The management accounting practice practiced within the organisation is to offer it assistance and help so that the business remains competitive and is able to operate within a volatile business environment. The use of management accounting also helps the organisation to take managerial action and also improve their working behaviour so that there is a strong possibility of achieving the business strategic and corporate objectives (Alvarez et al., 2021). Management accounting is also important for the business because it helps identifying its internal requirements and to take corrective measures to improve its management functions. In other words, the business is able to improve its performance and financial reporting through management accounting. This is particularly important for SMEs since it helps in moving from its traditional financial accounting methods and to opt for management accounting techniques as well (Abu-Matar, 2025).

This is mainly due to the management accountings ability to remain consistent with the historical data and to take decisions based its current financial situations and matters. These include ownership, taxation, investment, credit granting, and so on (Yahaya, 2019; Akter, 2020). On the contrary however, it is also critiqued that financial accounting techniques are preferred to assess key financial performance of a business such as value added, sales, and its capital expenditures. This needs to be assessed through technical indicators such as the stock market fluctuation, which provides an understanding regarding the organisations measure of performance. 

Yahaya, (2019) study does identify the limitation that management accountings principles have not been assessed comprehensively in the Nigerian SMEs context. Similarly, Lukumay and Wako, (2018) also discussed the implications of management accounting and identified that management accounting is yet to be discussed and implemented comprehensively within the Tanzanian SME landscape. 

Lack of studies regarding management accounting in such markets highlights that there is a lack of understanding and clarity regarding the management accounting techniques and its importance within SMEs. According to Nandan, (2010) there is a lack of understanding in the management accounting concepts and its theories that is limiting accounting information and thus reducing the SMEs performance as well. This is also discussed in a more recent rendition i.e. in Najera and Collazzo, (2021) study where the importance has been assessed in the Mexican sector. The study discussed that the SMEs are adopting management accounting practices owing to the business hierarchy since SMEs mainly use a single owner manager model. 

This is effective in leveraging business performance because pertinent policies and programs can be created through management accounting and it is quite feasible to access information. According to Karagiorgos et al. (2020) in its study also mentions that the use of management accounting principles within SMEs are important because of the sheer number of SMEs. By applying management accounting; such business enterprises can improve its accounting and financial transparency and to be certain that the business is able to maximise both its profits and sales margin. 

Reiterating on the management accounting; it is observed to hold extrinsic value for the SMEs since it is able to improve its business practices by reducing its costs. This is achieved by identifying the key areas that are consuming higher expenditures and can prompt the business to improve its cost effective measures. This is an important aspect since management accounting helps in improving both the business planning and its controlling its expenditures and budget that can be used through cost volume profit analysis. According to Huerta et al. (2017) management accounting practices are able to offer opportunities to SMEs in competing in the business environment (Vărzaru et al., 2022; Clement, 2022). The business through management accounting techniques can also provide competitive pricing at par with its large enterprises counterpart. 

The problem identified in the topic is that there is a paucity of literature concerning management accounting techniques in fostering and improving sustainability in SMEs. The social and environmental impact on a business operation and the role that the management accounting can register is also lacking abundant literature to quantify its claim. In other words; the use of management accounting to promote sustainability and leveraging business performance is yet to be probed and studied comprehensively. According to Ali et al. (2020) the problem identified in its study included lack of understanding and awareness regarding management accounting techniques and the benefit it can provide.  Management accounting techniques are seldom used in the SMEs due to the business centralized structure and employee decisions are being influenced by the management. This is considered to be effective in understanding the management accounting procedures and to evaluate its performance within the performance and sustainability context. The researchs aim includes investigating the role of management accounting in a business sustainability and financial performance. Based on its aim; following are the research questions:

Management accounting has been one of the topics that has gained interest recently owing to its ability to achieve the business objectives and to ensure that there is a streamlined operation. In this context; the SMEs growth has been significant and occupies around 90% of the total businesses operating globally (World Bank, 2019). The SMEs also provide a total of 50% employment and is vital in job creation and also improving the global economic development. SMEs are also observed to contribute to at least 40% of the GDP in developing economies and are expected to create 600 million additional jobs by 2030 (World Bank, 2019). With such a huge participation; SMEs are considered critical and crucial for leveraging economic growth and is able to accommodate a higher amount of workforce. Considering the statistics; the use of management accounting techniques are of paramount importance as SMEs are considered to be a in a strong position to streamline management accounting techniques (Dasanayaka et al., 2021; Hasan et al., 2024). The lack of understanding and comprehensive review regarding such accounting techniques are considered detrimental since it is not being applied and a traditional model for financial accounting is being preferred. 

