Digitalization is More Than Just a Trend: Modernizing Financial Reporting in the Halal MSME Ecosystem of the Riau Islands

This study examines the modernization of financial reporting among MSMEs in Riau Islands Province, focusing on Ayuraskitchen, a home-based business in Batam City that has grown into a multi-outlet cake business. Using a descriptive qualitative approach, the study analyzes the gradual transition in financial reporting from manual records and Microsoft Excel templates to the Lamikro application and, ultimately, the digital accounting application Mekari Jurnal. The findings indicate that modernization occurred gradually in accordance with the growth and needs of the business and was supported by consistent record-keeping, government training and assistance, and the availability of accessible technology. The implementation of digital financial reporting improved the organization, efficiency, and accessibility of financial information, while supporting cash flow monitoring and faster business decision-making. Systematic financial records also help MSMEs prepare financing documentation and improve their bankability by providing more structured business information, although access to financing is influenced by other factors. The study recommends strengthening accounting and digital literacy, providing continuous assistance, implementing SAK EMKM, and fostering collaboration among MSMEs, local governments, financial institutions, and financial technology providers to accelerate the modernization of MSME financial reporting.