Management Accounting and Profitability in Private Healthcare SMEs

Abstract

The purpose of this article is to examine the management control practices in small and medium-sized health care enterprises (SMEs). Previous studies suggest that there are often few, if any, comprehensive management control systems (MCS) or there is lack of systematic management accounting or performance management (PM) monitoring in even fairly large SMEs. The first contribution of this article is to present nine years of financial data of micro companies. The data itself is quite unique and not open data for everyone. On one hand, it gives further information about diverse and complex combinations of the profitability process in the small companies and how the MA systems affect it. Based on the contingency theory conception, this article finds that the management accounting practices such as a budgeting system or increased cost knowledge of the company influence the company's performance. Further, some of the contextual factors such as size and age of the company affected the company's performance in this study.