Impact of E-Accounting Practice on Overhead Cost Performance: Bangladesh Ready-made Garments (RMG) Industry Experience

Abstract

E-accounting is alluded as the internet based accounting software usage in accomplishing accounting functions. E-accounting practice through e-recording and e-reporting of financial transactions, lessens the overhead cost of user firms. In respond to the evidence that Bangladesh’s economic backbone RMG sector do this accounting practice at large scale, this study aims to analyze the impacts e-accounting practice on overhead cost of the factories. To achieve the objective, the study deploys sequential mixed research strategy constructed with pseudo case study and survey. Based on DeLone and Mclean’s updated IS Success model (2003), and e-accounting literature, questionnaire was formed for case study. Using ‘Overhead cost performance’ in lieu of Purposive and snowball sampling technique five case factories were chosen for data collection. Using content analysis case data were analyzed. Case findings was used to form structured questionnaire for survey. This firm level study considers 3500 active RMG factories as the population. Using G-power 3.1 sample size calculating software, envisaging of smaller effect size f 2 =0.06, the study has taken 200 sampled factories. Using convenience as well as snowball sampling technique, the study conducted the survey. The owners or managers of factories were taken as respondents. MS Excel, SPSS 20.0 and the Smart PLS 3.3.3 were used to analyze survey data. Using PLS SEM the hypotheses were tested. The study reveals that e-accounting practice has significant impact on abating overhead cost of RMG industry of Bangladesh. The study also concludes that administrative overhead cost is more affected by the e-accounting practice than that of factory and selling.