Analyzing Business Financial Accounting and Management Systems of Indigenous Businesses: A Case Study of Lusaka

This study focuses on analyzing business financial accounting and management systems of indigenous businesses in Lusaka. The main objective was to assess the importance and implementation of financial accounting and management practices in these businesses. Data was collected through a questionnaire from a sample of 60 firms in Lusaka, Zambia. The findings revealed that a significant majority (approximately 95%) of the respondents maintained financial records for their businesses, highlighting the importance of this aspect in their operations and showcasing their commitment to financial diligence and responsibility. Businesses with higher financial literacy levels were more likely to adopt technology, implement better accounting practices, and achieve improved financial performance. However, attention must be given to the minority (approximately 5%) of businesses that reported not keeping financial records, as this may affect their financial stability and credibility. Encouraging them to adopt better financial practices through educational programs is crucial. Regarding budgeting practices, businesses tended to conduct less frequent budget reviews, with a smaller percentage opting for monthly reviews. Encouraging businesses to diversify their expense tracking methods, including using accounting software, can improve financial monitoring. The study highlights the significance of maintaining proper financial records for informed decision-making, compliance with legal requirements, and overall financial transparency. Additionally, it emphasizes the positive impact of financial literacy on various aspects of business performance and practices. The findings on business management systems indicate a wide range of opinions among respondents. While satisfaction levels were generally high, some expressed poor satisfaction, indicating room for improvement. Ongoing monitoring and enhancements to these systems can foster better operational efficiency. Furthermore, correlation analyses emphasize the importance of financial literacy in achieving positive outcomes in technology adoption, accounting practices, financial performance, and management strategies. To improve financial accounting and management practices among businesses in Lusaka, recommendations include promoting financial literacy, encouraging financial record-keeping, supporting technology adoption, implementing regular budget reviews, diversifying expense tracking methods, addressing challenges through training and support, continuously improving business management systems, fostering collaboration, supporting access to financial capital, and considering policy frameworks to incentivize best financial practices.