Accounting Information System is a system of data, typically computer-based, which combines accounting and ideas with the benefits of information and is used to identify and record transactions for the purpose of preparing financial statements and accounting records provide its users. Some accounting information systems are still manual are ie accounting done with pen, paper and manual entry in the account books.

How Such systems use?

This system can be customized to meet business needs. For example, information technology professionals who are responsible for business processes and information technology professionals responsible for the accounting information system can work together to develop and implement such a system so that it automatically receives information from other sources already in use at the company. Also, the system can be set up to feature certain functions that are critical to business operations and eliminate minor to trading. Information can be automatically fed, or manually given information companies accounting at any rate, and however often required.

What are the advantages of using Accounting Information System?

Companies use accounting information to make accounting of their activities easier, faster and more accurate, where accounts are identified and financial statements are prepared within the system, which allows secure employees’ time and avoid mistakes. Since many accounting information are error-reduction system and collect information about transactions electronically and automatically, data entry and computing errors are rare. Also, as mentioned above, where such systems are often automatically populated with business data, many accounting procedures less cumbersome and time consuming when such a system.

Of course, the implementation of such systems requires investment and time to be spent on the implementation, however, future benefits will exceed the costs. Also consider whether the business needs accounting information and what kind of system requires a detailed analysis of the company and the accounting method has to be done to determine the exact requirements.

There are four basic accounting, and four basic principles of accounting and the four major constraints accounting, making a generally accepted accounting principles, or GAAP, the US GAAP are the accounting rules where companies record and report financial results and loss for the accounting period. These rules are set by the Financial Accounting Standards Board, usually in conjunction with other authorities. Auditors are not necessarily required to follow the rules, but the rules should be followed as closely as possible as they set standards that should be met to ensure appropriate accounting functionality, understandability and comparability of accounting for different companies. Below is a list of four major accounting and a brief description of each one.

1. Cost Principle

Companies need to take and report assets based on actual costs incurred to buy them rather then free-market value of the assets themselves. The idea behind this principle is that this method of recording and reporting is reliable and reduces the chance for factors such as biased market disturbing accounts. However, this method can be viewed as irrelevant as it relates to the real value of assets.

2. accrual Principle

Companies need to take and report income at the time it is earned and realized the business, but not when the money for the income received by the company . This method is known as accrual accounting. The purpose of this rule is to really show what work has been completed and what not to do in the future.

3. The Closed Principle

This rule allows for real-time analysis of costs and revenues. With this law will show how well the company has done financially and how effective it was. Anything like accrual philosophy, spending in this case can only be recorded and reported when revenue is that such charges are related was earned.

4. The Disclosure Principle

accounting firm shall be published so that the judgment of financial business can be easily done. However, disclosure of accounting and financial information should not cause the company to collect unreasonable fees or have false beliefs.

well-designed chart of accounts for the business services limited liability company, or LLC, allowing for easy reporting and income tax preparation. The chart of accounts is a list of all accounts to be used for the company during the year. It is planned to provide a central place to collect financial information. Invoices are usually identified by a number and a short description, such as the 1010 Cash – .. Bank of America 2010 Accounts and 5020 Insurance costs

Verify that the reports you need

A proper chart of accounts for the business service LLC should provide information to report internally and with external parties. You know first what you need to tax and then set up a chart of accounts for this need. Then check out other government reports, such as sales tax or equipment reports and be sure that the chart of accounts can help you in this process. If management or investors need special financial report, be sure that the accounts of the organization in the table can be compiled to create the report. You may need to separate sales by type or to provide detailed information, such as the sale of parts, or selling on the type you have to create separate accounts to accumulate data in this fashion.

assets, liabilities and equity accounts

Setting up the balance sheet accounts in table accounts, such as assets, liabilities and retained earnings. Identify areas for assets, such as from 1000 to 1999. Liabilities could run from 2000 to 2999 and retained earnings would run in the 3000 to 3999 range. As you create accounts, use these goals to keep accounts directly. Within the property, you should have at least one cash account, which could be 1001 Cash – Bank Alliance. Do not set up a liability account with a stage for the assets, or you will end up with a mess. If you are not sure what accounts to create, looking for a balance sheet template online to get ideas.You can also review your tax return for accounts balance.

Revenue and expense accounts

Create income statement accounts in the table accounts. These are revenues and expenses related to the service business. You decide on the account range for your income, such as 4000 to 4999 and set up these accounts within this range. For example, a service revenue account would be 4001 Consulting revenue. Expenditure had a range of 5000 to 7999 and are created to track the cost basis. For example, if you pay for rent, office supplies and insurance, these transactions entered into three different accounts, such as the 5010 lease costs, office costs 5003 and 5010 Insurance costs. Do not use the same account for more than one account. If you want to know what accounts belong to the income statement, take a look at your own business tax return or the Internal Revenue Service Form C submitted by 1040.

