The Impact of Budgetary Control on Financial Performance: Evidence from SMEs in Ghana

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Lordwin Paa Kwesi Archer
Lordwin Paa Kwesi Archer
1 Kwame Nkrumah University of Science and Technology

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Small and medium-scale enterprises (SMEs) are important players in Ghana’s economic growth but are often prone to financial volatility due to ineffective financial management systems. The study investigates the influence of budgeting control practices on financial performance of SMEs, guided by agency and goal-setting theories. Drawing on a crosssectional survey of 200 SMEs, four dimensions of budgetary control formal budgets, review frequency, participative budgeting, and variance analysis were examined. Findings show that formal budgets, regular review, and participative budgeting significantly influence financial performance, while variance analysis doesn’t significantly influence financial performance. Managerial capacity and firm size mediate the relationships. The research concludes that effective budgetary control increases profitability and sustainability and recommends capacity building and flexible budgeting models to improve SME financial management in Ghana.

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No external funding was declared for this work.

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The authors declare no conflict of interest.

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No ethics committee approval was required for this article type.

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Lordwin Paa Kwesi Archer. 2026. \u201cThe Impact of Budgetary Control on Financial Performance: Evidence from SMEs in Ghana\u201d. Global Journal of Management and Business Research - A: Administration & Management GJMBR A Volume 25 (GJMBR Volume 25 Issue A6): .

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GJMBR Volume 25 Issue A6
Pg. 35- 43
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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November 11, 2025

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English

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Small and medium-scale enterprises (SMEs) are important players in Ghana’s economic growth but are often prone to financial volatility due to ineffective financial management systems. The study investigates the influence of budgeting control practices on financial performance of SMEs, guided by agency and goal-setting theories. Drawing on a crosssectional survey of 200 SMEs, four dimensions of budgetary control formal budgets, review frequency, participative budgeting, and variance analysis were examined. Findings show that formal budgets, regular review, and participative budgeting significantly influence financial performance, while variance analysis doesn’t significantly influence financial performance. Managerial capacity and firm size mediate the relationships. The research concludes that effective budgetary control increases profitability and sustainability and recommends capacity building and flexible budgeting models to improve SME financial management in Ghana.

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The Impact of Budgetary Control on Financial Performance: Evidence from SMEs in Ghana

Lordwin Paa Kwesi Archer
Lordwin Paa Kwesi Archer Kwame Nkrumah University of Science and Technology

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