What is Accounting Information System?

What is Accounting Information System?

 

An Accounting Information System is a procedure for gathering statistics, analyzing the statistics into information, and supplying that information to end-users. The use of an Accounting Information System (AIS) is to gather, collect, and develop accounting and financial figures and create necessary reports that businesses or other concerned parties can utilize to finalize decisions in an organization. Moreover, an AIS can be a manual method, but in recent years, most of it are automated.

AIS comprises several factors vital in the accounting process. In addition, the information covered in a software differs among organizations and business type. The usual AIS comprises of data pertaining to income, expenses, client data, personnel information, and tax liabilities. Detailed information encompasses sales transactions, purchase order, receipts & invoices, point of sale register, inventory of goods, payslip summary, ledger, and real-time financial reports.

Furthermore, an Accounting Information System (AIS) is frequently greatly protected software with pre-emptive measures taken against hackers, computer viruses, and other outside factors trying to gather information from the organization.

Purposes of an Accounting Information System (AIS):

  • Effective gathering and safekeeping of information regarding the company’s financial performances, comprising of taking the operation data from source files, logging the operations into journals, and placing figures from journals to ledgers.
  • Provide information helpful for creating decisions, as well as generating executive and financial reports.
  • Give assurance that necessary protections and controls are put into action to precisely bookkeep and generate data.

The several outputs of an AIS demonstrate the flexibility of its data operation capacity. The system generates reports comprising of company receivable aging that pertains to client information, asset depreciation matrix, income and expense report, and other accounting reports. Client database, taxable transactions, and inventory updates may likely be produced as well. Nevertheless, there are also limitations into the system like taking into account the memos and communications of the company. Presentations are likely not incorporated in the system as these things do not precisely pertain to an organization’s financial & accounting reporting.

AIS tries to cater to all the company’s major areas. Inside the system, the sales division can take a look into the sales budget provided by the organization. This data shall be utilized by the inventory division to perform stock-taking and procure materials. Upon the procurement of stocks, the system can inform the accounts payable section of the required transaction. The system may as well provide the necessary information regarding a client order so that the production, delivery, and customer service division shall be alerted of the sale.

One aspect important to Accounting Information System pertains to internal control. Rules and guidelines can be implemented within the software to guarantee that sensitive business, client, and vendor information remains within the organization. With the help of access control security, personnel logs, and division of responsibilities, users can be restricted to just the applicable information required to execute their business role.

Whatever your business industry, your organization can always rely on a dependable business software. In case you want your business to have a custom-made software, feel free to contact Quadrant Alpha, one of the pioneers in business software development in the Philippines.