Note that commas are not used by the account.

Creating a chart of accounts can be a challenge, but to do it in systematic way will help you get the results you need. You may try your figure accounts by running reports and making sure information is put in the right places. You may also be accounting professional photos of your accounts before you start using it.

Accounting vs. Book-keeping book-keeping concerns itself with recording (right and a group of books) that transaction resulting in the transfer of money or money’s worth is. But accounting is a comprehensive context. It includes sorting, summarizing, presenting and even analyze accounting information.

Accounting vs. accounting

Body of Knowledge (consisting of principles, comes out, resolutions, conventions, concepts and rules) that apply science recording classifying and analyzing the financial accounting data. But implementation and art science accounting is named as accountancy.To meet the ever increasing demands of accounting with different stakeholders (eg owners, managers, creditors, tax authorities, etc.) the various disciplines have come into existence. Financial AccountingThe financial goal is to make sure (profit or loss) of business operations result in a specific period and specify the financial position (balance sheet) as at the date of the end of the season.

Cost Accounting

objective of cost accounting is to find out the cost of products manufactured or services entities. It also helps companies to control costs by identifying avoidable losses and wastes.Management AccountingThe object of management accounting is to provide relevant information at the appropriate time management to enable it to decide and influence control.In this website primer, we are concerned only with financial accounting. The part of financial accounting as noted above can be reached only by taking finances in a systematic manner the principles. The recorded information to be sorted, analyzed and presented in a way that results and financial position can be confirmed.

Uses Accounting

Accounting plays an important and useful role by developing information, answers to many questions faced by users of accounting information.

(1) How good or bad is the financial position?

(2) Have the activities of profit or loss?

(3) How well the different departments of the company have been in the past?

(4) Any activities or products have been profitable?

(5) Out of the existing products should be discontinued and the production of goods will increase.

(6) Whether to buy things from the market or to produce the same?

(7) Whether the cost of production is reasonable or excessive?

(8) What has been the impact of current policies on the company’s profitability?

(9) What are the likely results of the new monetary policy decisions on the future earning capacity of the company?

(10) In the light of past performance of the business how it should plan for the future to ensure the desired results?

The above mentioned are some examples of the types of questions faced by users of accounting information. This can be adequately answered with the help of relevant and necessary information from accounting

In addition, accounting is also useful in the following items: -.

(1) Increased amount of business results in a large number of business and businessmen do not remember everything. Accounting prevent the need remember various transactions.

(2) Accounting records, prepared on the basis of coordinated action, allows companies to compare results between periods with other periods.

(3) The taxation authorities (both income tax and sales tax) are more likely to believe the facts contained in the set of accounting books if kept under generally accepted accounting principles.

(4) Cocooning files backed up by proper and certified vouchers are good evidence in court.

(5) If a company is selling the operational economic grouping the values ​​of different assets as shown by the balance sheet helps in negotiating the right price for the company.

Restrictions on financial

Advantages accounting discussed in this section do not suggest that accounting is free from restrictions.

Following are limitations

Financial licensed accounting treatment alternative accounting based on the idea and it says “generally accepted principles” but there are more than one principle to treat each object. This allows other treatments in the framework of generally accepted principles. For example, the final stock in trade can be assessed by any of the following methods: FIFO (First-in-First-out), LIFO (Last-in-First-out), average price, Standard price, etc., but the results are not comparable.

Financial accounting does not provide timely information

There is no limitation when high powered software like HITECH Financial accenting used to keep online and interactive accounts where the balance sheet is made available almost immediately. However, manual accounting does have this drawback.

Financial accounting is designed to provide information in the form of statements (balance sheet item) for a period, usually one year. So what is the best of historical interest only “post-mortem” analysis of the past can be carried out. The companies need timely information at frequent intervals to enable management to plan and take corrective action. For example, if a company has plans for the current year sales should be $ 12,00,000 the required information on whether sales in the first months of the year amounted to $ 10,00,000 or less or more?

Traditionally, financial accounting is to provide information on shorter intervals less than a year. With the advent of computerized accounting software now as HITECH financial publishes monthly income statement and balance sheet to overcome this limitation. Financial accounting is influenced by personal judgments’Convention objectivity “is respected in the accounts but to take certain events assessment must do that requires personal judgment. It is very difficult to expect accuracy in future plans and objectivity suffers. For example, in order to determine the amount of depreciation to pay each year for the use of fixed assets if required food and income published accounts are not public but ‘approach.

