Abstract : This study aims to analyze the implementation of digitization of financial statements and its impact on the financial performance of Micro, Small, and Medium Enterprises (MSMEs) in Riau. The research was conducted on 100 respondents consisting of MSME actors with types of trading, culinary, service, and production/manufacturing businesses. The research method used is a descriptive quantitative approach with data collection through surveys, interviews, and literature studies. The results of the study show that 55% of MSME actors have adopted digital applications for financial records, while 45% still use manual methods. Digitization of financial statements has a positive impact on financial performance, such as increased operational efficiency (70% of respondents reported saving up to 2-3 hours per week), increased data accuracy (65% of respondents felt more accurate), and ease of decision-making (75% of respondents felt helped in determining financial strategies). In addition, 50% of respondents reported an average turnover increase of 10-15% after the implementation of digitalization. However, the study also found some challenges, such as limited internet access (40%), limited hardware (25%), and lack of digital literacy (35%). This study concludes that digitization of financial statements has great potential to improve the financial performance of MSMEs, but its success requires support in the form of adequate technology infrastructure, digital literacy training, and supportive government policies.
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