To Show An Understanding Of Computerised Accounting Information Systems Accounting Essay


The aim of the survey presented in this class work was to demo an apprehension of computerised accounting information systems used in little and average sized endeavors in the UK every bit good as its benefits and information demands.

Over the past few decennaries at that place has been a large displacement from manual to automatize accounting information systems. In our work-life we may ne’er hold to do a pencil entry into a gross revenues diary once more, but it is critical to understand how dual entry systems and the flow of informations through a manual system work ( Gelinas/Dull 1997 ) .

It seems non long ago that big endeavors could merely afford to utilize really expensive accounting information systems, normally such as ERP or other advanced accounting systems and benefitted from utilizing them. In about all little to medium sized endeavors, all comptrollers should non merely be knowing in accounting but they should besides utilize computerised systems for histories production.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

One of the most indispensable alterations in accounting is the recent debut of computerised accounting systems in companies which widely spread the usage and execution of assorted AIS systems, ( for illustration Sage, SAP, etc. , or Concluding Histories by MoneySoft – this company will be used subsequently in my work for screen shootings. ) It allows companies dramatically to cut down labour input in assorted concern procedures. However, there are advantages and disadvantages, of class, in utilizing them.

First of all, antecedently the cost and return on investing of some ERP and accounting programmes was really high, and unaffordable for little or average sized endeavors, particularly for those 1s, get downing their concern activity and trading. Besides, they were besides hard plenty in larning how to utilize them. It has since changed.

Nowadays, there is a great figure of computerised accounting systems, which are more low-cost to use- due to the decrease in its monetary values and its broad usage, its simpleness and easy interface, every bit good as other figure a figure of other utile possibilities.

Using computerised accounting systems, has its ain certain advantages in comparing to manual or non-computerised systems. Its flexibleness in easy accommodations and the puting up of different parametric quantities, scenarios “ as if ” , tests, bring forthing existent clip studies, fiscal analysis, VAT, planning and prediction of the future activity of endeavors and bring forthing different information for internal and external clients quickly.

Therefore the usage of computing machines surely do assist to execute accounting activities more efficaciously and expeditiously.

What is SME under Companies Act

Harmonizing to the Companies Act, the definition of SME is a set of companies measure uping as little or average sized endeavors ( SMEs ) qualify for certain exclusions and freedoms from the usual statutory duties under the Companies Act.

The size, turnover, balance sheet entire and figure of employees are used to cipher whether the company qualifies as an SME.

Small companies are those that have:

an one-year turnover of ?5.6 million or less entire fixed and current assets on its balance sheet of ?2.8 million or less and 50 employees or less.

Medium sized endeavors are those that have: an one-year turnover of ?22.8 million or less entire fixed and current assets on its balance sheet ?11.4 million or less and 250 employees or less.

These are the statutory standard since 30 January 2004. Prior to that day of the month the standard for the first two points in each list above was half its present value. When measuring keeping companies, the balance sheet, turnover and figure of employees of its subordinates are taken into history when finding the relevant statistics. Particular regulations apply to companies measure uping for freedoms, and an audit must fix.

Public companies, companies that are subordinates of public companies, Besides companies in certain regulated sectors are non capable of measure uping as SMEs.

Small companies may present brief balance sheet and notes to Companies House and a particular hearer ‘s study ; and medium sized endeavors must present an brief net income and loss history, balance sheet, particular hearer ‘s study, a manager ‘s study and notes to the histories. The particular hearer ‘s study merely states that the company qualifies for the freedom and that the histories have been prepared in conformity with the Companies Act.

Particular regulations besides apply to SMEs within a group. Companies measure uping as Very Small Companies may measure up for an freedom to register an audit with Companies House.

Information Needs of Small and Medium Size Businesss

It can be within an administration which may include of assorted information systems such as accounting information system, knowledge direction system, determination support system, executive support system, etc.

Computerised Accounting Information Systems

The intent of an information system is to authorise its users. There is a broad difference in a simple database which shops informations and return it to its users upon petition. A database can be created in a manner that manages and retrieves information in a sorted mode. This information can assist do determination at assorted degrees within an administration. Information system recognize that there are different degrees of workers in an organisation who have their specific responsibilities and therefore provides them information is different ways ( Heinrich, 2002 ) . Its intent is to do certain that the users of the system are rapidly able to entree, comprehend, and respond to the information provided to them. Wiseman ( 1985 ) references that the information system improves concern functionality by automatizing some of the cardinal information processs. He farther references that the information system increases the effectivity of the direction by fulfilling their information demands.

