Management Accounting in Startups: A Literature Review
In recent years, management accounting research has been increasingly focusing also in the adoption and effects of management accounting systems and practices in early-stage start-up companies and small-to-medium size enterprises. Such firms may lack the required information and expertise with regard to such systems. Therefore, the principal motivation of this literature review is to give a structured overview of the categories of management accounting practices across start-ups and SMEs, their rate of adoption, and of the advantages, barriers and effects related with them. This paper aims to give answers to the following research questions: (1) What management accounting systems are studied in the literature? (2) What are the advantages and barriers these companies face while adopting these systems? (3) What is the rate of adoption of such systems? (4) What effects does the adoption and use of management accounting systems in start-ups and SMEs? Management accounting literature on start-ups generally concentrates on costing systems, budgeting systems, and performance evaluation and decision support systems. The implementation of management accounting practices seems to be influenced by different factors, such as the firm’s size, operating environment, venture capital, influence of CEOs and costs. The majority of authors find that the use of management accounting positively impacts both the growth, valuation and sustainability of the firms, and the relationship between employees, CEOs, investors and customers.