An accounting information system (AIS) is a system that first collects and stores data and then processes it into information used by investors, creditors, and managers. An accounting information system provides accurate and timely financial information for internal management purposes. This information generated from an AIS can ultimately help decision makers to manage organizations more efficiently. The term AIS is most commonly referred to as a complex computer-based system combining the resources and capability of information technology with traditional accounting methods and controls. It can also integrate and fulfill departmental and company-wide objectives. An Accounting Information Systems are composed of 6 main components: 1.Software: application that processes the data. 2.Internal controls and security measures: what is implemented to safeguard the data. 3.Data: data that is related to the organization and its business processes. 4.People: users who operate on the systems. 5.Information technology infrastructure: the actual physical devices and systems that allows the AIS to operate and perform its functions. 6.Procedures and instructions: processes involved in collecting, managing and storing the data. When an AIS is implemented, organizations sometimes makes the mistake of not considering each of these six components and treating them equally in the implementation process. This results in a system being "built 3 times" rather than once because the initial system is not developed to meet the requirements of the company, the organization then tries to get the system work and ultimately, the organization begins again, following the right procedure so that they can be benefited from AIS and then gain huge profits. Improving the Flow of Work Improving the flow of work in every department of an organization often gets boosted by the implementation of an accounting information system. Departments outside of accounting must understand how critical information is processed through the company's internal financial information system for many reasons. Source documents such as invoices, purchase orders, employee expense reports, time cards for payroll input and asset acquisition forms-must all find their way from the originator to the accounting department. Depending upon the software, the AIS requires a information for different parts of the process be manually input into the system. This often determines the flow of work of other departments in related processing financial data. Advantages of Accounting Information System (AIS) 1.A big advantage of accounting information systems is that they automate the reporting. Reporting is an important tool for companies when they want to see accurate summarized, timely information which is used for financial reporting. 2.The accounting information system retrieves data from the centralized database, processes and transforms it and generates a summary of that data as information that can now be easily used and analyzed by business analysts, supervisors or other decision makers. 3.No need to conciliate financial and cost profits. 4.The probability of error is less because recording takes place in one set of accounts. 5.No confusion arises from different stock valuations and methods of depreciation and profits. 6.Information generated on an integrated system is quicker, thus helping management in decision making. Many organizations don't spends the amount of time and money on the analysis, design, documentation, and training, and move into software selection and implementation. It is a proven fact that if a detailed requirements analysis is performed with proper time being spent on the analysis, that the implementation and ongoing support will be minimal. Organizations who skips the steps necessary to ensure that the system meets the needs of the organization are often left with low profits, frustrated end users, costly support and information that is not current or correct.
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