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Nairobi-based cloud accounting software firm Uhasibu, has launched a Project Based Accounting module which the firm says will help East African SMEs manage all their grants, donor funds and investments.
Firms can also use the new module to run their day to day accounting activities at no exta cost.
According to the firm in a statement, “The project based accounting module, will help them keep track of income and expenses at the project/ grant level. The funded company simply declares in its books a project which would then represent the donor and under this project, they register the exact amount of money they have received from the donor as well as register any expenses that they incur while using the funding. Eventually, the company generates a report that includes ONLY details of the funding they received from the specific donor without affecting the reporting for the entire company or affecting the reporting for any other funds they have received!”
There are thousands of SMEs in Kenya, and according to the 2012 Economic Survey, they contribute to 20% of the annual GDP and in 2011, SMEs created 445,900 new jobs which constituted 85.7% of all new jobs. However, SMEs have challenge when it comes to accounting for how their funds are spent. Some SMEs already have an accounting system but these systems only do reporting for the entire organization. This leaves the company with the task of sifting through their books to figure out which details only belong to the funding and which belong to the company in general. Woe unto any company that gets funding from several different organizations as all the reporting fast becomes a task that can be very hectic not to mention extremely expensive.
The firm expects SMEs to shift from basic accounting to project based accounting because managers in a move to give more detail about income and expenses at the project/ grant level in order to improve operations and ensure cost efficiency within the company. Uhasibu expects that reports generated from doing project based accounting will catapult the level of donor fund accountability and hopefully increase the amount of funds going around to fund SMEs.
