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Autor: anton 01 December 2010
Words: 796 | Pages: 4
An accounting information system is system that keeps record for a business to maintain its accounting system. Accounting information systems combine the study and practice of accounting with the design, implementation and monitoring of information systems. The use of such systems uses modern information technology resources together with traditional accounting methods to provide the users with the necessary information to manage their Organisation. Accounting information systems has its strengths and weaknesses also, but strengths more so than weaknesses in some cases.
Basic accounting information systems include entering customersâ€™ records, billing customers, collecting customer payments, keeping track of inventory, purchasing new stock and materials, paying employeesâ€™ etc. users of this accounting information can include internal and external parties. Internal users of accounting information include managers and owners. They would use special purpose reports which are prepared weekly, monthly, quarterly and are prepared for their specific needs, and what they need to know about business .external users include investors, customers, clients, government agencies and employees. They would use general purpose reports which are prepared half-yearly or annually. It provides general information for general users.
Records other than reports that are kept for accounting systems include purchases, sales and nominal ledgers, and cash books of the business. Whilst all these records would have previously recorded using a paper based process, now information technology has made it more efficient for businesses to prepare all the reports using computerised accounting systems.
Computerised accounting systems â€“ Advantages and Disadvantages
Some computerised software that is available includes: MYOB, QuickBooks, Sybiz, ACCPAC and Attache. Computerised accounting systems apart from the obvious time saving advantage has many more, as well as disadvantages. Some advantages include: a reduction in processing costs by using user friendly programs like MYOB, reducing the amount of errors compared to manual systems and faster response time fro customers checking current balances for example. Some weaknesses may include: failed systems- can be caused by inexperienced staff and if regular back ups arenâ€™t made there would be a major loss to the business, internet and computer viruses- if undetected can destroy all files so a security system must be implemented to avoid this from happening, power failure, hackers and fraud also.
Types of accounting information systems
Accounting information systems supports the accounting function. Accounts receivable, accounts payable and general ledgers are usually considered to be accounting information systems. Several other common accounting information systems are: fixed asset accounting- its purpose mainly to account for such assets such as buildings, land and equipment. Budgeting-this system projects revenues and expenses and compares them to the actual figures. Tax accounting- the purpose of this system is to prepare business tax reports to pay taxes.
An accounting information system is an important part of the accounting process and accounting cycle. The accounting cycle is â€œa ten step process, a simple means of organizing and keeping track of financial transactions, accommodates the needs of both individual and large corporations. Each time an item is purchased or sold it must be recorded.â€(Encarta.msn.com-cited 8th April) the steps include: 1. Transaction made 2. Analyse and classify 3.Put in corresponding journal 4.Post from general journal into general ledger 5.Trial balance 6.Make any adjusting entries 7.Adjust trial Balance 8. Prepare financial statements 9. Close entries 10.Post closing entries. These routine steps in processing accounting data occur during an accounting period which is 12 months.
Operation of an accounting system
The operation of an accounting system has three basic steps: input, process output. Input devices that are commonly used to record transactions include personal computers or scanning barcoding devices for data entry. The use of barcoding has made it more efficient for businesses to record what comes in and out. Process- the double entry accounting system is the basic processing model.
Output â€“devices including computers, printers, electronic communication devices and e-commerce. The operation process of the accounting system is a strong part of it. Between the stages of the operation process, data is changed into information so it can be more useful to the user.
â€œOne of the major impediments to the successful implantation of accounting innovation is that management accounting systems are generally used to serve the decision control needs to top management, while at the same time purportedly supporting the decision management needs of lower level management .â€œ(Abacus Vol 41 No 3 2005 Pg 217) however the speed of technological change means that changes in management practices and tools are unavoidable, therefore it is better to think ahead rather than wait behind and eventually go out of business.
An effective knowledge management system links to the decision making process by regulating the flow of information available to decision makers. For example, modern information systems allow more direct contact between managers and front line staff, changing the role of the middle management level or eliminating it entirely.