Information demands of concerns vary at different organizational degrees. Assorted concern maps at strategic, tactical and operational degree have different types of subsystems of information system to function their information demands. Similarly, computerised information systems can function concern demands at assorted degrees.

Computerised Accounting Information Systems for Day-Today Operations

With the coming of computerised accounting information systems, companies can now garner, procedure, shop, and reassign informations by utilizing computing machines. In historical information systems, the information was gathered, and processed manually. However, computing machines have enabled online informations aggregation and processing presents ( Grabski and Marsh, 1994 ) . Accounting information systems peculiarly help administration in automatizing their operational information undertakings. This mechanization serves the information needs at the operational degree of administrations.

In manual accounting information systems, informations is processed really easy and can be subjected to mistakes. Computerised accounting systems help organisations to garner, procedure, and recover information in a much quicker manner with much greater truth. Computerised accounting information systems can automatize concern maps in the undermentioned ways ;

Data input map:

In manual accounting information systems, informations is normally captured from a beginning papers which is straight processed in diaries or some times stored in leger histories.

Datas processing:

After capturing the information into computing machines, it is processed. The most of import of the informations processing activities is the information care. Keeping informations requires updating stored information when new minutess take topographic point. For illustration, new information is entered into computing machines when gross revenues dealing takes topographic point. Unlike manual systems, computerised accounting information systems are able to instantly update thesales and histories receivable informations when new minutess take topographic point.

The mechanization of these undertakings reduces the opportunities of human mistakes. For illustration, computerised systems, update records by utilizing primary keys that unambiguously identify each entity and record. For illustration, merely the related client file will be updated when a gross revenues dealing takes topographic point as every client is likely to hold a alone history figure which can be used as their primary keys and hence, it would non be possible to update a incorrect client ‘s record.

Information demands of SME. External and Internal Users

Information end product:

After come ining the information into the computerised accounting information system and treating it, the information is retrieved to function different information demands of an administration. The stored and processed information can be presented in assorted formats such as paperss, studies, or as a response to a question. The paperss and studies are the record of minutess such as bills. These records can be printed out on documents to maintain physical records or stored in digital formats such as electronic images in computing machine databases.

Internal and external users:

Business studies are created for both internal and external users. Computerised accounting information systems can fix concern studies for external users such as creditors and fiscal statements. Additionally, computerised accounting information systems can be developed to show fiscal information automatically in assorted formats such as spreadsheets. The promotions in electronic communicating systems allows administrations to reassign fiscal information and studies to assorted users in digital formats which eliminates paper work and reduces costs. Reports can besides function the demands of directors supervising operational activities.

Sometimes, directors are required to seek for specific information that can non be generated through automated studies and paperss. When any unexpected job or state of affairs arises, directors can utilize computerised accounting information systems to recover specific information really rapidly by come ining questions. In manual accounting information systems, minutess are normally recorded in diaries subsequently to be posted to ledger histories. Fiscal statements are convenient to be prepared at the terminal of each month by utilizing stoping balances of leger histories. However, computerised accounting information systems can bring forth fiscal studies handily at any clip by come ining related bids as all the information is stored in relational databases and tabular arraies.

Information demands of SME. Additional INFO.

The Impact of Regulations on SMEs:

What do SMEs Necessitate?

Government advice for SMEs needs to be improved:

Information end product:

Example of an Accounting bundle MoneySoft

Information end product:

Computerised Accounting Information Systems for Strategic Decision Making

The strategic intent of accounting direction is to supply fiscal and economic information that relates the day-to-day operation of concern with its strategic aims. Accounting information enables directors to join forces with the full drawn-out endeavor of comprising of its clients, providers, contractors, traders in their strategic aims ( Ansari et al. 1997 ) . This provides a long-run position of concern ‘s schemes and aims. In this manner, accounting information helps administrations to accomplish their strategic ends by describing the consequences of fiscal and nonfinancial steps ( Ansari et al. 1997 ) . A computerised accounting information system can ease the fiscal coverage in a really efficient mode in ways that manual processing can non. The followers are some of the undertakings that computerised accounting information systems can execute automatically to function the information needs at a strategic degree.


The promotions in information and communicating engineerings have enable administrations to pull off their accounting information systems in computerised mode. Computers bring much more efficiency and effectivity in pull offing fiscal and economical informations or concerns. Business portion and pass on accounting information with internal and external users through either intranet, extranet or the Internet. Computerised accounting information systems help automatize day-to-day transactional activities and convey great efficiency and truth in it. By analyzing and treating stored information in assorted ways, computerised accounting information systems can besides function the strategic determination devising in an administration.