Digital Transformation and Automation in Financial Reporting: The Case of Albanian SMEs in the European Context

The continuous digital evolution of financial reporting remains one of the most substantial developments impacting small and medium-sized companies (SMEs) during the twenty-first century. Improvements in automation and artificial intelligence (AI) have broken free of their classical implementation in giant enter-prises, extending to SMEs that form the basis of the economic profile in most coun-tries. The chapter discusses the use of automation to improve quality, timeliness, and transparency in financial reporting with a specific focus on the situation faced by SMEs in Albania based on a broader international framework. Having conducted a critical study of the existing international literature, comparison studies drawn from the European Union and OECD, and an empirical survey among Albanian SMEs, the chapter illustrates that financial systems utilizing automation provide immense advantages in terms of accuracy, cost-effectiveness, and regulatory compliance. The chapter fills the gap in the existing literature by linking conceptual theory on tech-nology adoption with pragmatic policy advice. This chapter advocates that automa-tion is not simply an instrument for higher efficiency but a strategic advantage that can provide support for SME competitiveness within the global value chains. The chapter also provides specific policy recommendations for policymakers, professional orga-nizations, and managers of SMEs that can accelerate digital transformation and turn financial reporting into a basis for transparency, growth, and long-term sustainability.