com

Documentation available in Hayes (2022). www.guilford.com/p/hayes3

**************************************************************************
Model : 2
Y : MGT
X : REC
W : TBus
Z : YRS

Sample
Size: 213

Coding of categorical W variable for analysis:

TBus W1 W2
.000 .000 .000
1.000 1.000 .000
2.000 .000 1.000

Coding of categorical Z variable for analysis:

YRS Z1 Z2 Z3 Z4
.000 .000 .000 .000 .000
1.000 1.000 .000 .000 .000
2.000 .000 1.000 .000 .000
3.000 .000 .000 1.000 .000
4.000 .000 .000 .000 1.000

**************************************************************************
OUTCOME VARIABLE:
MGT

Model Summary
R R-sq MSE F df1 df2 p
.6518 .4248 .2848 11.3066 13.0000 199.0000 .0000

Model
coeff se t p LLCI ULCI
constant 4.0767 .0936 43.5573 .0000 3.8921 4.2612
REC .4001 .0931 4.2964 .0000 .2164 .5837
W1 -.1664 .0907 -1.8355 .0679 -.3453 .0124
W2 -.1967 .1388 -1.4169 .1581 -.4705 .0770
Int_1 .2436 .0987 2.4690 .0144 .0490 .4382
Int_2 .1273 .1484 .8577 .3921 -.1654 .4200
Z1 .1717 .0830 2.0676 .0400 .0079 .3355
Z2 .2019 .1158 1.7431 .0829 -.0265 .4303
Z3 .3327 .2153 1.5451 .1239 -.0919 .7573
 149

Z4 .4615 .2759 1.6729 .0959 -.0825 1.0055

Int_3 -.0833 .1020 -.8167 .4151 -.2844 .1178
Int_4 -.1980 .1372 -1.4429 .1506 -.4686 .0726
Int_5 -.1573 .2334 -.6738 .5012 -.6176 .3030
Int_6 -.1661 .2095 -.7929 .4288 -.5792 .2470

Product terms key:

Int_1 : REC x W1
Int_2 : REC x W2
Int_3 : REC x Z1
Int_4 : REC x Z2
Int_5 : REC x Z3
Int_6 : REC x Z4

Test(s) of highest order unconditional interaction(s):

R2-chng F df1 df2 p
X*W .0178 3.0824 2.0000 199.0000 .0480
X*Z .0075 .6477 4.0000 199.0000 .6291
BOTH .0255 1.4689 6.0000 199.0000 .1906
----------
Focal predict: REC (X)
Mod var: TBus (W)
Mod var: YRS (Z)

Conditional effects of the focal predictor at values of the moderator(s):

TBus YRS Effect se t p LLCI ULCI

.0000 .0000 .4001 .0931 4.2964 .0000 .2164 .5837
.0000 1.0000 .3168 .1014 3.1225 .0021 .1167 .5168
.0000 2.0000 .2021 .1392 1.4516 .1482 -.0724 .4766
.0000 3.0000 .2428 .2294 1.0583 .2912 -.2096 .6952
.0000 4.0000 .2340 .2057 1.1374 .2567 -.1717 .6396
1.0000 .0000 .6437 .0779 8.2639 .0000 .4901 .7972
1.0000 1.0000 .5604 .0843 6.6511 .0000 .3942 .7265
1.0000 2.0000 .4457 .1223 3.6438 .0003 .2045 .6868
1.0000 3.0000 .4864 .2281 2.1323 .0342 .0366 .9362
1.0000 4.0000 .4776 .2053 2.3264 .0210 .0728 .8824
2.0000 .0000 .5274 .1417 3.7218 .0003 .2479 .8068
2.0000 1.0000 .4441 .1305 3.4032 .0008 .1868 .7014
2.0000 2.0000 .3294 .1636 2.0131 .0455 .0067 .6520
2.0000 3.0000 .3701 .2449 1.5113 .1323 -.1128 .8530
2.0000 4.0000 .3613 .2204 1.6391 .1028 -.0734 .7959

Data for visualizing the conditional effect of the focal predictor:

Paste text below into a SPSS syntax window and execute to produce plot.