Financial accounting ignores important non-monetary information

Financial accounting does not consider the transactions of non-monetary in nature. For example, the extent of competition faced by the company, technological innovation possessed by the company, loyalty and efficiency of employees; changes in the value of money, etc. are important issues on which management company is very interested but accounting is not tailored to take account of such matters. Thus all users of financial information is, of course, deprived of vital information which is of a material nature. In modern good accounting software with MIS and CRM can be useful to overcome this limitation part.

Financial Accounting does not provide a detailed analysis

financial information in real variables of financial transactions during the year. Of course it makes researching the overall results of operations The information is required about costs, revenues and profits of each product and financial accounting does not provide such detailed information Product wise. For example, if a company has earned total profit of say $ 5,00,000 for the financial year and it sells three products namely gasoline. diesel oil and mobile and wants to know the profits earned by each product of financial accounting is not likely to help him, but he uses a computerized accounting system capable of handling such complex queries. Many reports in computer accounting software like HITECH financial due with graphs and custom reports that the company must overcome this limitation.

Financial Accounting did not disclose the present value of a company

The financial position of the company as of the specified date is shown by a statement called ‘balance’. In the balance sheet as assets are shown under “Continuing Entity Concept. Thus, it is believed that the company has a relatively long life and will continue to be indefinitely, including the value of assets are ‘going concern values.” The “realized value” of each property, if sold today can not be known by studying balance sheets.

Accounting tasks to non-financial person can be a mammoth task. Wading through bills, bank statements, including obligations can be quite a task especially for small business owners who have lots of other things to do. Even companies that have in-house business team still need to control the operations team to ensure that they meet the goals at minimal cost.

What is Outsourcing?
Before 1980, a lot of business functions were made in the building of many organizations. Businesses will hire temporary staff to conduct the operations staff could not undertake. This provision clearly increases operational savings through recruitment, training, salaries, office space and other benefits.

Outsourcing has now taken the place of temporary staff, including the roles in many organizations. Defined as the contracting out of a business function to an independent agent or company, outsourcing is now a popular choice for companies that want to streamline their processes.

Many companies now outsource much of the work of their business such as accounting, IT, payroll and even recruitment tasks to outside parties. Individual agents tend to work at the site while others outsource their work to organizations that operate in their own premises. This is common among accounting and recruitment companies

Benefits of Outsourcing
Outsourcing accounting functions to an outside organization has many advantages, such as: ..

Cost reduction The most prominent benefit of outsourcing accounting service accounting firm, a decrease staff related costs – hiring, salary, benefits, office space and other costs synonymous with the staff. Several companies that outsource their business functions reported at least a 30% reduction in transaction costs without a reduction in productivity

Quality Work :. outsource companies thrive on reputation and build their business they must offer good service. Companies that outsource their accounting services benefit from a competitive market where the company is obliged to provide exceptional service to keep their customers

Focus on core areas :. Outsourcing allows companies to focus on core functions that can increase productivity by at least 32% according to a recent survey

Access to innovation :. To maintain a competitive edge, accounting firms strive to be at the forefront by investing in advanced accounting systems and technologies for its customers. Rather than investing heavily in new accounting and training, organizations now want to outsource this service to benefit from this new technology development

Pool knowledge :. Companies tend to benefit from a pool of experts and sustainable source of professional accountants. Reputable accounting firms employ excellent and qualified staff to ensure that they deliver on their service and keep loyal customers. Companies that outsource their accounting services benefit from such knowledge without the added cost of hiring top level staff

Faster turnaround :. audit firms operate based on the objectives and timing. They know in and out of every tax and other legal requirements, so they aim to file records of time by providing fast turnaround service to its customers.

Accounting is an important element in any organization, the outcome of the accounting project could have a significant impact on the productivity and profitability of the business. It is critical that companies maintain the right balance between the major business functions and other secondary tasks.

