An accounting information system (AIS) is a computerised system used for recording accounting transactions and information. Companies either use a manual accounting system or a computerised system. An AIS assists companies in the accounting cycle, making the steps of the cycle easier to keep track of and record.
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AISs offer a system of accounting that is fully integrated. When recording accounting transactions manually, several entries are typically required for every transaction. With an AIS, when a transaction is recorded, the computer posts all entries correlating with the transaction. This saves an accounting clerk time and helps them to avoid mistakes.
Speed and Accuracy
An AIS offers a faster way of recording financial information. It also allows employees to find records more quickly. If employees need to locate an invoice total, price or date of a transaction, a computerised system offers a faster method of information location. Accuracy is easier to obtain with a computerised system as well because an accounting clerk enters only one set of numbers, which is then transferred automatically to several different areas in the system.
Automatic Document Production
A computerised accounting system does the work an accountant once did with a manual system. Computerised systems can be set to automatically pay bills and print checks. They can also create purchase orders, invoices and credit memos. Payroll tasks are also done automatically. The computer operator sets the system to do these specific tasks at different times of the month. The computer system then automatically completes these tasks when they are scheduled.
This type of system offers end-of-month advantages for businesses. Adjusting and closing entries are recorded easily on the system. The creation of financial statements are made easy with a computerised system. All of the company's financial information is stored in the system, allowing financial statements to be calculated easily and quickly. An AIS is also great for ageing reports for management. Ageing reports show managers the total amount of money owed to them in Accounts Receivable as well as the total amount the company owes in Accounts Payable. These ageing reports also show current amounts and past due amounts including how past due payables or receivables are.
Storage and Backup
AIS systems are great storage devices. It is always recommended with computers to backup information stored to avoid the loss of the information. Regular backups of the information should be scheduled daily, weekly, and monthly or whenever the company determines it needs to be. Computers a convenient place to store information because it does not take up a lot of room and the information is all conveniently located in one place.
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