ACCOUNTING INFORMATION SYSTEM
When you buy something from a consumer market it requires accounting for taking into consideration both the customer and the company. For the chosen thing, the client swaps money in the form of cash, debit, or credit card.
The company collects the money and gives the tasty beverage to the consumer. While individuals may not keep track of every purchase, businesses use double-entry bookkeeping to keep track of every transaction. Double-entry accounting necessitates the recording in the journal of at least two things, such as cash and revenue from sales. Somehow, accounting is a business language that is a part of our lives on a daily basis, even if we aren’t aware of it.
WHAT IS ACCOUNTING?
Accounting is the practice of keeping track of a company’s financial activities. Summarizing, evaluating, and reporting these transactions to oversight authorities, regulators, and tax collecting bodies are all part of the accounting process. Accounting financial statements are a brief overview of financial transactions over a period of time that summarizes a company’s activities, financial condition, and cash flows.
ACCOUNTING SOFTWARE PROGRAMS
As we have determined that accounting is an essential part of any business to run, so you might be wondering how these business organizations manage their finances and look after them? Although there are assigned accountants for these things so much cash and money record to handle is a difficult task. That is why software systems have been developed over the period of time that has made accounting easy.
ACCOUNTING INFORMATION SYSTEM
Similarly, an accounting information system (AIS) performs all activities that an accountant needs such as collecting, storing, and processing financial data. It can analyze, make reports. It is very useful for accountants, consultants, business analysts, managers, chief financial officers (CFOs), auditors, regulators, and tax agencies. A computer-based technique is used to track accounting activities in combination with IT resources. Traditional accounting procedures, such as the use of Generally Accepted Accounting Principles (GAAP), are combined with contemporary information technology resources in an AIS.
COMPONENTS OF ACCOUNTING INFORMATION SYSTEM
• PEOPLE
The beginning and conclusion of all accounting activities have a person or people. There is a stakeholder who feeds the system with information and another stakeholder who requires that information. An accountant, for example, keeps track of financial data and makes it available to a variety of parties, such as the company’s owner, shareholders, creditors, and the government.
Anyone who makes use of the information system falls under this category. Accountants, managers, CFOs, as well as financial analysts and auditors, might all be included. Through the use of AIS, different departments are able to collaborate more efficiently. The AIS data may be examined by consultants to look for variations in costs, sales, and revenue. This data may be used by auditors to evaluate the company’s internal controls, financial position, and accounting conformity.
• DATA
The AIS frequently utilizes a database structure to maintain all of the pertinent data in one place for ease of record-keeping and reporting. By using a framework similar to structured query language (SQL), you may easily filter and obtain AIS data for use in reports. The AIS will keep track of any information pertaining to the company’s financial operations that might have an influence on it. The kind of information that goes into an AIS varies from business to business, however, it may include the following:
- Information on products in stock
- Information about taxes
- Register check
- General ledger
- Statements of accounts payablefor clients
- Orders placed with the business
- Requisitions to buy
- Invoices sent by suppliers
- Reports on sales performance
- Figures pertaining to your paycheck
- Information about the passage of time
• PROCEDURES
An accounting Information System follows a set of established processes and procedures to execute specific functions. This is a must-have for an AIS if it is to maintain consistency. AIS is capable of doing a task either manually or automatically. For manual systems, this action must be communicated to the person handling the data, or programmed into the system itself.
• SOFTWARE
The software component of the AIS is critical for the company’s storage, retrieval, processing, and analysis of financial data. AIS used to be a manual method, but today’s firms utilize software systems that can be tailored to fit the specific demands of each business.
AIS’s most important features include quality, dependability, and security. Managers are reliant on the information it generates to make business decisions, and they require high-quality data to make informed choices.
It is possible to tailor AIS software systems to fit the specific requirements of different sorts of companies. The software can also be built in-house with significant input from end-users or can be produced by a third-party firm particularly for the organization if a current program does not match the demands of the enterprise.
• IT INFRASTRUCTURE
IT infrastructure refers to the hardware needed to run the AIS, such as computers, servers, routers, and other items most companies already have on hand. It is essential that the IT infrastructure used for the AIS is compatible with the software chosen for it, runs effectively, and is optimized for other applications the business may be utilizing. Contingency plans for things like power outages, hardware failures, and other factors that might interfere with the system’s capacity to function as intended should be included in the infrastructure design.
• INTERNAL CONTROLS
The security procedures used to secure data contained within the AIS are referred to as internal controls. Passwords, biometric verification techniques, and encryption mechanisms are all examples of internal controls. It should filter sensitive data for workers who do not have verified access while still allowing those with full access to see it. Internal controls are an important part of the AIS since it often contains sensitive employee and customer information like credit cards and Social Security numbers, as well as financial information.
BENEFITS OF ACCOUNTING INFORMATION SYSTEM
- Cost-effectiveness
- Time effectiveness
- Easy access
- Accuracy
QBM GUIDELINE
Switching from manual to AIS-based accounting is highly advantageous to a business. QBM is a software program that protects organizations against viruses, hackers, and other assaults in order to overcome issues.
The QBM’s aim is to keep the business ahead of its competitors and provide you with competent services. We are always updating our software with new and latest technological advancements and innovations for the business. QBM enjoys the loyalty of more than 8000 clients from all over the world.
Satisfaction and efficiency is the goal that we promise to each of our clients. QBM offers its Accounting information system at a reasonable cost so don’t miss the opportunity to take your business to newer heights.
Contact us to get a free QBM trial and get started.
Or read more about; What is accounting software?
