Digital Accounting Transformation to Improve the Quality of MSME Financial Management Amidst the Development of Financial Technology

Abstract

The rapid expansion of financial technology has created an urgent need for micro, small, and medium enterprises to shift from manual bookkeeping toward integrated digital accounting systems that support accurate and timely financial reporting. Despite this pressing need, most micro, small, and medium enterprises still struggle with limited technological understanding, weak financial literacy, and fragmented adoption of digital tools, resulting in a persistent gap between the ideal condition of well-governed financial management and the reality faced on the ground. This study aims to examine how digital transformation of accounting contributes to improving the quality of financial management among micro, small, and medium enterprises amid the evolving financial technology landscape, while also identifying the supporting and inhibiting factors behind its optimal implementation. Employing a qualitative descriptive method through library research, secondary data were gathered from scholarly journals, institutional publications, and government reports, then analyzed using content analysis involving identification, classification, comparison, and synthesis. The findings reveal that the effectiveness of digital accounting transformation depends not merely on technological sophistication but on the reciprocal interaction between financial literacy, human resource readiness, and the broader financial technology ecosystem encompassing digital payment, technology-based financing, and cloud-based information systems. This study offers an original contribution by positioning digital accounting transformation as an interconnected component within the financial technology ecosystem rather than a standalone tool, thereby providing conceptual and practical implications for enterprises, policymakers, and financial technology providers seeking sustainable financial governance.

Keywords: Digital Accounting Transformation; Financial Literacy; Financial Management Quality; Financial Technology; Small And Medium Enterprises.