Abstract Micro, Small and Medium Enterprises (MSMEs) are vital contributors to economic growth, employment generation, and industrial development. With the rapid advancement of digital technology, traditional accounting methods are gradually being replaced by digital accounting systems. These systems enable automated recording of transactions, improved accuracy, and real-time financial reporting. Real-time financial reporting allows businesses to access financial information instantly, which improves decision-making and financial transparency. The present paper discusses the concept of digital accounting systems and their significance for MSMEs. It highlights how digital accounting facilitates real-time financial reporting, improves operational efficiency, and supports regulatory compliance. The study also examines the benefits and challenges associated with adopting digital accounting technologies in MSMEs. The paper concludes that digital accounting systems are essential for improving financial management and ensuring the sustainable growth of MSMEs in a technology-driven economy. Furthermore, the adoption of digital accounting tools enables MSMEs to streamline their financial operations and enhance the reliability of financial information. It also promotes greater accountability and transparency in business activities. In the long run, the integration of digital accounting practices can help MSMEs adapt to technological advancements and strengthen their competitiveness in the modern business environment.
Aruna Govardhan Kodam (Fri,) studied this question.