DATA LIST FREE/

REC TBus YRS MGT .
BEGIN DATA.
-.8485 .0000 .0000 3.7372
.0000 .0000 .0000 4.0767
.8485 .0000 .0000 4.4161
-.8485 .0000 1.0000 3.9796
.0000 .0000 1.0000 4.2484
.8485 .0000 1.0000 4.5171
-.8485 .0000 2.0000 4.1071
.0000 .0000 2.0000 4.2786
.8485 .0000 2.0000 4.4500
-.8485 .0000 3.0000 4.2033
.0000 .0000 3.0000 4.4094
 150

.8485 .0000 3.0000 4.6154

-.8485 .0000 4.0000 4.3397
.0000 .0000 4.0000 4.5382
.8485 .0000 4.0000 4.7367
-.8485 1.0000 .0000 3.3641
.0000 1.0000 .0000 3.9102
.8485 1.0000 .0000 4.4564
-.8485 1.0000 1.0000 3.6065
.0000 1.0000 1.0000 4.0819
.8485 1.0000 1.0000 4.5574
-.8485 1.0000 2.0000 3.7340
.0000 1.0000 2.0000 4.1121
.8485 1.0000 2.0000 4.4903
-.8485 1.0000 3.0000 3.8302
.0000 1.0000 3.0000 4.2429
.8485 1.0000 3.0000 4.6556
-.8485 1.0000 4.0000 3.9665
.0000 1.0000 4.0000 4.3717
.8485 1.0000 4.0000 4.7770
-.8485 2.0000 .0000 3.4325
.0000 2.0000 .0000 3.8800
.8485 2.0000 .0000 4.3275
-.8485 2.0000 1.0000 3.6749
.0000 2.0000 1.0000 4.0517
.8485 2.0000 1.0000 4.4285
-.8485 2.0000 2.0000 3.8024
.0000 2.0000 2.0000 4.0819
.8485 2.0000 2.0000 4.3614
-.8485 2.0000 3.0000 3.8986
.0000 2.0000 3.0000 4.2127
.8485 2.0000 3.0000 4.5267
-.8485 2.0000 4.0000 4.0349
.0000 2.0000 4.0000 4.3415
.8485 2.0000 4.0000 4.6480
END DATA.
GRAPH/SCATTERPLOT=
REC WITH MGT BY TBus /PANEL ROWVAR= YRS .

*********************** ANALYSIS NOTES AND ERRORS ************************

Level of confidence for all confidence intervals in output:

95.0000

NOTE: The following variables were mean centered prior to analysis:

REC

------ END MATRIX -----

 151

Appendix I

Scope of Clients on the Relationship of Recording and Overall Management

Run MATRIX procedure:

***************** PROCESS Procedure for SPSS Version 4.0 *****************

Written by Andrew F. Hayes, Ph.D. www.afhayes.com

Documentation available in Hayes (2022). www.guilford.com/p/hayes3

**************************************************************************
Model : 1
Y : MGT
X : REC
W : CLNT

Sample
Size: 213

Coding of categorical W variable for analysis:

CLNT W1 W2
.000 .000 .000
1.000 1.000 .000
2.000 .000 1.000

**************************************************************************
OUTCOME VARIABLE:
MGT

Model Summary
R R-sq MSE F df1 df2 p
.6192 .3834 .2935 25.7422 5.0000 207.0000 .0000

Model
coeff se t p LLCI ULCI
constant 3.9565 .0602 65.7515 .0000 3.8378 4.0751
REC .5249 .0702 7.4723 .0000 .3864 .6633
W1 -.0378 .3979 -.0950 .9244 -.8222 .7466
W2 .1891 .0773 2.4470 .0152 .0367 .3414
Int_1 -.0011 .5517 -.0019 .9985 -1.0888 1.0866
Int_2 -.1015 .0908 -1.1174 .2651 -.2806 .0776

Product terms key:

Int_1 : REC x W1
Int_2 : REC x W2

Test(s) of highest order unconditional interaction(s):

R2-chng F df1 df2 p
X*W .0038 .6302 2.0000 207.0000 .5335
----------
Focal predict: REC (X)
Mod var: CLNT (W)

Data for visualizing the conditional effect of the focal predictor:

 152

Paste text below into a SPSS syntax window and execute to produce plot.

