Accounting Information Systems
Accounting Information Systems are a comprehensive system for collecting, storing and processing data relating to accounts and finance and presenting them in an orderly and presentable manner which is to be used in decision making. Such systems are computer-based software systems with multiple tiers, tracking financial and accounting activities with technological resources and the ability to remain connected for continuous periods and transmit information globally in seconds. Internal use of such information is performed by the company’s own top management while the external check is performed by investors, creditors, tax departments, external auditors, and finance ministries.
Reporting in Accounting
Actual and concurrent reporting in accounting (Real-time accounting and reporting) offers various benefits when compared to typical ledger based reporting. Traditionally organizations have always made reports on quarterly and annual basis but due to the rapid change in current business and economic trends, such reports tend to become obsolete quickly. Competition among enterprises continuously demands more up to date information in order to enable management to adapt quickly to such opportunities and provide solutions. Real-time accounting has been supported by business process management, business intelligence, enterprise architecture and enterprise application integration and these days cloud computing and mobile devices have given accounting information systems a much-needed edge in further integration of enterprise application integration. Prior to the year 2000, most Australian SME’s were content with manual systems but after the beginning of that the year many SME’s began implementing software systems, assisted by Government Vouchers worth $100 Australian Dollars and the introduction of the General Sales Tax. Through the implementation of such systems, it has been easy to keep the record of finances on a quarterly basis albeit closures of such businesses. In turn, it helped efficient financial and tax reporting (Australian Accounting Standards Board-Australian Government, 2016).
Each business has different requirements: payroll calculations and disbursement, tracking stock, handling foreign currency payables and receivables, tracking financial records, keeping purchase details of vendors and customers, and other task management needs; considered whenever acquiring accounting software. As per Australian business requirements, each software package must have Standard Business Reporting forms needed to report to the Australian Taxation Office (A.T.O), Business Activity Statements for example. They also need bookkeeping systems to meet tax compliances (GST), so as to prepare accurate reports and classifications are set up by businesses themselves determining financial state by separating profit and loss calculations in order to see how the company is performing, preparing chart of accounts defining various accounts used in business (Classification of assets, liabilities, expenses, sales and revenue), listing them in order, allocating serial numbers, allocation of sub-accounts under these accounts and deciding if further sub-accounts are needed or not. More than 262,000 businesses and 10,000 corporate partners are using Xero, who could potentially enter Asia in the next few months while 15% of Corporations in New Zealand and Australia use MYOB.