Posted on 2020-10-13
In today’s business, companies have been investing heavily in computerized accounting information systems (AIS) to respond to the complexities and time-consuming procedures in the processing business transactions. An Accounting Information System is a structure that a business uses to collect, store, manage, process, retrieve, and report its financial data so it can be used by accountants, consultants, business analysts, managers, chief financial officers (CFOs), auditors, regulators, and tax agencies.
Though this technology comes with certain costs, why is it that most companies are greatly interested in AIS? What are the benefits that AIS provides to business organizations?
These are the following significant benefits from Accounting Information Systems;
An AIS eliminates the manual processing of data. The preparation of data to generate meaningful reports is done by the system in just one or two clicks. This helps in maintaining electronic journal books to store and retrieve business data without the need for physical documents. Today, AIS are also intelligently designed to perform complex computations, that would otherwise be difficult to perform manually.
The common mistakes in manual accounting such as posting of a transaction twice in the journal and calculation errors are addressed. Therefore, reports generated in the system is more reliable than in manual accounting.
While the inherent risk of manual accounting makes financial information susceptible to physical loss or theft, accounting systems provide a secure and protected storage of financial data. Unauthorized access to information is, thus, significantly eliminated.
Users can also access readily available reports in the system dashboard anytime. In a cloud-based accounting system, users can also access financial data remotely even when on a business trip or a vacation.
There is no delay in generating reports for management use as long as all transactions have been entered into the system. Hence, real-time reports are possible unlike in manual accounting.
The adoption of an AIS helps to streamline the company’s processes thus reducing the staff time in executing individual tasks, especially during the reporting season. The number of hours that financial professionals, such as accountants, bookkeepers, and even SME business owners spend will be significantly reduced since most of the processes in preparing reports are handled by the system.
The movement towards accounting information systems has been a significant part of every business nowadays. Today, a company that efficiently utilizes the capabilities of AIS has the edge of coping up and taking advantage of the ever-changing business environment. However, in the market, there is a lot of accounting systems available. Subscribing to a system without considering the key factors in selecting the right system for the company would be a waste of money. Here are the things that the company needs to know in choosing an accounting system.
An AIS system should be sufficient to cater to the business requirements of a company. While requirements vary across companies of different industries, an accounting system must be able to adapt to the general transaction and report requirements.
The user interface and navigation of the system should be simple and easy to grasp. Though training is normally provided to users, an effective AIS must be designed to facilitate quick understanding from users of different demographics.
In choosing the right accounting system for your company, you need to consider also whether your system provider will have future upgrades of the system or other products or services that you might need in the future when your business expands. This is to ensure that the system provider can keep up with your company’s growth.
A system that supports multilingual, multi-currency, and multi-standard features is also best for companies that are planning to expand globally or are already dealing internationally. The company that has branches around the globe can use the multilingual feature, switching from one language to another for reporting purposes to the head office can easily be executed. In addition, those company that deals in different currencies can maintain the same localized journal data under different accounting standards including requirements set by J-SOX, IFRS or US GAAP.
While keeping pace with technological advents and the on-going pandemic, a cloud-ready accounting system will also prove beneficial in shifting from office-based to home-based working environments without hampering the business. You can access and monitor your financial data even you are on a business trip or vacation.
Integrable with Other System
An accounting system that can be integrated seamlessly with other systems would be perfect for growing companies. Without considering this factor ahead of time would be harmful to your business in the future. It will disrupt your business and just waste your money since you cannot keep up with the growth of your company and might purchase another system to replace the existing one for you to stay on track.
Investments in accounting systems might a bit costly at first but in the long run, the benefits outweigh its costs. As a growing company, taking into consideration these key factors will somehow define the success of an organization.
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