The accounting information system

An Accounting Information System (AIS) gives management the accounting information it needs to take decisions. It is made of sub-systems, and all of them can run through CAS. Most sub-systems are named after what they handle:

• Cash and bank: records cash receipts and payments, physical or electronic.
• Sales and accounts receivable: records sales, keeps the sales ledger and manages what customers owe, including overdue accounts and the ageing schedule of debtors (how long each debt has been unpaid).
• Purchase and accounts payable: records purchase orders and payments to suppliers, and tracks supplier performance.
• Inventory: records items purchased and issued, and reports the stock position and its valuation.
• Payroll: salaries and wages: basic pay, allowances, deductions such as provident fund and taxes, and overtime.
• Fixed assets: purchases, additions, deletions, depreciation and book value of fixed assets.

• Expense accounting: manufacturing, administrative, financial and selling expenses.
• Tax accounting: the various taxes (in the book's list, VAT, excise, customs and income tax), mainly in large organisations.
• Final accounts: the Profit and Loss Account, Balance Sheet and cash flow statement.
• Costing: records the cost of materials, labour and other expenses to find the cost of goods produced.
• Budget: prepares the budget and compares budget with actual performance.
• Management Information System (MIS): reports that help managers plan, organise, staff, control and decide.

Many sub-systems, but they all feed one accounting picture of the business.