THE IMPORTANCE OF FINANCIAL ACCOUNTING FOR MICRO AND SMALL ENTERPRISES

Abstract

Micro and small enterprises hold a strategic position in the economic landscape, yet often face significant financial management challenges. In response to this, financial accounting emerges as a tool to enhance transparency, efficiency, and performance of these businesses, providing relevant information for strategic decision-making. Therefore, the aim of this research was to investigate the importance of financial accounting as a strategic tool for managing micro and small enterprises. The adopted methodology involved a literature review on financial accounting for micro and small enterprises, utilizing databases such as SciELO and Google Scholar to identify relevant studies. Articles, books, and other publications addressing accounting principles applied to micro and small enterprises, as well as their specific practices and challenges, were reviewed.The results indicate that financial accounting plays a crucial role in managing micro and small enterprises by providing accurate and timely information about the financial health of the company. Proper accounting practices allow for better cost analysis, profit margins, tax planning, and cash flow management, essential for making informed decisions. It is concluded that financial accounting is of great importance and can foster the growth of micro and small enterprises, enabling more efficient and strategic management.