Let’s face it – the motive of every company is to secure their business finance for long term growth. Business runs by customers and growth comes with proper financial management. When it comes to finance, accounting is something which aid you in controlling and making proper business finances records. What if you’re bootstrapping an accounting firm? What if you aren’t an expert? How will you secure your business finances? How will you gather financial information? Any guesses? With the help of Accounting Information System (AIS), you can control business accounting to a great extent.
So, let’s talk everything about AIS below.
What do you understand by accounting information system (AIS)?
In simple words, an accounting information system is a tool or software consisting of people, records, methods, and used to collect financial information about business events. This information you can process to communicate with end-users and make better financial decision. So, as a business owner, accounting information system will work best for you in collecting, recording, organizing financial transactions for your company.
What is the main goal of AIS? The gaol of AIS is to record financial data and finally convert it into useful financial information.
Let’s dig deeper and talk more about AIS.
Why do companies use AIS?
When it comes to main the highest level of accuracy of company’ finances, AIS are what companies prefer. There is no doubt that most of the companies use AIS to record financial transaction and accounting records. The tool allows specific employees to access the information they need. And also limit the information to others thereby prevent company’s data. Why companies prefer to use AIS is because it helps companies detect fraud and ensures that the finances run smoothly. With well-designed ASI, every person within the company can access the same system and retrieve the same information in real-time.
What does AIS include? A typical accounting information system comprises data pertaining to customer information, employee information, revenue, expense, tax information and much more. With the help of AIS, companies can make a powerful accounting report, trial balance sheet, and everything related to business accounting.
Now have a look at the functions of AIS.
Top functions of accounting information system (AIS)
There are basically two functions of AIS. Have a look at them below.
1. Efficient collection of financial data
The first function of AIS is to collect financial transaction of the business. Recording business financial transaction is important in making reports of business finance.
2. Controlling finances
Yes, with proper AIS and accounting records, the business owner can control and process data accurately.
3. Providing information for decision-making
With AIS tool, you can easily produce managerial report, financial statements, and balance sheet for CFO for better decision making. There is no doubt that AIS plays a crucial role when it comes to collect data of the company.
Important elements of Accounting information system you must know
If you’re still reading this article, then you must know about the elements of AIS below-
Data is one of the significant elements of AIS. With great database storage, AIS store information in central information for appropriate reporting. In fact, AIS can store data or any information pertaining to company’s business practices that can impact the business finances.
The list of types of data which includes in AIS are:
- – Tax information
- – Inventory data
- – Vendor invoice
- – Sales report
- – Payroll information
- – Sales order
- – Purchase summary
- – Client’s billing statement
There would be many more data to store in AIS which may vary from company to company.
Another element of AIS is people. So, anyone who uses the information system is a significant part of this tool. The people of this tool include managers, accounts, CFOs, and other C-suite executives, auditors, financial analysts.
Simply putting, internal control is all about security measures used to protect data stored within the AIS. So, internal control include every sensitive information such as biometric verification, encryption methods, etc. The tool filters out information without verified access and making information available for those who have full access.
The bottom line
Accounting information system (AIS) is a significant tool for storing financial information of the business and making great decision of the company in the future. For any company and financial firm, an accounting system like AIS is everything for collecting, recording, and organizing, financial transactions for your company. In fact, you can also hire virtual bookkeeping services in Philadelphia at affordable price.
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