Benefits and Drawbacks of Financial Reporting Practices: A Case Study of UD Harapan Jaya in Pallangga Village
DOI:
https://doi.org/10.61194/ijat.v3i2.792Keywords:
Financial Reporting, MSMEs, Financial Literacy, Digital Finance, SWOT Analysis, South Sulawesi, Qualitative Case StudyAbstract
Financial reporting is crucial for the sustainability and competitiveness of Micro, Small, and Medium Enterprises (MSMEs), yet many businesses in developing countries continue to rely on informal financial management practices. This study investigates the perceived benefits and barriers to financial reporting at UD Harapan Jaya, a construction material trading MSME in South Sulawesi, Indonesia. Employing a qualitative descriptive case study approach, data were collected through interviews and observations with the business owner and key staff. Thematic analysis was used to analyze the data and identify key patterns in financial practices and decision-making behaviors. Findings reveal that UD Harapan Jaya has yet to adopt formal financial reporting systems, relying instead on manual bookkeeping and intuitive decision-making. This has resulted in inefficiencies in cash flow management, limited access to financing, and weakened strategic planning. The study identifies significant internal barriers, including limited financial literacy and resource constraints, alongside external pressures such as market competition and fluctuating material prices. The research also highlights the potential of digital financial applications and government support programs in addressing these challenges, emphasizing their role in enhancing financial literacy and enabling MSMEs to transition toward structured reporting practices. The use of SWOT analysis and IFAS/EFAS matrices provided strategic insights that can inform actionable financial management improvements. These findings contribute to the literature on MSME financial practices in resource-constrained settings and suggest pathways for policy and practice interventions.
References
Abbas, M. S. (2025). The Effect of Corporate Entrepreneurship Determinants on the Financial Performance of Small and Medium Enterprises (SMEs): An Empirical Study. Gadjah Mada International Journal of Business, 27(2), 247–267. https://doi.org/10.22146/gamaijb.v27i2.21210 DOI: https://doi.org/10.22146/gamaijb.v27i2.21210
Aeni, T. I., Rena, S., & Destiana, R. (2024). The Influence of the Use Financial Technology, Owner Financial Literacy, and Risk Tolerance on the Performance of MSMEs in Indonesia. International Journal of Business Law and Education, 5(1), 996–1006. https://doi.org/10.56442/ijble.v5i1.494 DOI: https://doi.org/10.56442/ijble.v5i1.494
Apasrawirote, D., & Yawised, K. (2023). The Emerging of Business Resilience Plans (BRPs) in Dealing With Business Turbulence. Management Research Review, 47(1), 141–161. https://doi.org/10.1108/mrr-04-2022-0273 DOI: https://doi.org/10.1108/MRR-04-2022-0273
Apriyanti, H. W., & Yuvitasari, E. (2021). The Role of Digital Utilization in Accounting to Enhance MSMEs’ Performance During COVID-19 Pandemic: Case Study in Semarang, Central Java, Indonesia. 495–504. https://doi.org/10.1007/978-3-030-79725-6_49 DOI: https://doi.org/10.1007/978-3-030-79725-6_49
Arnada, A. S., & Sofyan, N. (2023). Bank Indonesia DIY Education Campaign Strategy in Increasing Awareness of QRIS Electronic Payments in the DIY MSME 2023. Symposium of Literature Culture and Communication (Sylection) 2022, 3(1), 123. https://doi.org/10.12928/sylection.v3i1.13949 DOI: https://doi.org/10.12928/sylection.v3i1.13949
