Inventory Management and Financial Reporting Challenges of Selected Micro and Small Enterprises: Inputs towards the Set-up of an Open-Source AIS Model

Micro and Small Enterprises are often beset by productivity and efficiency problems caused by factors such as limited access to finance, human resources, and limited technical and management knowledge. These factors caused MSEs to encounter challenges in their inventory management and financial reporting which are both essential to business success and sustainability. Inventory management is vital to any type of business to maximize profits by minimizing costs associated with over-stock inventory, spoilage, and opportunity costs due to out-of-stock inventory. Financial reporting, on the other hand, is essential in providing users, like owners and managers, in making decisions, which can be used to increase competitive advantage and business sustainability. This study determined the challenges that micro and small enterprises in the fourth district of Quezon faced in their inventory management and financial reporting. Challenges were determined by distributing survey questionnaires to 120 respondents from five first-class municipalities within the district. Challenges in inventory management as to data accuracy and reliability, inventory tracking, and process efficiency were identified as well as the challenges in financial reporting as to process, quality, sustainability and maintenance, and security. Results show that data gathered on the demographic and business profile of the respondents and the challenges they faced in inventory management and financial reporting were used as a basis for presenting a conceptual design of an Open-source AIS Model, specifically, the ERPNext system.