The agriculture sector is experiencing growing pressure to digitalize its operations, which requires accurate and systematic recordkeeping and is crucial for improving operational, decision-making, and financial sustainability. However, evidence from prior studies highlights that many farmers lack the necessary skills to effectively manage records and adopt Accounting Information System (AIS) tools. The aim of this research is to explore the challenges faced by smallholder farmers related to AIS competencies in managing recordkeeping. This research discusses four critical competency gaps: lack of technological skills in operating AIS platforms, poor literacy and numeracy abilities, limited knowledge and awareness of basic accounting principles, and inconsistent training and support. The gaps hinder the utilization of digital tools for farm records, resulting in inconsistent data management, which affects farming business growth. The research employs a qualitative approach, drawing on semi-structured interviews with participants, including farmers, relevant officers, and stakeholders, to examine the depth and implications of these challenges. Findings suggest that the lack of AIS-related competencies not only leads to poor farm management decision-making but also decreases farmers’ opportunities to obtain financing aid, enhance their market, and implement sustainable practices for business growth. Hence, improving AIS competencies may significantly enhance business growth, traceability, and sustainability.