The term accounting is defined as the systematic recording, analyzing, evaluating, interpreting, and communicating financial data. The Financial Statements are the final output of the accounting work. However, it is not that easy to prepare reports especially if they are done manually. Of all the departments in an organization, the work of the Accounting Department is considered as one of the most tedious. They gather all information from almost all departments within the organization that requires accounting for transactions. With the advanced technology, accounting information systems were developed to make the work easier.
Accounting Information System (AIS) is a sub-species of Transaction Processing System (TPS). It is the system of records, that a business keeps to maintain its accounting system. TPS is tied to other systems such the inventory system that tracks stock supplies and triggers reordering as stocks get low. This is an example of how the inventory system relates to the accounting information systems. Other examples are Budgeting; General Ledger; Billing: Cost Accounting, Accounts Receivable / Payable; Funds Management Systems and Payroll.
The AIS is aimed to provide efficient delivery of information that are needed to perform necessary accounting work. It is designed to assist in the delivery of accurate and informative data to users that can be understood by those who are not familiar with the accounting and financial reporting. Investors, creditors and managers use accounting information in their decision making. The steps in the accounting cycle depends upon the system applied by users and as developed by programmers. An example is an accounting cycle that allow the direct journal posting to the various ledgers instead of recording it first from the journal.