Athia, I., Sudarmiatin, S., & Hermawan, A. (2023). Management of CashFlow Practices in Micro Enterprises: Perspectives From Women-Owned SMEs. International Journal of Humanities Education and Social Sciences (Ijhess), 2(6). https://doi.org/10.55227/ijhess.v2i6.489 DOI: https://doi.org/10.55227/ijhess.v2i6.489
Berisha, A., Hoti, A., & Hoti, H. (2023). An Empirical Study on Micro, Small, and Medium Enterprises Access to Finance in Kosovo: A Survey Based Analysis. Multidisciplinary Science Journal, 6(5), 2024068. https://doi.org/10.31893/multiscience.2024068 DOI: https://doi.org/10.31893/multiscience.2024068
Chisiri, T., & Manzini, S. (2022). Impact of Financial Management Practices on Sustainable Growth of SMEs: A Case of Catering Organizations in Bulawayo Metropolitan Province. International Journal of Entrepreneurial Research, 4(3), 48–53. https://doi.org/10.31580/ijer.v4i3.2042 DOI: https://doi.org/10.31580/ijer.v4i3.2042
Dahanayake, P. A. S., Rajendran, D., Selvarajah, C., & Ballantyne, G. (2018). Justice and Fairness in the Workplace: A Trajectory for Managing Diversity. Equality Diversity and Inclusion an International Journal, 37(5), 470–490. https://doi.org/10.1108/edi-11-2016-0105 DOI: https://doi.org/10.1108/EDI-11-2016-0105
Dahlima, D., Hariyanto, D., & Safitri, H. (2024). The Influence of Financial Literacy, Locus of Control, Government Support and Access to Capital on Financial Behavior in Business Sustainability in MSMEs in Sambas Regency. Journal of Asian Multicultural Research for Economy and Management Study, 5(2), 68–78. https://doi.org/10.47616/jamrems.v5i2.517 DOI: https://doi.org/10.47616/jamrems.v5i2.517
Dermawan, O., Cardona, A. S., Diana, E., & Wahidah, S. R. (2024). Digital Strategy for MSMEs: Marketing Optimization of Woven Bags. Communautaire, 3(1), 40–51. https://doi.org/10.61987/communautaire.v3i1.385 DOI: https://doi.org/10.61987/communautaire.v3i1.385
Du, C., Hu, M., Wang, T., & Kizi, M. D. D. (2024). Research on the Impact of Digital Inclusive Finance on Green Innovation of SMEs. Sustainability, 16(11), 4700. https://doi.org/10.3390/su16114700 DOI: https://doi.org/10.3390/su16114700
Dwyanti, D. (2024). The Importance of Financial Literacy in Financial Management in Micro, Small and Medium Enterprises (MSMEs). Journal of Applied Management and Business (Jamb), 5(1), 1–6. https://doi.org/10.37802/jamb.v5i1.661 DOI: https://doi.org/10.37802/jamb.v5i1.661
Esfahani, P., Mosadeghrad, A. M., & Akbarisari, A. (2018). The Success of Strategic Planning in Health Care Organizations of Iran. International Journal of Health Care Quality Assurance, 31(6), 563–574. https://doi.org/10.1108/ijhcqa-08-2017-0145 DOI: https://doi.org/10.1108/IJHCQA-08-2017-0145
Faizi, F., & Yudhistira, S. S. Y. S. S. (2023). The Effectiveness of Sharia Micro-Enterprise Capital Financing on the Development of Msmes in Indonesia. Jurnal Ilmiah Ekonomi Islam, 9(3), 3179. https://doi.org/10.29040/jiei.v9i3.9698 DOI: https://doi.org/10.29040/jiei.v9i3.9698
Fathurrahman, M. I., Fajri, A., & Purwanto, E. (2024). Entrepreneurial Behaviour in Choosing Capital Alternatives in MSMEs and Investment Trends in Indonesia. Sentralisasi, 13(3), 95–122. https://doi.org/10.33506/sl.v13i3.3482 DOI: https://doi.org/10.33506/sl.v13i3.3482
Gope, S., Elia, G., & Passiante, G. (2018). The Effect of HRM Practices on Knowledge Management Capacity: A Comparative Study in Indian IT Industry. Journal of Knowledge Management, 22(3), 649–677. https://doi.org/10.1108/jkm-10-2017-0453 DOI: https://doi.org/10.1108/JKM-10-2017-0453
