The resulting financial reports can be used internally by management or externally by other interested parties including investors, creditors and tax authorities.
AISs can support the automation of processing a large amounts of data and produce timely and accurate information.
Today, accounting information systems are more commonly sold as prebuilt software packages from large vendors such as Microsoft, Sage Group, SAP and Oracle where it is configured and customized to match the organization's business processes.
Before, with separate applications to manage different business functions, organizations had to develop complex interfaces for the systems to communicate with each other.
Today, Cloud-based accounting information systems are increasingly popular for both SMEs and large organisations for lower costs.
An AIS typically follows a multitier architecture separating the presentation to the user, application processing and data management in distinct layers.
The presentation layer manages how the information is displayed to and viewed by functional users of the system (through mobile devices, web browsers or client application).
As transactions occur, the data is collected from the business events and stored into the system's database where it can be retrieved and processed into information that is useful for making decisions.
A big advantage of computer-based accounting information systems is that they automate and streamline reporting, develop advanced modelling and support data mining.
For instance, at the end of the month, a financial accountant consolidates all the paid vouchers by running a report on the system.
Today, AIS vendors tout their governance, risk management, and compliance features to ensure business processes are robust and protected and the organization's assets (including data) are secured.
Many large and SMEs are now adopting cost effective cloud-based accounting information system in recent years.