Management Accounting Tools and Trends: An Investigation of Its Usefulness and Relationship among the Philippines SMEs

Small-medium-sized enterprises (SMEs) nowadays provide an important role in the Philippines’ economy. They employ around 32% of the workforce. SME is recognized as the point for growth that will ensure that the Philippine economy moves forward despite the unfavourable global environment. They reduce poverty by creating jobs that helps to create employment opportunities and more equitable income distribution. Because businesses are being force to deal with the effects of globalization, even small and medium-sized enterprises (SMEs) need to develop relevant ideas to manage the problems, issues and challenges every day. This study describes the level of usefulness of management accounting tools (MATs) used, test the relationship of MATs used to the level of net income and capital, test of difference between and among the level of its usefulness and the difficulties encountered in applying the tools. Purposive sampling technique was used to obtain information through questionnaire survey from the owners, general managers, finance/accounting managers and accountants of the 300 small-medium-sized enterprises (SMEs) across manufacturing, wholesale and retail trade, accommodation and food service activities, financial and insurance activities and professional, scientific and technical activities established in the National Capital Region of the Philippines. Frequency and mean were used for descriptive analysis, then Spearman Rho to measure the strength and direction of association between the level of its usefulness to net income and capital and Mann-Whitney U and Kruskal Wallis test to compare the difference between and among SMEs levels of its usefulness.  The findings of the study suggest that in the present day’s business environment, operating budgets and statement of cash flow analysis for small enterprises and capital budgeting decisions, financial budgets, financial statement analysis, managing customers’ relationship and operating budgets for medium enterprise are the very useful MATs necessary to manage their business operations successfully. Likewise, the used of different kinds of analysis developed significant relationship between selected variables of size, level of net income and capital to the level of its usefulness for medium-sized enterprises and sufficient to create significant difference between and among the SMEs levels of its usefulness. Lack of qualified employees and its use are not deem necessary as to the nature and size of the enterprise operations ranked as the top barriers encountered in applying the tools. Therefore, medium firms utilized more tools than small enterprises and the appropriateness of management accounting information depends upon the operating activities, strategies and the size of the organization.