Hamid, A., Widjaja, W., Sutrisno, S., Napu, F., & Sipayung, B. (2024). The Role of Fintech on Enchancing Financial Literacy and Inclusive Financial Management in MSMEs. Technovate, 1(2), 81–88. https://doi.org/10.52432/technovate.1.2.2024.81-88 DOI: https://doi.org/10.52432/technovate.1.2.2024.81-88
Herdinata, C., Pranatasari, F. D., & Santoso, W. (2024). Factors Affecting Financial Performance in Companies Based on Big Data Analytics. Uncertain Supply Chain Management, 12(1), 159–166. https://doi.org/10.5267/j.uscm.2023.10.008 DOI: https://doi.org/10.5267/j.uscm.2023.10.008
Herman, N. M., Nirwana, N., Fahdal, M. A., & Hasan, H. (2023). The Role of Technology and Accounting Information Systems in Improving the Operational Activities of MSMEs. International Journal of Humanities Education and Social Sciences (Ijhess), 3(3). https://doi.org/10.55227/ijhess.v3i3.683 DOI: https://doi.org/10.55227/ijhess.v3i3.683
Hikmahwati, H., & Irwansyah, R. (2023). The Effect of Management Knowledge Influences the Preparation of MSMEs Financial Statements. Ilomata International Journal of Tax and Accounting, 4(4), 832–845. https://doi.org/10.52728/ijtc.v4i4.890 DOI: https://doi.org/10.52728/ijtc.v4i4.890
Hosoda, M., & Nagano, S. (2023). Breaking the Glass Ceiling: Gender Equality Practices in a Japanese Bank. Corporate Governance, 24(2), 264–277. https://doi.org/10.1108/cg-04-2023-0139 DOI: https://doi.org/10.1108/CG-04-2023-0139
Jaramillo-Moreno, B. C., Sánchez-Cueva, I. P., Tinizaray-Tituana, D. G., Narváez, J. C., Cabanilla, E., Torrecillas, M. J. M., & Rambaud, S. C. (2020). Diagnosis of Administrative and Financial Processes in Community-Based Tourism Enterprises in Ecuador. Sustainability, 12(17), 7123. https://doi.org/10.3390/su12177123 DOI: https://doi.org/10.3390/su12177123
Johnsen, Å. (2016). Strategic Planning and Management in Local Government in Norway: Status After Three Decades. Scandinavian Political Studies, 39(4), 333–365. https://doi.org/10.1111/1467-9477.12077 DOI: https://doi.org/10.1111/1467-9477.12077
Johnsen, Å. (2019). Does Formal Strategic Planning Matter? An Analysis of Strategic Management and Perceived Usefulness in Norwegian Municipalities. International Review of Administrative Sciences, 87(2), 380–398. https://doi.org/10.1177/0020852319867128 DOI: https://doi.org/10.1177/0020852319867128
Kittisak, A. (2023). Challenges and Strategies for Inventory Management in Small and Medium-Sized Cosmetic Enterprises: A Review. International Journal of Information Technology and Computer Science Applications, 1(2). https://doi.org/10.58776/ijitcsa.v1i2.30 DOI: https://doi.org/10.58776/ijitcsa.v1i2.30
Kouam, A. W. F. (2025). Toward Digital Transformation: Insights Into Chinese Cross-Border E-Commerce SMEs During the COVID-19 Pandemic and the Post-Pandemic Era. Sage Open, 15(1). https://doi.org/10.1177/21582440251318792 DOI: https://doi.org/10.1177/21582440251318792
Laguir, L., Laguir, I., & Tchemeni, E. (2019). Implementing CSR Activities Through Management Control Systems. Accounting Auditing & Accountability Journal, 32(2), 531–555. https://doi.org/10.1108/aaaj-05-2016-2566 DOI: https://doi.org/10.1108/AAAJ-05-2016-2566
Loist, C., Putra, L. A., Ambarita, M. H., WANG, B. ‐G., & Suma, U. (2023). COUNSELING ON THE PREPARATION OF FINANCIAL REPORTS AS a FORM OF EMPOWERMENT FOR MSMEs IN THE CITY OF PEMATANG SIANTAR. Glow, 3(2), 60–65. https://doi.org/10.37403/glow.v3i2.139 DOI: https://doi.org/10.37403/glow.v3i2.139
Mittal, S. (2024). Innovative Costing Methodology for Strategic Financial Planning and Resource Allocation: Navigating Budgetary Constraints to Drive Sustainable Growth and Business Leadership. Iarmea, 1(1), 1–11. https://doi.org/10.33422/iarmea.v1i1.284 DOI: https://doi.org/10.33422/iarmea.v1i1.284
