It is important that business organizations well-designed management information systems to improve efficiency and overall flow of work. An accounting information system is specifically essential because it is the basis of the organization’s control system. Every organization needs a well-designed system to strengthen the business. Enhancing efficiency in sales and collections of accounts receivables is a primary role of such a system.
A properly designed system would improve communication between the company and the company’s customers, making sales transactions more accessible and cheaper both to the company and the customers who make payment for goods and services offered by the organization. For example, with a well-laid working system, the customers are in an excellent position to make fund transfers directly to the company’s accounts without any involvement. The system allows the accounts’ officials the ease to verify transactions made by buyers before the company can complete the process of sales. Moreover, such a system would be characterized by information synergy (Turner, & Weickgenannt, 2020). For this reason, the sales officers get to the position where they can read the verification from their end and complete the transaction of sale. A sound accounting system is important in enabling the company to comply with various government regulations on sales and revenue. The system is characterized by automation and would, therefore, make various documents available to ensure compliance of the company with various sales regulations. For example, the system would make it easy to have tax reports
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Apart from that, a sound accounting system provides tools that can accurately track revenue, measure invoice payments with automatic reference to customers’ debtors’ accounts to verify outstanding balances. They can also automatically produce and forward relevant documents such as receipts, credit memos, and promissory notes, among other documents necessary in communicating with debtors. This implies that the system strengthens communication between the company and debtors, thus promoting the process of collecting accounts receivables. It is critical to note that such an accounting system makes it easy to identify potential bad debts, send necessary communications to the debtors before concluding that the debts are true, doubtful. For example, the system can sort the debtors in order of the age of debts and respective amounts to enable the sales department to know which debts to be written off and which ones to have debtors accorded with reminders.
Response (Annsi’s thread)
Relational database management system indeed enables the creation and administration of data through the use of programs such as MySQL, Microsoft SQL, among others. Most business organizations indeed prefer keeping data through a relational database management system simply because of its advantages. Indeed, the system is known for its security. This kind of system enables users with access to several security tables, thus making it have strengthened security (Gubanov, Jermaine, Gao, & Luo, 2016). It is also agreeable that RDBMS is easy to use and manageable. Unfortunately, RDBMS also has disadvantages, one of which is cost. Indeed, this kind of system is expensive to install and to maintain. For this reason, several business organizations, especially small and medium enterprises, are unable to acquire a relational database management system. It is also true that isolated as a result of the several tablets can lead to loss of information. Another limitation of the system is the fact that they mostly limit users to data field lengths.
References
Gubanov, M., Jermaine, C., Gao, Z., & Luo, S. (2016). Hybrid: A large-scale linear-relational database management system. In MIT Annual DB Conference .
Turner, L., & Weickgenannt, A. (2020). Accounting information systems: controls and processes . Wiley.
