IMPACT OF CLOUD-BASED ACCOUNTING SOFTWARE ON FINANCIAL MANAGEMENT EFFICIENCY IN SMALL FIRM BUSINESSES IN PORT HARCOURT

Abstract

This study examined the impact of cloud-based accounting software on financial management efficiency among small firm businesses in Port Harcourt. Guided by two objectives, the research examined the concept and operational features of cloud-based accounting software in small firm contexts, and to identify the benefits and challenges associated with its adoption. Anchored on the Diffusion of Innovations Theory, the study adopted a descriptive survey design and collected data from 88 respondents drawn from accounting and finance units of small firms in Port Harcourt. Structured questionnaires served as the primary data collection instrument, and the data were analyzed using descriptive statistics and multiple regression. The findings revealed that cloud-based accounting software significantly enhanced financial management efficiency through improved accuracy, timeliness, and accessibility, with accuracy showing the highest positive influence. Specifically, 78% of respondents indicated that the software reduced manual errors, 74% reported improved collaboration with accountants, and 69% stated that it facilitated real-time decision-making. However, adoption was hindered by poor internet connectivity, high subscription costs, low ICT literacy, and data security concerns. The study concluded that while cloud accounting offered transformative potential for small firms in Port Harcourt, infrastructural, financial, and knowledge-related challenges needed to be addressed for optimal utilization. It recommended targeted digital literacy training, affordable subscription models, improved internet infrastructure, and localized solutions tailored to the Nigerian business environment. This research contributed to knowledge by providing empirical evidence linking the operational features of cloud-based accounting software to measurable improvements in financial management efficiency within small businesses in Port Harcourt.