Digital Accounting Systems and Financial Performance of SMEs in Nigeria: An Empirical Analysis
Keywords:
Digital Accounting Systems, Financial Performance, Small and Medium Enterprises (SMEs), Accounting Information Systems, Automation, NigeriaAbstract
This study examines the relationship between digital accounting systems and the financial performance of small and medium-sized enterprises (SMEs) in Nigeria. The study adopts a quantitative research approach using a cross-sectional survey design. Primary data were collected through structured questionnaires administered to a sample of 100 SME owners, managers, and accounting personnel, out of which 100 SME’s were found usable. The measurement of digital accounting systems was done through accounting software usage, cloud accounting adoption, automation and ICT competency, and financial performance was proxied by profitability, revenue growth, cost efficiency and return on assets. Multiple regression analysis was employed to analyse the data. The results show that digital accounting systems have a good and significant effect on the financial performance of SMEs in Nigeria. Specifically, it was observed that the use of accounting software, automation, cloud accounting and ICT competence considerably and positively influences financial performance, with cloud accounting and ICT competence having the biggest effect. The research shows that the use of digital accounting systems improves the efficiency of operations and decision-making and improves the financial results of SMEs. Therefore, SME operators are advised to invest in digital accounting systems and improve their technical capabilities for the full benefits of digitalization. The report also recommends that authorities should assist the implementation of digital accounting systems in the SME sector with supportive frameworks.
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