IMPACT OF DIGITAL ACCOUNTING TOOLS ON THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SME’s) IN KOGI STATE NIGERIA

Small and medium enterprises (SME’s) play a crucial role in economic development, yet many face challenges in managing financial operations efficiently. Despite the availability of digital accounting tools, the extent to which invoice processing automation (IPA) and payment automation (PA) influence overall financial automation (FA) remains underexplored, particularly in developing economies like Nigeria. The main objective of this study was to examine the impact of IPA and PA on FA among SMEs, providing empirical evidence on the effectiveness of these tools in enhancing financial operations. A quantitative research design was adopted, with data collected from 460 SME respondents using structured questionnaires. Descriptive statistics, correlation analysis, and multiple regression analysis were conducted using SPSS version 23 to analyze relationships and test hypotheses. The regression model tested the effect of IPA and PA on FA, while correlation matrices assessed the strength of associations between variables. Findings revealed that both IPA and PA have a positive and significant impact on FA, with IPA exhibiting a slightly stronger influence. Correlation results indicated that PA is strongly associated with FA, whereas IPA shows a moderate but meaningful relationship. The model explained 72.5% of the variance in FA, confirming the robustness of the predictors. These results suggest that effective adoption and integration of invoice and payment automation significantly improve financial management efficiency in SMEs. Based on the findings, the study recommends that SMEs adopt comprehensive digital accounting tools, invest in staff training to enhance digital literacy, and integrate automation systems into existing financial processes. Policymakers should provide support mechanisms, and software providers should develop user-friendly, scalable solutions tailored to SMEs’ needs.

0 23 Jun, 2026

pg: 16

JBMIC PORTAL SYSTEM

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