According to Razak et al. (2023) management accounting are found to comprise both the financial and the non-financial information that is important and crucial for the organisation. This is particularly important for SMEs context since techniques within the management accounting is able to benefit them with budgeting, costs, and so on (Boakye et al., 2020). These applications are considered effective in offering assistance related to planning, controlling, and targeting expenditures within the business so that their operations can be streamlined. 

Sustainable capability and its performance is a major factor within the SMEs is also considered for improvement through management accounting techniques. Purag et al. (2018) states that sustainability through management accounting refers to innovative techniques that can be applied in SMEs that relates to their operations for example their recycling policies. This helps in improving their operational efficiency and also makes it certain that the SMEs are able to increase its productivity and also create value for its consumers. 

Management accounting techniques helps the business to devise innovative strategies to implement sustainability and to address the financial difficulties and issues present in it. Such accounting principles can help in providing the impetus to conduct its business operations with consideration to the environment and its social impacts as well. This includes identifying and defining sustainable values within the SMEs and prompt them to take smart and accurate decisions (Pedroso & Gomes, 2020). On this note; it is also mentioned that the SMEs are able to gain a better understanding in this case regarding management accounting techniques and to use it frequently for its operations. 

Adopting sustainability is considered to be important for the business since it helps in focusing on its stability an also increase its long term financial success. Another requirement within management accounting is to improve visibility in the business landscape and to ensure that the business is able to manage its operations with relative ease. Similarly, for the management accounting principles are considered effective in addressing its operational concerns since the budgetary techniques are able to plan and control its expenditures. This helps in taking decisions to improve its financial performance by implementing management accounting services to achieve its corporate objectives. 

Fig. 1: Conceptual Framework.

Such use of management accounting techniques are considered to be important and relevant for the SMEs to ensure that there is no discrepancy within its results and to be certain that its reporting is perceived to be transparent and accurate. This is considered important since its financial statements are reviewed by its potential investors and thus investing can increase with relative ease and efficiency respectively. The literature also suggests that the SMEs are able to provide and use their influence in using technology to improve their management accounting techniques and to ensure that there is no increase in discrepancies.

The methodology selected for the current research is quantitative in nature since a numeric information is required to compute results. This is because of the topics requirement that warrants a numeric application and tests in this research. The use of a quantitative research design is important for the study because it helps in identifying the relationship between the variables. 

Such a research design is considered effective for the analysis and subsequent discussion as a quantitative research design helps in addressing its formulated objectives and questions. The study also keeps the researcher independent from its findings. The main reason for keeping the researcher independent from the study refers to the fact that the study is understood to focus mainly on the results obtained (Chali et al., 2022). This discretion is only provided in a quantitative research design since it focuses on obtaining and deriving objective inferences and discuss its findings. For this purpose, a primary source for data collection is being preferred. This is a major requirement within the quantitative research design since it helps in improving results and its subsequent discussion. The primary sources include conducting a survey questionnaire with its participants to identify the key issues identified within the study and to ensure that there is a substantial information and data obtained for the studys results. In this case; the use of participants for the study is important since their expert opinion is deemed current and is not based on historical trends. 

This type of information is important for the current research since the questions posed can derive pertinent results and can be subjected to a critical discussion. The use of a primary source i.e. conducting surveys are also a necessity for the current study since it is  able to improve its performance and to ensure  that there is a substantial amount of accurate and relevant information obtained. This is one of the major requirements for the research as it intends to identify and discern the relationship between the variables and to identify the key elements that are influencing its results with relative ease. This can be tallied with the researchs objectives and also assess whether it is addressing its hypotheses or not respectively. 

The data analysis techniques chosen for the study includes SMART PLS implementation to be used to identify the relationship and association between the variables. The tests to be used in this study includes descriptive statistics, correlation, and regression. 

Table 1: Reliability.

