Accounting information systems is designing a data processing system using software. It can also be done manually. The computerised systems make accounting job easier by the use of software which can compile financial, tax and payroll data. It can perform other bookkeeping functions. The system collects and processes transaction data. Then it disseminates financial information which management and company stakeholders use to make decisions.
Computerised financial information systems are faster and more efficient in processing data. The use of hardware such as scanners automatically generates accounting information without much ado. The information is available almost immediately. The cost of hardware such as computers is low and the availability of cheaper and user-friendly accounting software makes accounting information systems affordable. Computerised financial systems enable users to access it promptly by the click of a mouse. Unlike manual, which by the way is still very much in existence as some companies want to keep both electronic and manual accounting information systems, the user does not have to go through a pile of paper work in order to locate the information he needs.
Accounting information system makes the maintenance of a bloated financial department irrelevant. The software does most of the work that would otherwise require several employees. The accounting software can journal and prepare documents such as the trial balance. Journals and ledgers are recorded in the computer data bases. There is also software that can perform functions such as billing budgeting and preparing payroll. Accounting information systems help cuts the payroll for accounting staff substantially.
The benefits of accounting information systems are obviously immense. But there is also a downside such as losing information if the system is attacked by computer viruses. Of courses antivirus software has improved, but no computer or computer system is 100 per cent immune from virus attacks. The other problem is power failure. When that occurs information could be lost if not properly saved. The computerised information systems are also prone to fraud if there are no proper internal and external controls.