The study examined the adoption of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) and its influence on the financial performance of Small and Medium Enterprises (SMEs) in Kampala, Uganda. Using a quantitative cross-sectional design, data were collected from 310 SME operators across Kampala’s five administrative divisions. Descriptive statistics and Pearson correlation analysis were employed to analyze levels of awareness, adoption, and incentives for EFRIS use, as well as their relationship with SME performance. The findings showed that SMEs had a moderate level of awareness of EFRIS but comparatively lower levels of actual adoption, indicating a gap between knowledge and practice. Human and cognitive factors such as training, digital literacy, and positive perceptions strongly supported adoption, while infrastructural and institutional factors including internet connectivity, technical support, and government incentives, were only moderate and constrained effective use. Correlation results revealed significant positive relationships between EFRIS awareness, adoption, and SME performance, particularly in terms of profit growth and financial reporting accuracy. The study concludes that strengthening incentives, infrastructure, and technical support is essential for enhancing sustained EFRIS adoption and improving SME performance in Uganda.