BUDGETING AND COMPANY PERFORMANCE OF SMES IN MALAYSIA

Abstract

The Small and Medium Enterprises (SMEs) becoming important contributor to the country’s future development because of continuously developing the economy and strengthen current industry. The Malaysian government has spent millions of dollars
with varieties of program to ensure the expansion and growth of SMEs locally and internationally. In order to continuously developing among the company performance of SMEs, it is crucial to identify the factors which have been influencing the company performance of SMEs. Therefore, the aim of this research is to study the relationship between the budgeting and company performance of SMEs in Malaysia. Aframework is designed to study company performance of SMEs across Klang Valley
by distributing questionnaires to the owners and the management level of SMEs through convenience sampling. The result shows that budgeting control and budgeting sophistication has significant relationship with company performance. This result is supported by other researchers or scholars who have study in these two variables. However, budgeting process found to be insignificant relationship with company performance. This is an interesting finding where the sample shows an insignificant relationship, therefore it is suggested in the future research or an indepth research to be done for budgeting process in Malaysia. Eventually, this could be a guideline for the SMEs to ensure the budgeting is well organized and utilized which could increase the sales revenue and profit of the business.