Use of Cloud-Based Accounting Software: A Tool for Business Failure Prevention

Abstract

The study examined the effect of usage of cloud-based accounting software on business failure prevention. The research context covered the consumer goods sector of the Nigerian exchange group. An ex-post facto research design was deployed on a purposively selected sample of fourteen (14) consumer goods firms. Secondary data were sourced from audited financial statements and annual reports of several consumer goods firms. The data collection phase extended over a decade, covering the financial years from 2012 to 2021. The descriptive statistical characteristics of the data were analyzed using measures such as the mean, standard deviation, minimum, and maximum values. In addition to descriptive analysis, the study employed robust least square regression method to test the hypotheses. The study found that the usage of accounting software significantly reduces the likelihood of business failure. In conclusion, adopting modern technological solutions, such as cloud-based accounting software, is a crucial and comprehensive strategy to enhance the financial health and resilience of businesses. We therefore recommend that governments, industry associations, and financial institutions should prioritize investments in technological infrastructure and skills development to support the widespread adoption of cloud-based accounting software.

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