Accounting Information Systems
The method of tracking and analyzing accounting data has changed throughout history: the use of an abacus to count evolved into handwritten records, and made easier by the introduction of simple technology advancements, such as the calculator. Accounting information systems are the result of the accumulation of knowledge between technology, accounting and business strategy. An AIS system collects, stores and processes all financial and accounting data for a company and communicates this information to system users, often in a computerized format. Management, accountants, consultants, auditors and even staff may be granted use to an AIS system, depending on the utilization and need for access. Accounting information systems, if utilized correctly, quickly become the center of activity and resource for information pertinent to business practices.
Accounting systems were initially developed as solutions to relating all transaction data within a company and were generally created by the company itself; however, the costly development and maintenance of such a program eventually led to the adoption of software packages that could be customized to meet the needs of the organization. The predominant AIS systems today are often joined with a centralized program for business operations called enterprise resource planning (ERP), and relate to the other functions of the system to include inventory & manufacturing, human resources, and supply chain management. These interlinked functions communicate data across the interface, providing a wide spread of information across a business. The preference for this availability of knowledge about a business has led to the vast expansion of the accounting information systems market, demanding accountants to become proficient in information technology and various software packages as well as maintain their professional knowledge of accounting practices.
Accounting information systems provide numerous benefits to end users, despite the efforts expended during research of AIS systems and implementation of the system in a business. AIS streamlines and automates reporting by accurately organizing data information and generating applicable reports based on the needs of decision makers. By providing the ability to view current and historical information regarding the operations, net position and cash flow of a company, AIS enables users to act effectively and quickly based on the automated information, rather than acting on dated or irrelevant information due to delayed report generation. Management efforts are simplified, as in the case of a weekly accounts receivable review: with the ability to pull an aged accounts receivable report quicker than previous systems provided, organizations can keep a greater understanding of delayed payments and take the necessary steps to collect cash sooner, benefiting the short and long-term decisions regarding the use of cash.
Businesses considering an accounting information system today have the benefit of a market suited to meet the needs of nearly every type of industry and size; QuickBooks, Peachtree Accounting, Microsoft’s Small Business Accounting, SAP and Oracle products as well as integrated enterprise resource planning programs meet the unique needs of different businesses while also allowing the customization and assurance of accuracy necessary to successful use of the product.