The Accounting Information System(DAC0163) Disclaimer.

Talking about the Accounting Information System (AIS), we can know that there are many types of brand accounting software sold out there. For example, UBS, MYOB ( Mind Your Own Business ) and many more. It depends on the organizations to decide which one is the best for them to use in their own companies.

What is 'Accounting Information System' refer to?

• It would become easier when we know the three elements/components in Accounting Information System: 

1. Accounting can be defines as an information system, identifies, collects, processes, and communicates economic information.
2. Information is an useful or raw data that we need to answer the questions and must be the correct ones.
3. System referred to the technology that we use to make easier and faster when doing job. Besides, it is a framework that focused on a set of objectives. 

• So now, we can know that accounting information system is a collection of resources and communicated to a wide variety of decision makers.

• The purpose learning the Accounting Information System:

1. It's fundamental to accounting
2. Technology skills are important to student careers success.
3. AIS course complements to other  system courses.
4. AIS topics impact corporate strategy and culture.

Advantage of Accounting Information System

Speed

The main benefit of information systems in accounting is the speed of processing tasks. Data is entered once and can then be used and reused in compiling reports by literally pressing a button. If a transaction needs correction, it is easily done, with reports generated afterward at speeds never possible with manual accounting systems.

Classification

When data is entered in an accounting system, manual or computerized, an accountant needs to classify it in a detailed fashion. For example, a transaction could be a sales revenue or an interest revenue. Using information systems, this classification process is easily accomplished with a drop-down menu from which you choose the proper category. You can also quickly generate reports involving classifications. With a manual system, this process takes much more time.

Safety

Once data is entered into a computer, it is safe. The chances of losing data are remote, especially when you perform regular system backups. In manual systems, paper pads can be lost or damaged more easily. You can save data on the Internet, where it will not only be accessible anytime you need it but will also still be secure even if your computer is lost or damaged.

Objective

One advantage of accounting information is that it is objective and based on generally accepted accounting principles. These are rules to be followed in accounting to make reports standard and comparable. Data entered in an accounting system is verifiable data, not opinions or wishes. Accounting information is unbiased.

Reliable

Another advantage of accounting information is that it is reliable. For example, when you see $40,000 in accounts payable, you owe that much to others. If you have questions about that, reports can show you how that number was calculated. Numbers do not come out from pies-in-the-sky. To make it to an accounting system, data has to make sense and to have proper documentation to back it up. In a well-run accounting department, reconciliations are made and procedures are in place to assure reliability and accuracy of information.

Analysis Tool

Accounting reports can be analyzed to provide management with financial information that can be used to run a business, plan ahead and to make changes when business is not going as expected. If sales of a certain item are flat and not as expected, accounting reports show this reality and management can make decisions about it--a clear advantage of accounting information.

Disadvantage of Accounting Information System

Cost

Although some small business accounting packages are reasonably priced, the cost of the software is not the only cost of using the software. Accounting software requires minimum standards for computer use in regards to RAM, processor speed and hard drive memory. Making a backup of your accounting data may also require more storage space than an Excel spreadsheet, which is easily copied to a flash drive. Technical support for the software may cost extra, and you can incur annual licensing fees in order to receive upgrades. If you are not skilled in software installation or accounting setup, you may also incur the cost of hiring a consultant to perform those tasks for you.

Difficulty

Some accounting software packages are designed specifically for non-accountants, but you will still experience a learning curve when converting to any software package. If you have never used accounting software before, learning the accounting terms, layouts and determining a proper setup may be more difficult than the benefits received from utilizing the software. Running your own business already comes with enough stress and aggravation. You should not add the stress of learning accounting software to the mix unless it is absolutely necessary or the gains from utilizing the software outweigh the losses.

Time

Processing expenses and invoices in accounting software will usually take more time than simply logging the expense on a ledger pad or spreadsheet software and creating handwritten invoices or spreadsheet-based invoices. If using the computer is not a large part of your daily routine, the time required to process basic daily financial data may outweigh any benefit gained from the software.

Maintenance

Maintaining accounting software not only includes performing upgrades 
to the accounting software package, but also maintaining and upgrading all the necessary equipment to utilize the accounting software as new versions can require upgraded equipment. That equipment often includes your PC or laptop, monitor, printer, Internet connection and modem, backup drive and operating system. If you do not wish to spend the time and money to keep your equipment in compliance with the accounting software, it is best to stick to spreadsheet or ledger accounting.