Friday, November 7, 2014

What is accounting information system (AIS)?

It is a system of storage, collection as well as processing of accounting & financial data which is utilized by the decision makers. It is usually a computer based technique for monitoring accounting action in combination with IT resources. The resultant statistical information could be utilized externally by other parties who are interested like investors, tax authorities & creditors or internally by the management.
accounting information system
Modern Accounting Information System - Software architecture

A modern accounting information system usually follows a multi-tier architecture splitting the demonstration to the user, data management and application processing in variable layers. The demonstration layer controls how the info is showcased to and seen by active users of the organization (thru web browsers, client application or mobile devices). The whole system is backed with the help of an integrated database which preserves all the info which could include the transactional info created from the core business procedures (inventory, purchasing, accounting) or fixed, master data which is referenced when the data is processed (customer account records, configuration settings and employee ).
When transaction happens, the info is gathered from the business happenings & preserved in the system database where it could be saved & processed into data which is beneficial for decision making. The app layer regains the raw info which is held in the data-base layer, then handles it based upon the organized business logic. Finally it is passed on the presentation layer in order to display it for the users. For instance, consider an accounts payable section when handling an invoice. With AIS, the accounts payable employee loads the invoice, given by the vendor, inside the system. This data is then kept into the catalog.

When items from the seller are received, one receipt will be created & then entered inside the accounting information system. Prior to the accounts payable sections pays the seller, the app processing tier of the system conducts a 3 way matching in which it is able to automatically match the sums in the invoice against the sums in the receipt & the primary buying order. After the match is completed, a mail will be sent to the accounts payable executive for sanction.

From here one voucher will be produced & the sell will finally receive the amount.

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