Accounting Information Systems
Accounting information systems are useful for companies and businesses wanting to make the accounting process easier by utilizing a computer program or other system that will perform payroll and other functions. These systems, commonly including accounting software, make it easier to compile financial data for use in taxes, payroll, and other bookkeeping requirements. Recording is the first step in these systems that are used by companies including pertinent data such as expenses and profits that are very important to keep on file. After the recording phase, the information will be processed for use. When processed, it is filed in the areas where it is most important. These systems have various groupings or categories to maintain files until they need to be used in the future for whatever reasons. The final step that is part of most software programs is the communication phase. This is the process of actually utilizing the records that have been recorded and processed. Common communications of this data will be used for payroll and tax purposes. "The thoughts of the diligent tend only to plenteousness; but of every one that is hasty only to want." (Proverbs 21:5)
The use of information systems is very important in recording vital financial data that will be used in the future. Major corporations, especially in the retail industry, will keep such data as sales, profits, expenses, and many other items for future use in financial reports. Recording will be done often on a daily basis, if not on a minute-by-minute basis with more complex and detailed accounting software. This is very important also because it will not only be used for daily practices, but will be necessary for tax purposes for the remainder of the year. Also, much of this data has to be kept on file for a number of years, in the event of an audit or other financial issues that may arise. Legal issues can cause severe problems and even end in the destruction of a company. By using computerized accounting information systems to organize and retain this data, companies have a much better chance to survive and succeed.
After the process of recording information with software, the next step that is taken is processing. With most accounting software or programs, there are different files and categories where records can be stored. This filing or storage can be done manually by the individual or group of people who works with the accounting information systems. Programs can also be set to do this automatically as information is entered into the system. Certain criteria can be set up in the program to allow the program to place files and data in the places or areas where it is supposed to go. There will usually be different categories for different data and some of the categories may include accounts payable, accounts receivable, payroll, purchasing, and other information that needs to be recorded and retained.
The final step is the process of communicating the data in the area in which it should be communicated. First, and most importantly, tax records that are recorded and processed can be communicated at the time that filing taxes is done. Some major corporations that are broken down into quarters may utilize this data on a quarterly basis. Other companies, especially smaller businesses, may only be concerned with this information on an annual basis. For large corporations, like major retailers, there are often several smaller stores or branches of the company that must share information through accounting software or systems. This information can help the company forecast sales, profits, loss, and a variety of other things. Many corporations share this information on a daily, weekly, or quarterly basis. The process of communication is probably the most important stage of accounting information systems because this is the point where results are known and records will be put to use.
The use of these systems is a very big part of businesses and corporations. Using resources available through accounting information systems allows major corporations and small businesses to record transactions and other financial information for use in the future. These tools can make the process much smoother, save money for the business, and save a great deal of time. With accounting software, computerized documents will make it easy to file and send documents to the IRS or other interested individuals. Money will be saved by not having to utilize the services of an accountant or CPA. This will also save time because expenses, payroll, and other financial matters can be completed by the owner at the business, with no need to take paperwork or other materials to an accountant for tax and payroll purposes. Taking advantage of this type of system can provide many great benefits to a large or small business. Accounting is a very important part of running and maintaining a business and the success of a company will often heavily rely on the practices and procedures that are used in the bookkeeping efforts of the company.