Transforming accounting practices in small and medium-scale enterprises (SMEs): the roles and challenges of information and communication technology

PurposeDespite the vital role that SMEs play in a country’s economy, they face numerous challenges, particularly in generating accurate and quality financial reports for decision-making. This study examines the use of accounting software, its influence on accounting and financial reporting, and the issues that come with using accounting software among Ghanaian SMEs.Design/methodology/approachData were collected using a self-administered paper-based questionnaire from 160 SME owners and managers in Ho Municipality, Volta Region – Ghana. The analysis involved descriptive statistics and regression analysis.FindingsThe study found an increasing use of accounting software among Ghanaian SMEs. The majority of SMEs leverage accounting software to efficiently track inventory, manage cash flow and produce accurate financial reports to support strategic decision-making. However, challenges such as high ICT infrastructure costs, irregular power supply and cybersecurity risks hinder their effective use.Research limitations/implicationsThe research relied on self-reported data, which may increase the risk of common method variance. However, appropriate measures were taken to minimise these limitations.Practical implicationsThe research makes practical contributions to ICT adoption in accounting literature. The findings suggest the need for government, business owners and technology providers to collaborate on developing cybersecurity guidelines for SMEs as well as invest in digital infrastructure to protect financial data and enhance the effective use of digital accounting tools.Originality/valueExisting research on SMEs accounting transformation in Ghana is limited, making this study an original contribution to understanding how accounting software can address financial reporting challenges of Ghanaian SMEs.