Accounting information systems (AIS) simplify financial reporting for purposes of making well-informed decisions. They include all the components of the accounting process: people, procedures, data, software, devices and security. The software is on a device like a computer, and the security is incorporated in the software. People put together procedures and enter data into the accounting software.
Types of AIS by Processing Mode
Batch processing systems, online batch systems and online real-time systems are the three types of accounting information systems classified by mode of processing. In batch processing systems, you enter transactions when they occur and periodically process and integrate the transactions into the accounting record by running a batch process either daily or weekly. Online batch systems are the same as batch processing systems, except that you record transactions and process batches using online-based accounting software. When using an online real-time system, the software integrates transactions into the accounting record when you record them. There is no batch processing.
Types of AIS by System Objectives
People purchase accounting information systems for one primary reason: to record financial transactions. Accounting information systems can also serve as a tool to help managers make decisions, usually through customised reports. Transaction processing systems, decision support systems and expert systems are the three types of AIS systems by system objective. The primary objective of transaction processing systems is to process transactions and generate reports. Decision support systems use different areas of business to build models. The software can point managers toward potential problems and through decision models, and help the manager resolve the problems. Expert systems incorporate specific expertise in the company's industry to help the manager diagnose and solve problems.
Types of AIS by Interaction with Environment
Transformational systems, such as batch processing and transaction processing systems, transform information and generate reports based on that input. Reactive systems, such as expert systems, are event-driven systems that react to external and internal stimuli continuously.
Types of AIS by Age
Types of accounting information systems based on environmental interaction are manual systems, legacy systems and integrated IT systems. In modern times, small, older businesses are the primary users of manual systems. Manual systems require a source document and a turnaround document. You record entries in the general ledger, general journal, special journal and subsidiary ledger. You can find legacy systems in older medium-to-large businesses. Legacy systems are AIS systems customised to the needs of a specific business. They take into consideration operating practices that are unique to a specific business. Legacy systems may be difficult to integrate in a newer system because of their unique structure. Many of these older legacy systems are written in older computer languages, like DOS. Modern integrated systems are Windows-based and considered much more user-friendly than legacy accounting systems. They generally cost less than legacy systems, can be quickly implemented and have fewer bugs.