Outsourcing is one of the most simple option companies can choose when the need for good accounting services surplus. Accounting firms must work in accordance with the regulatory authorities, they need to maintain a high standard of service for validation purposes for the benefit of the client.

accounting is generally considered to have two different threads, management and financial accounting. Management accounting, which seeks to meet the needs of management and financial accounting, which seeks to meet the accounting needs of all other users. The difference between the two accounts reflect the different user groups that they face. In summary, the main differences in the following way:

• The reports produced. Interim accounts tend to be for public use. That is, they contain financial information that is useful for a wide variety of users and decisions rather than being specifically designed for the needs of a particular group or set of decisions. Management accounting reports, on the other hand, are often for specific purposes. They are either designed by a separate decision in mind or a specific manager.
• Level of detail. Interim provide users with a comprehensive overview of the performance and position in the period. Therefore, information is collected and detail is often lost. Management accounting reports, however, often provide management with considerable detail to help those with special operations decision.
• Regulations. Interim, for many companies, are subject to accounting rules that try to ensure that they are manufactured with standard materials in standard format. Law and accounting rule setters make these rules. Since management accounting reports are for internal use only, there are no rules from external sources regarding the form and content of reports. They can be designed to meet the needs of individual managers.
• Reporting interval. For most companies, the interim accounts produced annually, although many large companies produce half-yearly reports and some produce quarterly ones. Management accounting reports are produced as often as required by management. In many companies, managers are provided with specific reports on monthly, weekly or even daily, which allows them to monitor your progress often. In addition, a special-purpose reports will be ready when required (for example, to evaluate a proposal to buy a piece of machinery).
• periods. Interim results reflect the performance and position the company for the last season. In fact, they are backward looking. Management accounting reports, on the other hand, often providing information on future performance and past performance. It is all too simplistic, however, to suggest that the financial statements incorporate accounting never expectations about the future. Sometimes, companies will release projected information to other users in order to raise capital or to fight off unwanted takeover.
• Range and quality of information. Interim accounting focus information that can be calculated in monetary terms. Management accounting also produces such reports, but is also likely to produce reports containing information about non-financial nature, such as measures of physical quantities of inventories (stocks) and output. Financial accounting puts more emphasis on the use of objective and verifiable evidence when reporting. Management accounting reports use information is less objective and verifiable, but they provide managers with the information they need.

We see from this that the accounts is less constrained than financial accounting. It may draw on various sources and use information have varying degrees of reliability. The only real test to be applied in assessing the value of information for managers is whether it improves the quality of decision.

The difference between these two areas, reflecting to some extent, differences in access to financial information. Administrators have much more control over the form and content of the information they receive. Other users have to rely on what the managers are willing to give or what financial regulation reporting state should provide. Although the scale of financial statements accounting has increased over time, the fear of loss of competitive advantage and user ignorance about the reliability of the forecast data led companies to pass provide other users with detailed and comprehensive information that is available to management.

There are three major functional areas of accounting, the need to consider modern accounting company. Three are financial, cost and management accounting

first area, ie financial accounting, is primarily useful for verifying the results of operations on a regular basis. for example, one year. This will help to determine the future course of action for the long term. In favorable terms, financial accounting treats money as a factor of production.

cost and management accounting are tools to enable managers to make decisions on a daily basis. Cost and management accounting are not useful for their own sake. These two functions assist managers in conducting business with other major factors involved in the operations. Key elements could be demand, supply, competition, availability of raw materials, transport, etc.

Other areas, ie cost accounting, seeks to ascertain the value of direct costs and indirect costs involved in production. From this value, management can make informed decisions to improve production performance. In economic terms, cost accounting is a measure of economic performance. This information gives managers a clear indication of the performance of production resources.

Costa also helps the sales manager of pricing. But cost is a measure of economic performance, it can not be considered totally accurate basis for setting prices. This is because the sales price is an economic decision. It would not be amiss to mention here that the price basically depends on market factors. Prices depend more on demand, supply and competition and lower costs. For example, strong demand combined with a lack of competition would mean that companies could charge higher prices for their products, well above cost.

The third area, namely management accounting is closely interrelated with the cost accounting. Although it has evolved from cost accounting, management accounting has a broader role in management decisions. It measures the economic performance of business as a whole, vis-a-vis the economic environment in which it operates. This functionality accounting seeks to combine financial and cost information in a broader aspect.

Finally, management accounting is spent to assist and advise management in making important business decisions. It makes management aware of the economic consequences and the consequences of their decisions. In economic terms, it involves a close study of money as an economic resource, but at the same time treating it as a measure of economic performance. This allows management to measure it as an economic factor of production, such as return of capital.

It is thus seen that accounting has a special role in three different areas that are equally important. With the advent of computerized accounting, it has become very easy for managers to monitor the accounting information on the tips of her fingers. Financial accounting program to report and various costs and MIS statements to produce almost instantly to press the button. Now, only the laborious part of the financial statements is data entry. Financial managers must ensure that meaningful data is input into the system to produce meaningful information. Just sorting will be done and write errors avoided at all costs, to ensure to provide detailed financial information to management.