What Is an Accounting Information System?

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Accountants work a variety of data each day, from financial data to inventory quantities to labor hours. In order to use the data, the accounting staff needs a location to warehouse the data. The location where a company stores its accounting data is called an accounting information system. Most companies incorporate computer technology to house these records and allow users to access these records.

Accounting Data

Accounting data consists of financial and non-financial data. Financial data provides the details for information reported on accounting reports, financial statements and government requests. In addition to the reports, accountants maintain backup documentation which can be used to verify the numbers reported. Non-financial data consists of sales quantities, production volumes, labor hours and asset descriptions. Non-financial data supports financial numbers reported. Sales quantities provide details for total sales. Production volume provides details for inventory quantities. Labor hour data provides details for payroll. Asset descriptions provide details for property and equipment reported.

Information System

An information system provides the warehouse for compiling all of the data needed in a company. Information systems need a strong organization in order to allow users access to the information they need without providing access to confidential information beyond their needs. Many companies purchase software programs to manage their information system needs. Other companies employ computer programmers to build an information system that meets their specific needs.

Accounting Information System

An accounting information system is an information system built to meet the specific needs of the accounting department. The accounting department manages a variety of confidential pieces of information. Hourly labor rates and annual salaries, along with private personnel information, requires limited access within the department. Customer selling prices must remain confidential, especially when different customers pay different rates for similar products. Knowledge of manufacturing costs must remain internal lest competitors try to under-price the company. With each of these examples, only select employees need access to the information. An accounting information system must provide the mechanism for select employees to retrieve certain information they must work with but not information outside their scope of responsibility.

Uses

In addition to maintaining confidentiality, accounting information systems provide users with reports created for their specific needs. Accounting information systems also allow users to download information into spreadsheets. In a spreadsheet, the user can select specific pieces of information to meet their own needs.

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