Type of paper: Essay

Topic: Accounting, Information, System, Time, Business, Accounting Data, Accounting System, Organization

Pages: 1

Words: 275

Published: 2020/12/15

Accounting Information System

An accounting information system(AIS) is an automated way of collecting, storing and processing the accounting data using the interface of informational technology. This system scores over manual accounting system by providing error free calculations, reduced time and storage hassle and instant report building. One of the most widely used accounting information system(AIS) in the United States, SAP, provides unique feature along with basic accounting data recording such as creating connection with customers and the suppliers.


An accounting information system(AIS) is a subset of management accounting system, which collects, stores and process financial and accounting data using the resources of informational technology. The outcome of the AIS, i.e. statistical reports and others, are used by the management for internal decision makers and also by external parties such as creditors, regulatory authorities, etc. An accounting information system is typically composed of following elements:


Procedure and Instructions
Informational Technology Infrastructure
Internal Controls
Advantages of AIS:
i)Save time and efforts
Using an accounting information system can save time for business owners and their accountants as all the calculations are performed quickly. Moreover, the transactions heading are required to put only once. Thus, with reduced time on keeping accounting records, business owners can spend more time on other business functions.
ii)Error-free accounting
Manual number crunching is largely exposed to human errors that can cause big losses to the organization in the form of inaccurate inventory count, inaccurate sales record, et cetera. Thus, accounting information largely reduce such calculation errors and shows true and factual image to the organization.
iii)Instant Reports
User of accounting information system can gain real time reports on stock evaluation, profit &losses, sales growth, etc. without having sift through stacks of paper for hours as in manual accounting.

Disadvantages of AIS:

i)Learning the system
Every accounting information system has its own way of application, thus, the individuals must be appropriately trained to work on such systems. This can be both difficult and time consuming, and can induce disadvantage of time and manpower.
ii) Loss of information
Unlike manual accounting system, all the accounting data and transactions are stored on a computer device, which always carry the risk of loss of information through system crash and other reasons.

Capabilities of AIS over manual accounting system

i)Error free accounting
Many a times business owners have faced losses in the form of tax penalties or inaccurate recording of accounting items courtesy the manual accounting they are following. It is but obvious that manual number crunches and transaction recording is prone to calculation flaws. However, an accounting information system provides accurate calculation which can save lot of dollars for an organization.
ii)Convenient Storage
A person following manual accounting system have to record and store all the accounting data on whole bunch of papers, which are difficult to store effectively and also for future reference. However, since accounting information system uses a computer interface, there is no issue in storing the data or referring it in future.
iii)Single time entry

Accounting information system also requires a single time entry of the transaction.

Features of Basic SAP License in USA
In United States, SAP is the most widely used accounting information system and provides following features to its users along with recording accounting transactions:

Capabilities to set up connection with customers

Capabilities to set up connection with suppliers
Creating and requesting product compliance declaration
Storage space of 1 GB(basic package)

Works Cited

Accounting Information System. n.d. 11 March 2015 <http://www.investopedia.com/terms/a/accounting-information-system-ais.asp>.
Magloff, Lisa. Advantages & Disadvantages of Computerized Accounting. n.d. 11 March 2015 <http://smallbusiness.chron.com/advantages-disadvantages-computerized-accounting-4911.html>.
SAP.com. SAP Product Stewardship Network. n.d. 11 March 2015 <http://www.sap.com/pc/tech/cloud/software/product-stewardship-network/pricing.html>.
Vanberen, Jenniffer. The Disadvantages of Accounting Information Systems. n.d. 11 March 2015 <http://www.ehow.com/list_6767205_disadvantages-accounting-information-systems.html>.

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WePapers. (2020, December, 15) Good Accounting Essay Example. Retrieved April 24, 2024, from https://www.wepapers.com/samples/good-accounting-essay-example/
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"Good Accounting Essay Example." WePapers, Dec 15, 2020. Accessed April 24, 2024. https://www.wepapers.com/samples/good-accounting-essay-example/
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"Good Accounting Essay Example," Free Essay Examples - WePapers.com, 15-Dec-2020. [Online]. Available: https://www.wepapers.com/samples/good-accounting-essay-example/. [Accessed: 24-Apr-2024].
Good Accounting Essay Example. Free Essay Examples - WePapers.com. https://www.wepapers.com/samples/good-accounting-essay-example/. Published Dec 15, 2020. Accessed April 24, 2024.

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