Components of an Accounting Information System

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In today’s businesses have an important responsibility to keep accurate records. These records can show how successful or how vulnerable a company is. The days of keeping paper records are long gone and most large companies have gone to an accounting information system to keep track of day to day records, as well as month end and year end reports. These systems allows users to collect, store, manage, process and retrieve data and report the company’s financial status. The accounting system has 6 main parts.

An accounting information system is only as good as the people who input the data. These users can be anyone from an accountant, consultant, manager or chief financial officer to a simple accounting clerk. The system helps the different departments within a company work together. The management can set sales goals, and from there the staff can then order the necessary amount of inventory or goods needed to produce their product. When a sale is made, the salesman enters the orders into the AIS. From there, the accounting team can create the invoice for the customer, the warehouse can put together the order, and then the shipping department can ship or deliver the order. The accounting receivables department is notified of the order and can set up the billing. The customer service department can track the order and the system can create reports for management. At any point in the process, managers can see the costs associated with inventory, shipping or manufacturing. They can also run reports to show if they are currently on track to hit their budgets.

The procedure and instructions of an accounting information system are the methods used for collecting, storing, retrieving and processing data. Most of these methods are automated, but some of these can be manipulated manually as well. The information used can come from internal employees or customers’ online orders. The employees will be trained on how to correctly input the data into the system. It is...
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