- Publication Number: 397495
- Publication Date: 20th October 2025
The Role of Digital Accounting Systems in Enhancing Financial Transparency and Decision-Making in Small and Medium Enterprises.
Author: FARIHA AFRIN KANTA | ID: 27199320190102026
Reviewed by:
Lilac School of Business (LSB)
Paper preview
1. Abstract
2. Introduction
3. Literature Review
4. Methodology
5. Findings
6. Conclusion
7. References
Abstract
The rapid advancement of digital technologies has significantly transformed traditional accounting practices, particularly within Small and Medium Enterprises (SMEs). This study explores the role of digital accounting systems in enhancing financial transparency and improving decision-making processes in SMEs. As businesses increasingly shift from manual to automated accounting systems, the need for accurate, timely, and reliable financial information has become more critical than ever. This research aims to examine how integrating digital accounting tools improves financial reporting, operational efficiency, and strategic management. The study adopts a qualitative, analytical approach, drawing on existing literature, real-world business practices, and observed accounting frameworks within SMEs. It highlights how digital accounting systems minimize human error, streamline financial transactions, and provide real-time financial data, thereby supporting informed managerial decisions. Furthermore, the research emphasizes that enhanced financial transparency not only strengthens internal control mechanisms but also builds trust among stakeholders, including investors, auditors, and regulatory authorities. Findings suggest that SMEs implementing digital accounting solutions experience improved budgeting accuracy, faster financial analysis, and better compliance with financial regulations. Additionally, these systems enable business owners and managers to make data-driven decisions, thereby improving overall organizational performance and sustainability. However, the study also acknowledges challenges, including initial implementation costs, a lack of technical expertise, and resistance to technological change among traditional businesses. Overall, this research concludes that digital accounting systems play a crucial role in modernizing SME financial operations by promoting transparency and facilitating effective decision-making. The study recommends that SMEs invest in digital accounting infrastructure and training to remain competitive in an increasingly technology-driven business environment.
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Keywords
Digital Accounting Systems, Financial Transparency, Decision-Making, Small and Medium Enterprises (SMEs), Financial Reporting
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