DATA LIST FREE/

REC CLNT MGT .
BEGIN DATA.
-.8485 .0000 3.5111
.0000 .0000 3.9565
.8485 .0000 4.4018
-.8485 1.0000 3.4742
.0000 1.0000 3.9187
.8485 1.0000 4.3631
-.8485 2.0000 3.7863
.0000 2.0000 4.1456
.8485 2.0000 4.5048
END DATA.
GRAPH/SCATTERPLOT=
REC WITH MGT BY CLNT .

*********************** ANALYSIS NOTES AND ERRORS ************************

Level of confidence for all confidence intervals in output:

95.0000

NOTE: The following variables were mean centered prior to analysis:

REC

------ END MATRIX -----

 153

Appendix J

Type of Business and Number of Years in Operation on the Relationship of Financial

Statement Preparation and Overall Management

Run MATRIX procedure:

***************** PROCESS Procedure for SPSS Version 4.0 *****************

Written by Andrew F. Hayes, Ph.D. www.afhayes.com

Documentation available in Hayes (2022). www.guilford.com/p/hayes3

**************************************************************************
Model : 2
Y : MGT
X : FSPrep
W : TBus
Z : YRS

Sample
Size: 213

Coding of categorical W variable for analysis:

TBus W1 W2
.000 .000 .000
1.000 1.000 .000
2.000 .000 1.000

Coding of categorical Z variable for analysis:

YRS Z1 Z2 Z3 Z4
.000 .000 .000 .000 .000
1.000 1.000 .000 .000 .000
2.000 .000 1.000 .000 .000
3.000 .000 .000 1.000 .000
4.000 .000 .000 .000 1.000

**************************************************************************
OUTCOME VARIABLE:
MGT

Model Summary
R R-sq MSE F df1 df2 p
.5703 .3253 .3340 7.3796 13.0000 199.0000 .0000

Model
coeff se t p LLCI ULCI
constant 4.0452 .1028 39.3450 .0000 3.8425 4.2480
FSPrep .3133 .0780 4.0146 .0001 .1594 .4672
W1 -.0645 .1006 -.6413 .5221 -.2629 .1339
W2 -.2504 .1458 -1.7175 .0874 -.5380 .0371
Int_1 -.0072 .0773 -.0930 .9260 -.1597 .1453
Int_2 .0264 .1207 .2191 .8268 -.2115 .2644
Z1 .1655 .0901 1.8369 .0677 -.0122 .3432
Z2 .1309 .1253 1.0452 .2972 -.1161 .3779
Z3 .1822 .2504 .7276 .4677 -.3116 .6761
 154

Z4 .2309 .2774 .8324 .4062 -.3161 .7779

Int_3 -.0562 .0703 -.7993 .4251 -.1948 .0824
Int_4 -.1283 .0912 -1.4062 .1612 -.3082 .0516
Int_5 -.1191 .1716 -.6942 .4884 -.4576 .2193
Int_6 -.0945 .2095 -.4508 .6526 -.5076 .3187

Product terms key:

Int_1 : FSPrep x W1
Int_2 : FSPrep x W2
Int_3 : FSPrep x Z1
Int_4 : FSPrep x Z2
Int_5 : FSPrep x Z3
Int_6 : FSPrep x Z4

Test(s) of highest order unconditional interaction(s):

R2-chng F df1 df2 p
X*W .0003 .0504 2.0000 199.0000 .9509
X*Z .0081 .5997 4.0000 199.0000 .6633
BOTH .0085 .4173 6.0000 199.0000 .8670
----------
Focal predict: FSPrep (X)
Mod var: TBus (W)
Mod var: YRS (Z)

Data for visualizing the conditional effect of the focal predictor:

Paste text below into a SPSS syntax window and execute to produce plot.

