Issues of Improving the Financial Analysis and Accounting of Costs in Small Business Entities

Small businesses play a crucial role in the economic stability and growth of countries, necessitating effective financial management and accurate reporting. The paper focuses on enhancing accounting systems and policies within small business entities, emphasizing the integration of financial and management accounting to improve cost classification and financial transparency. Despite advancements in accounting practices, small businesses still face challenges in adapting to international standards, with insufficient development of accounting policies and cost classification systems. This research aims to improve the financial reporting and cost management of small businesses by developing comprehensive accounting policies aligned with international standards. The findings indicate that small businesses often struggle with insufficiently developed accounting policies, leading to unreliable financial data and ineffective decision-making. The implementation of simplified accounting systems and improved cost classification can significantly enhance financial stability and decision-making. The study introduces practical recommendations for integrating management accounting techniques such as standard costing and budgeting to optimize cost control and enhance profitability in small businesses. The paper suggests that improving accounting policies can strengthen financial transparency, increase investor confidence, and promote sustainable development for small business entities. This will contribute to economic growth and competitiveness in a globalized market.