Dissecting Financial Performance: The Role of Managerial Accounting in Indonesian SMEs

Abstract

This study examines the role of managerial accounting in improving the financial performance of Small and Medium Enterprises (SMEs) in the archipelago. Using qualitative methods and case studies on several SMEs from various sectors, this study found that the implementation of good managerial accounting practices can help SMEs in more effective decision making, budget planning, and cost control. The results show that SMEs that implement cost analysis techniques and regular financial reporting experience increased profitability and operational efficiency. This study concludes that managerial accounting not only functions as a reporting tool, but also as an important strategic driver in the development of SMEs amidst tight competition. Furthermore, this study highlights the importance of accounting training and education for SME owners and managers. Many of them do not fully understand the basic concepts of managerial accounting, so a better understanding can improve their ability to manage finances. In addition, the adoption of information technology in the accounting process is also an important focus, where the use of accounting software can facilitate data processing and produce faster and more accurate reports. With these steps, SMEs in the archipelago can strengthen their financial foundations and compete better in an increasingly competitive market.