DATA LIST FREE/

FSPrep TBus YRS MGT .
BEGIN DATA.
-1.3371 .0000 .0000 3.6263
.0000 .0000 .0000 4.0452
1.3371 .0000 .0000 4.4642
-1.3371 .0000 1.0000 3.8669
.0000 .0000 1.0000 4.2107
1.3371 .0000 1.0000 4.5546
-1.3371 .0000 2.0000 3.9288
.0000 .0000 2.0000 4.1762
1.3371 .0000 2.0000 4.4235
-1.3371 .0000 3.0000 3.9678
.0000 .0000 3.0000 4.2275
1.3371 .0000 3.0000 4.4871
-1.3371 .0000 4.0000 3.9835
.0000 .0000 4.0000 4.2761
1.3371 .0000 4.0000 4.5688
-1.3371 1.0000 .0000 3.5714
.0000 1.0000 .0000 3.9807
1.3371 1.0000 .0000 4.3900
-1.3371 1.0000 1.0000 3.8120
.0000 1.0000 1.0000 4.1462
1.3371 1.0000 1.0000 4.4804
-1.3371 1.0000 2.0000 3.8739
.0000 1.0000 2.0000 4.1116
1.3371 1.0000 2.0000 4.3494
-1.3371 1.0000 3.0000 3.9129
.0000 1.0000 3.0000 4.1630
1.3371 1.0000 3.0000 4.4130
 155

-1.3371 1.0000 4.0000 3.9286

.0000 1.0000 4.0000 4.2116
1.3371 1.0000 4.0000 4.4947
-1.3371 2.0000 .0000 3.3405
.0000 2.0000 .0000 3.7948
1.3371 2.0000 .0000 4.2491
-1.3371 2.0000 1.0000 3.5811
.0000 2.0000 1.0000 3.9603
1.3371 2.0000 1.0000 4.3395
-1.3371 2.0000 2.0000 3.6430
.0000 2.0000 2.0000 3.9257
1.3371 2.0000 2.0000 4.2084
-1.3371 2.0000 3.0000 3.6821
.0000 2.0000 3.0000 3.9770
1.3371 2.0000 3.0000 4.2720
-1.3371 2.0000 4.0000 3.6977
.0000 2.0000 4.0000 4.0257
1.3371 2.0000 4.0000 4.3537
END DATA.
GRAPH/SCATTERPLOT=
FSPrep WITH MGT BY TBus /PANEL ROWVAR= YRS .

*********************** ANALYSIS NOTES AND ERRORS ************************

Level of confidence for all confidence intervals in output:

95.0000

NOTE: The following variables were mean centered prior to analysis:

FSPrep

------ END MATRIX -----

 156

Appendix K

Scope of Clients on the Relationship of Recording and Overall Management

Run MATRIX procedure:

***************** PROCESS Procedure for SPSS Version 4.0 *****************

Written by Andrew F. Hayes, Ph.D. www.afhayes.com

Documentation available in Hayes (2022). www.guilford.com/p/hayes3

**************************************************************************
Model : 1
Y : MGT
X : FSPrep
W : CLNT

Sample
Size: 213

Coding of categorical W variable for analysis:

CLNT W1 W2
.000 .000 .000
1.000 1.000 .000
2.000 .000 1.000

**************************************************************************
OUTCOME VARIABLE:
MGT

SINGULAR OR NEAR SINGULAR DATA MATRIX.

*********************** ANALYSIS NOTES AND ERRORS ************************

ERROR: A linear or near linear dependency (singularity) exists in the

data.

------ END MATRIX -----

 157

Appendix L

Type of Business and Number of Years in Operation on the Relationship of Monitoring

of Business Finances and Overall Management

Run MATRIX procedure:

***************** PROCESS Procedure for SPSS Version 4.0 *****************

Written by Andrew F. Hayes, Ph.D. www.afhayes.com

Documentation available in Hayes (2022). www.guilford.com/p/hayes3

**************************************************************************
Model : 2
Y : MGT
X : MBFIN
W : TBus
Z : YRS

Sample
Size: 213

Coding of categorical W variable for analysis:

TBus W1 W2
.000 .000 .000
1.000 1.000 .000
2.000 .000 1.000

Coding of categorical Z variable for analysis:

YRS Z1 Z2 Z3 Z4
.000 .000 .000 .000 .000
1.000 1.000 .000 .000 .000
2.000 .000 1.000 .000 .000
3.000 .000 .000 1.000 .000
4.000 .000 .000 .000 1.000

**************************************************************************
OUTCOME VARIABLE:
MGT

Model Summary
R R-sq MSE F df1 df2 p
.6642 .4411 .2767 12.0816 13.0000 199.0000 .0000