Nanda, S., Rani, R., Karnik, N., Khanna, L., & Agarwal, N. (2024). Surveying the Crucial Role of Financial Management in Small and Medium Enterprises. Multidisciplinary Reviews, 6, 2023ss097. https://doi.org/10.31893/multirev.2023ss097 DOI: https://doi.org/10.31893/multirev.2023ss097
NDATHA, I. M., & OMBUI, D. R. K. (2018). Effect of Strategic Management Practices on Financial Performance of Small and Medium Enterprises in Kitui County. Strategicjournals.Com, 5(4). https://doi.org/10.61426/sjbcm.v5i4.978 DOI: https://doi.org/10.61426/sjbcm.v5i4.978
Nketsiah, I. (2018). Financial Management Practices and Performance of SMEs in Ghana: The Moderating Role of Firm Age. Open J Econ Commer, 1(4), 8–18. https://doi.org/10.22259/2638-549x.0104002 DOI: https://doi.org/10.22259/2638-549X.0104002
Nkwinika, E., & Akinola, S. (2023). The Importance of Financial Management in Small and Medium-Sized Enterprises (SMEs): An Analysis of Challenges and Best Practices. Technology Audit and Production Reserves, 5(4(73)), 12–20. https://doi.org/10.15587/2706-5448.2023.285749 DOI: https://doi.org/10.15587/2706-5448.2023.285749
Otto, W. (2018). Management of Trade Credit by Small and Medium-Sized Enterprises. Journal of Economic and Financial Sciences, 11(1). https://doi.org/10.4102/jef.v11i1.178 DOI: https://doi.org/10.4102/jef.v11i1.178
Perdana, B. S., Ma’shum, A. M. M. H., & Susminingsih, S. (2024). Evaluation of the Effectiveness of the ‘3-in-1’ Financial Reporting Model in Supporting the Sustainability of MSMEs. Accounting and Financial Control, 5(1), 16–28. https://doi.org/10.21511/afc.05(1).2024.02 DOI: https://doi.org/10.21511/afc.05(1).2024.02
Pinto, L. (2023). Investigating the Relationship Between Green Supply Chain Purchasing Practices and Firms’ Performance. Journal of Industrial Engineering and Management, 16(1), 78. https://doi.org/10.3926/jiem.3686 DOI: https://doi.org/10.3926/jiem.3686
Pratama, R., Safariah, I., & Anas, M. (2024). The CFO’s Playbook: Strategic Financial Management for Competitive Advantage. Journal of Economic Bussines and Accounting (Costing), 7(5), 1138–1148. https://doi.org/10.31539/costing.v7i5.11703 DOI: https://doi.org/10.31539/costing.v7i5.11703
Purnamasari, E. (2025). The Role of Government Support, Green Supply Chain Management, and Technological Innovation in Enhancing Msme Competitiveness. Indo-Fintech Intellectuals Journal of Economics and Business, 5(2), 4640–4652. https://doi.org/10.54373/ifijeb.v5i2.2943 DOI: https://doi.org/10.54373/ifijeb.v5i2.2943
Putri, A. R., & Husna, F. K. (2024). Financial Management Analysis of Culinary Micro, Small, and Medium Enterprises (MSMEs). Journal of Economics Research and Policy Studies, 4(1), 68–78. https://doi.org/10.53088/jerps.v4i1.858 DOI: https://doi.org/10.53088/jerps.v4i1.858
Rachmanto, A., & Utami, E. R. (2024). Optimizing Financial Reporting in Small Businesses: Leveraging Microsoft Excel for Efficiency and Accuracy. Proceeding of International Conference on Business Economics Social Sciences and Humanities, 7, 284–294. https://doi.org/10.34010/icobest.v7i.538 DOI: https://doi.org/10.34010/icobest.v7i.538
Rahmajati, E. S., & Kusuma, P. D. I. (2023). Efforts to Improve Smes Performance in Purwokerto Through Financial Literacy, Financial Inclusion and Digitation. Al-Masraf Jurnal Lembaga Keuangan Dan Perbankan, 8(1), 114. https://doi.org/10.15548/al-masraf.v8i1.613 DOI: https://doi.org/10.15548/al-masraf.v8i1.613
