BEYOND BOOKKEEPING: ACCOUNTING CONTROLS, TAX FRICTION, AND INVENTORY TRACEABILITY IN MEDICAL DEVICE TRADING SMES

Abstract

This study examines how medical device trading SMEs configure accounting practices as practical controls beyond basic bookkeeping. Prior SME accounting research has largely examined bookkeeping adoption, financial reporting, and tax compliance, but less attention has been given to how simple records, invoices, software entries, and stock routines work after adoption as operational controls in documentation-sensitive trading sectors. Using a qualitative multiple-case study, this research investigates three owner-managed medical device trading SMEs in Indonesia through semi-structured interviews, cross-case analysis, and practitioner-observation notes from accounting and tax-administrative assistance. The findings show that the firms assemble minimum viable accounting controls through hybrid recording routines, document-chain verification, physical stock correction, selective use of accounting information, and tax-document discipline. Inventory traceability becomes a practical test of control reliability because similar item names, unit ambiguity, and delayed stock correction can make system records diverge from physical stock. Tax friction also emerges as a central control issue through customer-identity gaps, tax-invoice reluctance, VAT-inclusive pricing pressure, recurring VAT overpayment, and return-document mismatches. The study contributes by shifting SME accounting discussion from adoption to post-adoption control configuration and by explaining how small firms govern transactions, stock, documents, and tax obligations through imperfect but functional routines.