Model
coeff se t p LLCI ULCI
constant 4.1281 .0924 44.6783 .0000 3.9459 4.3103
MBFIN .4712 .1346 3.5010 .0006 .2058 .7365
W1 -.2101 .0897 -2.3428 .0201 -.3870 -.0333
W2 -.1381 .1396 -.9894 .3237 -.4133 .1371
Int_1 .2996 .1342 2.2317 .0268 .0349 .5643
Int_2 .1462 .1682 .8693 .3857 -.1855 .4780
Z1 .1337 .0826 1.6180 .1072 -.0293 .2967
Z2 .1415 .1143 1.2381 .2171 -.0839 .3670
 158

Z3 .2613 .2119 1.2335 .2188 -.1564 .6791

Z4 .4352 .2890 1.5058 .1337 -.1347 1.0052
Int_3 -.2945 .1214 -2.4256 .0162 -.5338 -.0551
Int_4 -.0586 .1613 -.3633 .7168 -.3767 .2595
Int_5 -.0451 .3075 -.1465 .8836 -.6514 .5613
Int_6 -.2990 .2062 -1.4497 .1487 -.7056 .1077

Product terms key:

Int_1 : MBFIN x W1
Int_2 : MBFIN x W2
Int_3 : MBFIN x Z1
Int_4 : MBFIN x Z2
Int_5 : MBFIN x Z3
Int_6 : MBFIN x Z4

Test(s) of highest order unconditional interaction(s):

R2-chng F df1 df2 p
X*W .0146 2.5958 2.0000 199.0000 .0771
X*Z .0195 1.7386 4.0000 199.0000 .1429
BOTH .0534 3.1717 6.0000 199.0000 .0054
----------
Focal predict: MBFIN (X)
Mod var: TBus (W)
Mod var: YRS (Z)

Conditional effects of the focal predictor at values of the moderator(s):

TBus YRS Effect se t p LLCI ULCI

.0000 .0000 .4712 .1346 3.5010 .0006 .2058 .7365
.0000 1.0000 .1767 .1400 1.2618 .2085 -.0994 .4528
.0000 2.0000 .4126 .1772 2.3286 .0209 .0632 .7619
.0000 3.0000 .4261 .3077 1.3847 .1677 -.1807 1.0329
.0000 4.0000 .1722 .1718 1.0023 .3174 -.1666 .5109
1.0000 .0000 .7707 .0787 9.7905 .0000 .6155 .9259
1.0000 1.0000 .4763 .1059 4.4988 .0000 .2675 .6850
1.0000 2.0000 .7121 .1466 4.8565 .0000 .4230 1.0013
1.0000 3.0000 .7257 .3045 2.3831 .0181 .1252 1.3261
1.0000 4.0000 .4717 .2046 2.3059 .0221 .0683 .8752
2.0000 .0000 .6174 .1510 4.0895 .0001 .3197 .9151
2.0000 1.0000 .3229 .1237 2.6112 .0097 .0791 .5668
2.0000 2.0000 .5588 .1905 2.9327 .0038 .1831 .9345
2.0000 3.0000 .5723 .3074 1.8621 .0641 -.0338 1.1784
2.0000 4.0000 .3184 .2182 1.4593 .1461 -.1119 .7487

Data for visualizing the conditional effect of the focal predictor:

Paste text below into a SPSS syntax window and execute to produce plot.

DATA LIST FREE/

MBFIN TBus YRS MGT .
BEGIN DATA.
-.7577 .0000 .0000 3.7711
.0000 .0000 .0000 4.1281
.7286 .0000 .0000 4.4714
-.7577 .0000 1.0000 4.1279
.0000 .0000 1.0000 4.2618
.7286 .0000 1.0000 4.3906
-.7577 .0000 2.0000 3.9570
.0000 .0000 2.0000 4.2696
.7286 .0000 2.0000 4.5702
-.7577 .0000 3.0000 4.0666
 159

