THE INFLUENCE OF ACCOUNTING INFORMATION SYSTEM ON SMALL AND MEDIUM ENTERPRISEs PERFORMANCE IN DAR ES SALAAM, TANZANIA

Abstract

ABSTRACT This study examines the adoption and impact of Accounting Information Systems (AIS) on small and medium-sized enterprises (SMEs) in Dar es Salaam, Tanzania, with a focus on how AIS can enhance operational efficiency and foster business growth. The research has three primary objectives: assessing the current level of AIS adoption among SMEs, identifying factors influencing this adoption, and analyzing the impact of AIS on business performance. A cross sectional research design was employed, utilizing structured questionnaires to collect data on firm characteristics, including size, owner education, market experience, business association membership, and AIS usage. now add some numbers. A total of 200 SMEs were selected using a multistage sampling approach, ensuring diverse representation across various sectors and business sizes. Descriptive statistics were applied to evaluate the level of AIS adoption, while logistic regression analysis was employed to identify the factors influencing this adoption. Additionally, Pearson correlation analysis quantified the relationship between AIS usage and overall SME performance. The findings reveal varied degrees of AIS adoption, with some SMEs fully integrating these systems into their operations, while others face financial and knowledge constraints that limit usage. Larger firms, owners with higher education and experience, and those involved in business associations demonstrated a greater likelihood of adopting AIS. Notably, an inverse relationship was identified between market experience and AIS adoption, suggesting that more experienced owners may be hesitant to transition from traditional practices. Furthermore, the analysis highlighted a positive correlation between AIS adoption and improved business outcomes, including increased profitability, customer satisfaction, and productivity. To mitigate the challenges surrounding AIS adoption, the study recommends targeted training programs, financial support initiatives, awareness campaigns, and the establishment of peer networking opportunities. These strategies aim to facilitate the adoption of AIS, particularly among smaller SMEs, enabling them to harness technology for improved financial management and enhanced competitiveness in an increasingly complex business landscape.