Rahmati, S., Mahdavi, M. H., Ghoushchi, S. J., Tomášková, H., & Haseli, G. (2022). Assessment and Prioritize Risk Factors of Financial Measurement of Management Control System for Production Companies Using a Hybrid Z-Swara and Z-Waspas With FMEA Method: A Meta-Analysis. Mathematics, 10(2), 253. https://doi.org/10.3390/math10020253 DOI: https://doi.org/10.3390/math10020253
Ratih, I. S., & Ridho, Z. (2023). Islamic Family Finance: An in-Depth Analysis of Financial Management Practices. Ijess, 1(2), 111–123. https://doi.org/10.33650/ijess.v1i2.7218 DOI: https://doi.org/10.33650/ijess.v1i2.7218
Riyani, E. I., Tantri, S. N., Hardiana, N., Widiastuti, Y., Muktiyanto, A., & Agustin, F. (2024). Improving the Quality of Financial Reporting Through the Implementation of Microsoft Excel for SMEs in Parung Serab, Tangerang. International Journal of Community Service Learning, 8(1), 130–139. https://doi.org/10.23887/ijcsl.v8i1.68853 DOI: https://doi.org/10.23887/ijcsl.v8i1.68853
Rupeika-Apoga, R., Буле, Л., & Petrovska, K. (2022). Digital Transformation of Small and Medium Enterprises: Aspects of Public Support. Journal of Risk and Financial Management, 15(2), 45. https://doi.org/10.3390/jrfm15020045 DOI: https://doi.org/10.3390/jrfm15020045
Sari, N. Y., Yunus, L., & Zani, M. (2022). Strategies to Survive MSMEs (Small and Medium-Sized Micro Enterprises) in Kendari City During the Covid-19 Pandemic (Case Study in Kambu Subdistrict). International Journal of Agricultural Social Economics and Rural Development (Ijaserd), 2(2), 50. https://doi.org/10.37149/ijaserd.v2i2.24283 DOI: https://doi.org/10.37149/ijaserd.v2i2.24283
Sarsiti, S. (2020). Accounting Information Systems on the Financial Performance of Batik MSMEs in Solo Raya Through the Quality of Financial Reports: The Role of Accounting Understanding as Moderation. Devotion Journal of Research and Community Service, 1(2), 91–101. https://doi.org/10.59188/devotion.v2i1.567 DOI: https://doi.org/10.59188/devotion.v2i1.567
Susilowati, E., Permadi, A., Hariyanti, S., Munir, M., & Wahyudi, A. B. (2023). Analysis of the Implementation of Digitalization of Financial Statements in Micro, Small, and Medium Enterprises. Open Access Indonesia Journal of Social Sciences, 6(4), 1048–1054. https://doi.org/10.37275/oaijss.v6i4.170 DOI: https://doi.org/10.37275/oaijss.v6i4.170
Yuliati, A., & Huda, S. (2025). The Role of Accounting in the Growth of Msmes in Indonesia. Winter Journal, 6(1), 1–10. https://doi.org/10.52851/wt.v6i1.68 DOI: https://doi.org/10.52851/wt.v6i1.68
Yusuf, D., & Sukma, A. D. (2021). Analisis Swot Sebagai Strategi Meningkatkan Daya Saing Di Apotek Ben Do Sehat Pahonjean. Respati, 16(1), 24. https://doi.org/10.35842/jtir.v16i1.385 DOI: https://doi.org/10.35842/jtir.v16i1.385
Zakirova, A., Klychova, G., Остаев, Г., Zaugarova, E., Nigmetzyanov, A., & Zaharova, E. (2020). Organizational and Methodological Approach to Managing Financial Flows of Agricultural Enterprises. E3s Web of Conferences, 164, 10009. https://doi.org/10.1051/e3sconf/202016410009 DOI: https://doi.org/10.1051/e3sconf/202016410009
Zulqarnain, M., Mustehsan, M., Balouch, U. K., & Munir, S. (2023). Assessing the Influence of Financial Inclusion and Digital Finance on Smes Performance: The Moderating Role of Technological Adaptation. Journal of Management Small and Medium Enterprises (Smes), 16(3), 459–476. https://doi.org/10.35508/jom.v16i3.11943 DOI: https://doi.org/10.35508/jom.v16i3.11943
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Putri Ayu Lestari
This work is licensed under a Creative Commons Attribution 4.0 International License.
