Abstract:
Small and medium enterprises are becoming increasingly important in terms of job creation globally. This
study sought to establish the relationship between record keeping practices and SMEs performance in Uasin
Gishu County. The study was guided by following research question: What is the relationship between
record keeping practices and performance of SMEs? The study was guided by Entrepreneurial Potential
Model. The target population was1200 and sample size of 300registered SMEs owners in Uasin Gishu
County. Ex post facto research design was used. Data was collected using structured questionnaires. Test of
reliability and validity of instruments was done at Alpha>0.7. Descriptive statistics was used to determine
frequencies, percentages, means and standard deviation. Inferential statistics employed Pearson correlation
and regression analysis to assess the relationship, the effect and to test the hypothesis at p<= 0.05.Findings
on record keeping practices revealed that the organization yielded lowest positive unit increase of β =
0.031. Findings show a positive influence on the performance of SMEs. The null hypothesis was accepted
that SMEs record keeping practices has no significant effect on performance of SMEs. This study
recommends that SMEs owners enhance the training on calculation of interest rate and need to have the
reporting and analyzing skills. The study concluded that in order for SMEs to perform, there has to be an
investment on financial management practices particularly financial reporting and analysis by
stakeholders’ especially financial institutions.