According to the average variance extracted or the AVE; the budgeting practices AVE value is 0.526; that shows that its convergent validity is at an acceptable level. Similarly, the AVE value for costing techniques is 0.653 that shows there is a significant convergent validity observed. The strongest convergent validity is for Sustainability variable i.e. 0.731 that is also supplemented with an acceptable Cronbach alpha i.e. 0.893. This shows that the data used in the analysis are observed to have an acceptable level of internal rate of consistency that is important for the current studys analysis and discussion. 

Table 2: Outer Loadings.

The model is used to assess and evaluate the relationship between the indicators and the latent constructs for each variable. The outer loading for the budgeting practice is observed to be significant since its value is within the statistical significance range i.e. 0.002. Similarly, the construct for the costing technique is regarded to be significant as well since its significance value is 0.000 and a strong and a highly significant relationship is observed. This is observed for all the associated constructs present in costing techniques variable. In the case of decision support system; the latent constructs significance value is 0.013 that is interpreted to have a significant albeit a moderate relationship with the independent variable. Similar findings are observed for other variables as well such as financial performance, sustainability, with their significance value of 0.000, which is within the statistical significance range respectively. 

Table 3: Correlation.

As per the correlation matrix; it is observed that there is a consistent pattern present in the model across all variables. The variable sustainability shares a strong correlation with the costing techniques along with the variable financial performance. It is an indication that an improved sustainability is found to be linked with financial performance and the management accounting techniques. There is also a moderate correlation present within the costing techniques and also the financial performance, showing that there is a strong supporting role present in improving these constructs. 

The budgeting practice and the costing techniques correlation is observed to be at a moderate level citing its coefficient value of 0.545 that shows an improved budgeting practice is moderately linked with improving costing techniques. Within the digitalisation context; the correlation supports the claim that there is a positive and significant impact on the management accounting techniques. 

Table 4: Confirmatory factor analysis.

The significance value is 0.000 that indicates that the chi-square value for both the standard and null model is statistically significant. The degrees of freedom show an exceptionally high reading of 14.890 in the estimated model while the null models degree of freedom is 37.765 respectively. The values however shows that the ratio for a fit model is poor since there is a high level of degrees of freedom; that exceeds the maximum value of 5. Moving along; the GFI or the goodness of fit index shows that the estimated models value is 0.75 i.e. closer to 1. This indicates that the estimated model demonstrates a better fit since it is closer to the standard value of 1. Moreover, the use of Tucker Lewis Index or TL1; a moderate level of fitness model is observed i.e. 0.622, which is also closer to 1. This is considered to be a better model citing the complexity involved within the model and thus its inability to reach closer to 1 as well. 

Table 5: Discriminant validity.

The constructs present within the model are assessed whether it is distinct from each variable or not. The discriminant validity in this case shows that the budgeting practice does not share any such correlation with the provided matrix. For the decision support system; the correlation is observed to be 1.2333 that shows an invalid discriminant validity. But the correlation between decision support system and the costing techniques is observed to be 0.709; indicating that a strong and a positive correlation is observed. There is a some degree of discriminant validity observed between the variables. 

Fig. 2: Measurement model.

Similarly, the financial performance and the decision support shares a correlation of 0.519 that indicates that a positive correlation is observed but it is still not perfect, and thus shows a degree of discriminant validity present within the variables. 

Table 6: R-square.

The R square value for the model is observed to be 45% that describes the amount of influence and variability observed from the independent variables on the dependent variable. This is observed to be effective since it shows that there is a moderate level of influence of management accounting techniques on the firms sustainability and its financial performance. 

As per  the findings; it can be stated that the use of management accounting techniques are considered to be an integral and a crucial element for the SMEs since they are in a position to leverage and revitalise its business performance. The businesss position within the industry is also retained and puts them at par with their large counterparts. The costing system is observed to share a strong and a positive relationship with the financial performance that is able to improve SMEs performance with relative ease. 

The findings are found to concur with Gardi et al. (2021) study as well that focused upon on the  use of costing techniques and budgeting techniques to improve its business performance without any barrier. This is observed to be crucial for the SMEs performance since it allows them to determine their product cost along with the amount of raw materials being used by the business and thus are able to provide them with a deeper understanding regarding the business dynamics. The finding is also found consistent with Javed et al. (2022)s study that focused on the Chinese SMEs and observed that there is a substantial benefit to them lest they conform to the management accounting techniques and principles. 