.0000 .0000 3.0000 4.3894

.7286 .0000 3.0000 4.6999
-.7577 .0000 4.0000 4.4329
.0000 .0000 4.0000 4.5633
.7286 .0000 4.0000 4.6888
-.7577 1.0000 .0000 3.3340
.0000 1.0000 .0000 3.9180
.7286 1.0000 .0000 4.4795
-.7577 1.0000 1.0000 3.6908
.0000 1.0000 1.0000 4.0517
.7286 1.0000 1.0000 4.3987
-.7577 1.0000 2.0000 3.5199
.0000 1.0000 2.0000 4.0595
.7286 1.0000 2.0000 4.5784
-.7577 1.0000 3.0000 3.6294
.0000 1.0000 3.0000 4.1793
.7286 1.0000 3.0000 4.7080
-.7577 1.0000 4.0000 3.9957
.0000 1.0000 4.0000 4.3532
.7286 1.0000 4.0000 4.6969
-.7577 2.0000 .0000 3.5222
.0000 2.0000 .0000 3.9900
.7286 2.0000 .0000 4.4399
-.7577 2.0000 1.0000 3.8790
.0000 2.0000 1.0000 4.1237
.7286 2.0000 1.0000 4.3590
-.7577 2.0000 2.0000 3.7081
.0000 2.0000 2.0000 4.1315
.7286 2.0000 2.0000 4.5387
-.7577 2.0000 3.0000 3.8176
.0000 2.0000 3.0000 4.2513
.7286 2.0000 3.0000 4.6683
-.7577 2.0000 4.0000 4.1839
.0000 2.0000 4.0000 4.4252
.7286 2.0000 4.0000 4.6572
END DATA.
GRAPH/SCATTERPLOT=
MBFIN WITH MGT BY TBus /PANEL ROWVAR= YRS .

*********************** ANALYSIS NOTES AND ERRORS ************************

Level of confidence for all confidence intervals in output:

95.0000

NOTE: The following variables were mean centered prior to analysis:

MBFIN

------ END MATRIX -----

 160

Appendix M

Scope of Clients on the Relationship of Monitoring of Business Finances and Overall

Management

Run MATRIX procedure:

***************** PROCESS Procedure for SPSS Version 4.0 *****************

Written by Andrew F. Hayes, Ph.D. www.afhayes.com

Documentation available in Hayes (2022). www.guilford.com/p/hayes3

**************************************************************************
Model : 1
Y : MGT
X : MBFIN
W : CLNT

Sample
Size: 213

Coding of categorical W variable for analysis:

CLNT W1 W2
.000 .000 .000
1.000 1.000 .000
2.000 .000 1.000

**************************************************************************
OUTCOME VARIABLE:
MGT

Model Summary
R R-sq MSE F df1 df2 p
.6475 .4193 .2764 29.8883 5.0000 207.0000 .0000

Model
coeff se t p LLCI ULCI
constant 3.9619 .0581 68.1514 .0000 3.8473 4.0766
MBFIN .8022 .0844 9.5027 .0000 .6358 .9687
W1 -.1496 .3769 -.3970 .6918 -.8926 .5934
W2 .2027 .0747 2.7155 .0072 .0555 .3499
Int_1 -.0689 .7483 -.0921 .9267 -1.5441 1.4063
Int_2 -.4361 .1027 -4.2457 .0000 -.6387 -.2336

Product terms key:

Int_1 : MBFIN x W1
Int_2 : MBFIN x W2

Test(s) of highest order unconditional interaction(s):

R2-chng F df1 df2 p
X*W .0508 9.0589 2.0000 207.0000 .0002
----------
Focal predict: MBFIN (X)
Mod var: CLNT (W)
 161

Conditional effects of the focal predictor at values of the moderator(s):

CLNT Effect se t p LLCI ULCI

.0000 .8022 .0844 9.5027 .0000 .6358 .9687
1.0000 .7333 .7435 .9863 .3251 -.7325 2.1991
2.0000 .3661 .0585 6.2552 .0000 .2507 .4815

Data for visualizing the conditional effect of the focal predictor:

Paste text below into a SPSS syntax window and execute to produce plot.

DATA LIST FREE/

MBFIN CLNT MGT .
BEGIN DATA.
-.7577 .0000 3.3541
.0000 .0000 3.9619
.7286 .0000 4.5465
-.7577 1.0000 3.2567
.0000 1.0000 3.8123
.7286 1.0000 4.3467
-.7577 2.0000 3.8873
.0000 2.0000 4.1647
.7286 2.0000 4.4314
END DATA.
GRAPH/SCATTERPLOT=
MBFIN WITH MGT BY CLNT .

*********************** ANALYSIS NOTES AND ERRORS ************************

Level of confidence for all confidence intervals in output:

95.0000

NOTE: The following variables were mean centered prior to analysis:

MBFIN

------ END MATRIX -----

 162

Appendix N

Raw Data Set of the 213 Respondents

163
164
165
 166

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