5.2. Conclusion
The accounting is the language of business. For that reason
it is an important area to be exploited by a business organization. It is the
process by which financial information about the business is recorded,
classified, summarized, interpreted and communicated to owners, managers and
other interested parties. For a business organization ton achieve its set
objectives, an effective accounting system is necessary. An effective
accounting system is a cornerstone for the proper management and success of
small and medium enterprises as it provides accurate information to be used in
the decision making process.
Given that every business entity needs to maintain books of
accounts in an orderly and timely basis, prepares financial statements and
presents them to stakeholders, the academic enquiry was conducted on the
accounting system used in small and medium enterprises to assess the
effectiveness and efficiency of their accounting system, whether it complies
with GAAP and identify the weaknesses.
The research shows that the accounting system of Inyange
industries is neither effective nor efficient enough to guarantee the proper
management of the company's business operations as regards to the weaknesses
presented by it. The accounting system of Inyange industries do not comply 100%
with the General accepted accounting principles. There are some principles that
are violated as indicated in the summary of findings.
The researcher found out that there is no proper accounting
system as there is lack of skilled labor, budget for a well design, and other
materials necessary for the smooth running of accounting system in small and
medium enterprises. Owing to benefits received from effective accounting
system, this should be designed and ran by a qualified professional accountant
as required by international accounting standards.
5.3. Recommendations
Owing to the benefits of an effective accounting system in
business success, prior to conducting an academic enquiry on the accounting
system used in small and medium enterprises in Rwanda, after analyzing and
interpreting the data from Inyange industries, based on summary of findings and
conclusion stated above and the SWOT analysis done by the researcher on the
company, the following recommendations come in to address the stated
problems:
To maintain all books of accounts and prepare financial
statements in accordance with the international accounting standards and
international financial reporting
SMEs in Rwanda should adopt the accounting plan that shows the
complete accounting cycle. They should follow the following accounting plan;
Draw the chart of accounts
Record the daily transactions in official source documents
Prepare all different types of journals
Analyze and record the daily official documents transactions
data in the journals Prepare all necessary types of ledgers
Post journal transactions data to the relative ledger
accounts
Balance the accounts to ascertain the balances brought forward
Draw up the multicolumn trial balance from the accounts balances
to test the accuracy of the ledgers
Update and adjust trial balance information with the amount
relevant to the accounting period under review
Prepare all types of financial statements (trading, profit and
loss account; balance sheet; cash flow and fund flow statements) from adjusted
trial balance
Prepare the economic and statistical reports for decision making
and future planning.
To comply with the General Accepted Accounting
Principles GAAP
The accountants of Inyange industries should take care of
GAAP while recording the business transactions and at the time of preparing the
financial statements. All accounting conversions and concepts should be duly
complied with so as to ensure that the accounting system operates in the normal
way of recording business transactions.
Regular training for employees
When accounting is done wrongly it may loose its quality of
providing the real facts of the business transactions and hence preventing
errors and frauds. Thus the accounting profession requires a solid knowledge
and experience in the accounting field. The SMEs especially Inyange industries
should includes in its budget the training expenses to train both technical and
administrative staff.
| 
