Computerized Accounting System as an Aid to Effective Financial Reporting in Small and Medium Scale Food and Beverage Firms in Southwestern Nigeria

Most Small and Medium Scale Enterprises (SMEs) fail due to the lack of keeping proper financial records. To forestall this problem, many studies have recommended the use of Computerized Accounting Systems (CAS) among SMEs. This chapter examines the level, type and reasons for adopting CAS among SMEs in Nigeria. The study was conducted among 229 SMEs in the Food and Beverage sector in Southwestern Nigeria and revealed that most (87.7%) adopted a form of CAS. About 23% adopted non-dedicated software (Microsoft Excel) while 17.9%, 13.1%, 15.7% and 12.2% adopted Financial Management software such as Peachtree, Dac Easy, Sage and Quickbooks respectively. About 9% adopted Tally and 3.8% each utilized Chronicle and Power of Accounting. Majority (58.5%) used both manual and computerized systems. Majority (77.7%) of the respondents indicated that they used batch posting system while 22.3% of the respondents used real-time posting. The batch posting system is prone to entry errors. About 94% adopted CAS to aid financial decision making, 90.8% for improved financial reports and 93.4% to aid overall management decision making. Ninety three percent agreed that adoption of CAS had a positive impact on firm performance. The chapter recommended SMEs fully computerize their accounting systems and those on Excel should use dedicated financial management software among others.