This work investigated accounting practices and the performance of Small and Medium Scale enterprises in Rivers state with the aim of finding the relationships between record keeping, payroll accounting and budgeting practices and the effectiveness and efficiency of Small and Medium Scale enterprises. In order to achieve the objectives of the study, six hypotheses were proposed and data collected through the issue of structured questionnaires to the staff of SMEs. The Spearman rank correlation was used for analysis with the aid of the Statistical Package for Social Science (SPSS). The findings revealed a weak positive relationship between record keeping practices, payroll accounting practices and budgeting practices of SMEs and their effectiveness and efficiency. Also the study found that there were no significant relationships between the record keeping practices, payroll accounting practices and the budgeting practices of SMEs and their effectiveness and efficiency. The study concluded as follows "that the accounting practices of SMEs in Rivers state are sub-standard and that this was one of the causes of their poor performances." Also that proper payroll accounting practices helps to improve the efficiency and effectiveness of SMEs in Nigeria likewise budgeting practices contributes positively to the efficiency and effectiveness of SMEs. Finally, we conclude that despite the positive effect of accounting practices on SMEs, their performance remain sub-optimal.
Among others, it was recommended that SMEs should make efforts to adopt and maintain proper and adequate accounting systems. Proper record financial keeping improves the effectiveness and efficiency of SMEs. Also, SMEs need to adopt a comprehensive accounting system that will cover all aspects of the business. SMEs also need to employ qualified accounting personnel and provide them with adequate training and equipment. Finally, it is recommended that regulatory bodies of the accounting profession should carry out sensitization programmes that are targeted at SMEs on the need for them to adopt and maintain proper and adequate accounting system in the business.