An accounting information system is typically a computerized accounting program that keeps records for a company. The information is entered into the system and the system tracks and organizes the accounting information. The accounting information system is used also to provide detailed information about the company, including financial statements.
An accounting information system is designed to record all transactions of a business. An accounting clerk enters all business transactions into the program and the transactions automatically are posted to the corresponding accounts. This is important because any time information is needed, it can found on the computer and is organized.
An accounting information system allows for easier payments made on accounts payable. Many systems are designed to pay all bills due with a click of a button. A date is selected and checks are automatically made out for all bills due. Most systems allow a clerk to unselect certain bills if a company is not ready to pay a specific bill.
This type of system also allows for easier billing. Information is recorded on the system and a clerk chooses when to print bills. This is done daily, weekly or monthly, depending on the business. The system generates all bills efficiently and easily for the clerk.
An accounting information system generates all financial reports without the clerk calculating anything. The dates for the reports are entered into the system and the computer generates reports for that specific period. This comes in handy when a report from a different period is needed immediately. The system has the capability of producing reports for any period that the information was recorded for.
Year-end closing is often a tedious process for an accountant. An unadjusted trial balance is created, adjusting entries are made and recorded, an adjusted trial balance is calculated, closing entries are made, and, finally, a post-closing trial balance is generated. This process is complicated and time consuming, but with an accounting information system, the computer does most of the work on its own.