The current researchs findings also observed a moderate relationship and association between the variables that implied that there is a moderate level of association and impact of management accounting techniques on the SMEs performance. Javed et al. (2022) also observed certain barriers in promoting and implementing these techniques within the SMEs. This includes increasing management accounting techniques in the business and to use it for their own benefit. According to Boakye et al. (2020)s study; there is a dearth of benefit observed in SMEs by using management accounting techniques. Considered the results from the UKs perspective; the study observed a positive and a significant impact of management accounting on its SMEs performance and also ensured that there is a significant value creation observed within such SMEs respectively. 

Reiterating on the findings; it is observed that there is a positive and a significant correlation observed between the constructs but the effect was moderate. No relationship observed a strong relationship with each other. This might be related to the use of a relatively smaller sample size where the SMEs are not selected adequately enough to provide a better insight regarding the relationship. This is also considered to be an issue in Mangana et al. (2023) study where the SMEs are facing issues by not complying with the management accounting practices present within its business landscape. 

The study focused on the Tanzanian agricultural SMEs that are not able to incorporate management accounting techniques due to lack of awareness and its techniques within the business. This is considered to be a major hindrance and a barrier for the organisation seeking to implement it in its business and improve its performance. This is also necessitated to ensure that there is a better chance for being in line with the business environment and to develop competitiveness as compared with its larger counterparts. 

The results also showed that costing techniques are sharing a proportional relationship with the financial and sustainable performance. This is concurring with Nartey and van der Poll, (2021) study that observed management accounting practices are observed to promote sustainability within the SMEs. This is observed within the manufacturing industry and the SMEs are observed to be resilient to any change in the business environment through management accounting principles adoption. The current study is also observed to provide similar results and are not providing any substantial deviation from this issue since management accounting principles are considered effective in improving the business performance. This is because of the techniques used by the SMEs since they can improve their business performance and also helps in improving its conduct with relevant ease. This is an important undertaking for the study since without any management accounting; it is not able to provide any benefit to its customers such as value creation. This is hindered within the business by not implementing any of the management accounting technique such as budgeting and costing. This is also observed in Jaradat et al. (2021)s study where the implications are assessed concerning the management accounting techniques and are not able to provide any substantial information that can be used for its business. The use of management accounting principles for promoting social and business causes are considered necessary and also helps in improving the business performance and also creating a better value proposition for its customer base. This is at times not compatible and feasible with the SMEs citing the nature of its industry. This is concurring with Vilakazi et al. (2020) study where the SMEs within the textile industry were assessed. Findings from the study suggested that there is a substantial issue in incorporating and implementing management accounting practices and techniques within the SMEs that are operating within the emerging markets. 

The limitations identified in the study are related with the limited literature and the paucity of information observed regarding the use of management accounting techniques and also its use within the SMEs. The limitation has been significant and has been observed throughout the results and discussion phase of the research. The main issue within the limitation is that it restricted the research to conduct a comprehensive test citing lack of relevant resources identified for the study and also the lack of personnel involved for the data process. The evident result in this case was observed during the analysis and the discussion phase where the former obtained a moderate relationship as a result. 

Future research

Considering the results; there is a substantial amount of impetus provided in improving debates and arguments related to management accounting techniques and its use in SMEs for improving both its financial and sustainable performance. As per the results and the subsequent discussion; it is observed that there is a substantial amount of information obtained from the study and the considerable influence that the management accounting techniques have on the SMEs performance. The future research obtained from the current inference is that further research on particular management accounting techniques such as costing and budgeting can be conducted and a better argument can also be conducted. In this case; the use of particular inferences observed from the study is observed to be effective and is able to provide substantial amount of arguments regarding the use of management accounting techniques along with other accounting principles to help in creating a financially and sustainable business operation. 

Data is available within the manuscript and will be provided at the editors request.

The authors express their sincere gratitude to Yamen Academy, Jordan, for providing academic and institu-tional support. They also extend their appreciation to colleagues and reviewers whose valuable insights contributed to enhancing the quality of this research.

The authors do not have any conflict of interest.