THE ROLE OF BOOKKEEPING IN THE INFORMAL SECTOR IN NATIONAL DEVELOPMENT

Abstract

The sector of the economy has been classified as formal and informal. The informal sector economy play very important role in the economic development in this country. Bookkeeping has been the back bone of every successful business. In most cases, businesses that do not keep record of their transactions do not survive. This means that bookkeeping is very instrumental in the work of the informal sector economy but it is the reverse case in the informal sector economy as many people keep single or no one at all. Bookkeeping has been relegated under this sector and many businesses do not survive. Proper bookkeeping improve organizational financial position as well as budgeting for future. The main objective of this study was to determine the level of bookkeeping under the informal sector, with emphasis on the Kumasi Central Market, in relation to national development. Population may vary in size, some small and others large. Most often to involve every member of the population in the study would be very expensive, time consuming and probably would require services of many research assistants. In view of this problem raised above, out of the population, 75 respondents were selected and questionnaire was distributed to them. The type of data collection that has been used in this work is questionnaire that was delivered by hand to each respondent and collected. The nature of the study and the academic level of the respondents made us use the structured interview known as the questionnaire. The study has revealed that the level of recording is very low under the sector and this has negative effects on their daily operations and sometimes collapse many businesses in the sector as evidenced in the authors’ field survey. The study further reviewed the social background which includes the respondents’ age, male/female ratio, sources of the respondents’ capital, and the level of their educational background. The study established that major source of the capital under the sector is their personal savings, the level of education is low, the sector has very youthful age and many women have been engaged in the sector. All this issues have been evidenced in the authors’ field survey. Apart from the level of bookkeeping under the sector, the study uncovered certain problems faced by the people under the sector. Major among these is the lack of control over cash. In conclusion, we strongly recommend that there should be an intense education for the people under the informal sector economy on the importance of bookkeeping in the day to day operations of their businesses.