Tag: accounting information system

All You Need to Know about Accounting Information Systems (AIS)? Let’s start with a question, what is the first thing that pops into your head while running a business? For any business, to run smoothly the first & foremost important thing is proper cash flow and reports. Irrespective of the size of the business appropriate cash flow is extremely important. Here comes into play the accounting information system. An accounting Information system (AIS) is the systematic process of collecting, storing, and processing financial & accounting data which is used by internal accountants to report the information to investors, creditors & tax authorities. The entire process is termed an accounting information system. This system disseminates the company-related information to the stakeholders for faster decision-making. It is the responsibility of an accountant to work in-depth with the AIS and ensure perfect accuracy in the company’s accounts & books. All financial records should be clean and recorded properly in the books. The information should be stored in a manner that is readily available & accessible to the users as & when required. What are the Benefits of an Accounting Information System? The accounting information system provides finance-related information across the organization, it also has several other benefits & advantages that help the business owners to run their business smoothly & effortlessly. Let’s discuss the benefits further: Improved Interdepartmental Communication AIS helps in building a proper & concrete flow of information path across various departments within a company. For instance, the sales department uploaded the sales budget, which can be readily accessible to the inventory department which is very important for further process. Now once the inventory is purchased, the sales department can be well informed that the stock is in. This way the information is communicated within all the departments. Having the important information on hand helps in better business planning & decision making. User-wise Data Access Controls Unlike the manual method, which is likely to be a risk to outsiders, the business owners can set user-wise data access controls in AIS. It ensures that the data will be available to only responsible users and not to any outsider. AIS also commonly referred to as accounting software helps in disseminating crucial information to a specific user by providing secured data access. Business Insights Another very important benefit that accounting software brings in is displaying the actual business insights. Business insights are very important for business owners to know the exact good & worst performing areas of the business. This not only helps in better business planning but also ensures business growth. Having the key performing areas, the business owners can decide where, when & how much money to put in. This will keep the growth stats moving upwards. What are the Functions of AIS? There are basic 3 main functions of an AIS (accounting information system) i.e. Efficient & effective storage of financial data. Manage the data & produce information in form of useful reports. Ensure 100% control over data & accurately process it. What are the Types of AIS? The accounting information system can be broadly categorized into three types, i.e. manual. Legacy, Integrated system Manual Systems These are primarily used by small businesses where the entire system is managed manually. The software is not integrated with hardware & accounting requires the support of documents. This is done because the business size is small, and it doesn’t need a complex system to work upon. However, the manual system must have documents, a general ledger, special journals, general journals, etc. Free Download Accounting Software Legacy Systems These were in use before the advent of the high-end technically advanced accounting systems. This system helps in knowing the historic data of the firm but lacks the flexibility & reliability of modern-day software. Modern Systems These are windows-based technologies that are more user-friendly than legacy accounting systems. They are cheaper as compared to legacy systems and can be installed quickly with very few bugs. How is AIS used? An accounting system is broadly used to collect, store & process the financial & accounting data of an organization. The data stored is accessed by the decision-makers. An accounting information system forms a centralized system where the financial information is stored by authorized persons & disseminated among various departments of the organization. Crucial information like revenues, sales & purchase deeds, tax, employee information, customer data, etc is stored in an accounting information system. An accounting information system has an inbuilt structure to store the information. Since AIS includes multiple fields that require necessary inputs, it is crucial to maintain high-standard securities to prevent any malicious virus attacks. Accounting software like Marg ERP empowers the business owner with a complete digital solution. Apart from just storing the data, it helps you in handling multiple verticals of your business. You can easily generate most of the crucial financial reports, manage inventory, file GST return, and more. Why Using Accounting Information System is Important for Growing Businesses? AIS...