An accounting information system is a computer program or system which performs accounting and payroll functions. Accounting information systems can be used to record and process information on tax, payroll and any accounting related data.
Recording and compiling data
In order to process information, the first stage is recording or entering data into the accounting software. Data can be anything from profits to payroll information. The system will process the data entered and store the information in different files where it will be accessed whenever needed. After processing the data the information will be used to do a variety of things. Tax records for example will be used when tax filing is done. The information can also be shared between different branches. Accounting information systems enable businesses to forecast sales, losses and prepare comprehensive budgets.
Tailor made information systems
An accounting information software therefore records and processes accounting information. Businesses can have information systems tailor made for their specific needs. The accounting information system will have a username and password and only people who have been authorised to use it can access the information. There are certain procedures specific to accounting information systems; companies therefore require their staff to go for training before they use these systems.
Functions of an accounting information system
Once you enter your information, the system will do the payroll, produce periodical reports, inventory tracking and management, creates invoices and receipts and perform a lot of other accounting functions. All you need to do is enter the required information and everything will be automatically calculated and processed. Using accounting information can increase profitability and productivity. Different companies and industries use different accounting systems and one good thing about them is the fact that they are easy to use.
Accounting information systems save time and money
An accounting information system can save money and time for the business, there will not be any need of employing the services of an accountant. Preparing financial reports and statements is also made easier with the use of an accounting information system. Every accounting detail is recorded in these systems. Expenses, sales and profits can be recorded for future use. Audits become easy to handle if all transactions are recorded properly in an accounting system.