Digitalization of MSME Financial Records: The Foundation of Innovation and Sustainable Industrialization in Indonesia

Micro, Small, and Medium Enterprises (MSMEs) represent a foundational component of the Indonesian economy, contributing in excess of 60% to the national Gross Domestic Product (GDP) and employing nearly 97% of the labor force. However, the majority of MSMEs still face challenges in efficient financial management due to error-prone manual records. Digitalization of financial records through accounting information systems is an important solution to improve efficiency, transparency, and access to formal financial services. This article examines the role of digitizing MSME financial records in supporting innovation and sustainable industrialization in accordance with Sustainable Development Goal (SDG) 9, which focuses on building resilient infrastructure, inclusive industrialization, and innovation. Using a literature review method, this article finds that digitization can increase MSME productivity by up to 35%, accelerate access to formal financing, and support data-driven decision-making. However, challenges such as low digital literacy and uneven internet infrastructure are still major obstacles. This article recommends digital literacy training, government support, and the development of affordable accounting applications as strategic steps to accelerate the digital transformation of MSMEs in Indonesia.