Sail Food Production Company is one of the largest food manufacturing factory in Nangarhar Province, Afghanistan. Despite countless hours spent on manual bookkeeping, its owner always complained about errors when reporting profits and losses on the company’s balance sheets.
At the close of each monthly accounting period, the company was always late in submitting profit and loss statements to the Provincial Department of Finance. Similarly, there were many inefficiencies in production and raw material tracking due to the absence of a proper inventory control system.
The scarcity of information technology integration within business operations has limited the development of Sail Food Production and many other Afghan small and medium enterprises (SME) as they are trying to remain competitive in a global business environment. How could this be improved?
The e-SME initiative: A technology solution to boost business growth
As part of the Afghanistan Rural Enterprise Development Program (AREDP), the Ministry of Rural Rehabilitation and Development piloted E-SME, an Enterprise System software package designed to help businesses improve their accounting, payroll, inventory control, and sales workflows. AREDP provided the Enterprise Systems to 10 SMES across five provinces (Nangarhar, Parwan, Balkh, Bamyan, and Herat) and those SMEs have already reported improvement in the following areas:
- E-invoicing has eliminated the need for manual inputs of invoices and greatly enhanced cost control and reduced transaction and overhead costs.
- The new transaction recording system has generated sound financial statements. As a result, businesses now have access to larger loans from commercial banks.
- The system’s tax module has helped prevent duplication of efforts and streamlined tax reporting and payment to the government.
Mr. Ajab Shah, Sail Food Production Company’s Accounting Manager has been trained extensively on the new Enterprise System that was recently launched in the company.
“Previously, I had difficulties keeping records of all the stock items and financial transactions,” he reports. “We were spending a lot of resources and time collecting and recording data and our reports had errors. Thanks to AREDP, our financial recording and reporting system has now significantly improved and with this system, I am able to measure the level of productivity and can generate various reports on time with zero errors.”
Mr. Ahmad Shah, another beneficiary who runs the Hashim Naeem Tailoring Company in Parwan said:
“We did not have proper records of all our clients, orders and workers in order to calculate the charges of each individual worker based on the number of orders he/she worked, but now with the new Enterprise System, we have a proper list of clients, contractors, stock and workers detail and we can track down orders from our clients and can now respond their needs on time.”
This post first appeared on The World Bank End Poverty in South Asia Blog.
Publication does not imply endorsement of views by the World Economic Forum.
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Author: Ikramullah Quraishi holds a Master of Business Administration with a specialization in Management Information systems.
Image: A man attends a computer class at the Wana Institute of Technical Training in Wana, the main town in Pakistan’s South Waziristan tribal region bordering Afghanistan. REUTERS/Faisal Mahmood