An Empirical Analysis of the Application of Simple Accounting as an Effort to Improve the Financial Performance of MSMEs

Abstract

This study aims to empirically analyze the effect of implementing simple accounting practices on the financial performance of Micro, Small, and Medium Enterprises (MSMEs). Many MSME owners still face challenges in f inancial management due to limited understanding and application of accounting principles, which leads to difficulties in monitoring cash flow, determining profit or loss, and accurately assessing financial conditions. This study employs a quantitative approach using a survey method conducted among MSME owners. The collected data were analyzed using statistical analysis techniques to examine the effect of simple accounting implementation on MSME financial performance. The results indicate that the implementation of simple accounting has a positive and significant effect on improving the financial performance of MSMEs. Proper, systematic, and easy-to-understand f inancial records enable MSME owners to make more accurate and effective business decisions.