Typical products of Accounting Information System
An accounting information system consists of data inputs and outputs. Once data is entered into the system, it is organized into information outputs that a company can use to record and analyze various business activities. Sales, purchases, employees, and inventory are all examples of items that an accounting information system can track and report on.
Although the size of an accounting information system depends on the specific needs of the business. Here are some of the standard outputs from the system that all companies use.
1. Financial reports
A company's set of financial statements includes a profit and loss statement, balance sheet, statement of cash flows, and detailed notes. Internally, business owners and managers use financial statements to get an overall view of the business. Outside users, such as lenders and investors, use financial statements to gauge a company's net worth and creditworthiness.
- The profit and loss statement shows the revenue, expenses, and net profit or loss that is left after expenses have been subtracted from sales.
The cash flow statement shows the company's cash disbursements and receipts for a certain period of time. The statement of cash flows also shows changes in assets, their ability to convert to cash, and their solvency.
- The balance sheet shows the assets and liabilities as well as the overall financial position of the company.
The accounting information system can output any financial statements for different periods, including real-time, daily, weekly, monthly, quarterly or annually.
2. Sales invoice
The accounting information system manages the sales data entered into the system, the system will issue an invoice based on the order and monitor the invoice payment process. Invoices are used to track inventory and revenue activity and must be kept with the business's bookkeeping records for audits, customer inquiries, and management verification.
3. Receipt/Receipt
The accounting information system manages bill payment activities, makes and issues receipts, receipts with information that cannot be missed as the payment date and amount will be entered into the system. Payment information is matched to the invoice that was paid. In case a customer has more than one invoice, this process helps to track and deduct payments accurately. Once the payment information is entered, the accounting information system generates a receipt, the receipt is provided to the customer and is also kept with business records for bookkeeping purposes.
4. Information for management
While management can use any result of an accounting system for internal decisions, an accounting information system can generate other types of reports that are important to management. For example, every time a customer places an order, the inventory or parts used to fulfill the order will be updated in the system. Management can use this information to determine when to order new inventory or materials. Additional examples of management information outputs might include performance reports, payroll reports, and delivery schedules.
