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Accounting System
The accounting system allows companies to track all types of financial transactions, including purchases (expenses), sales (invoices and income), liabilities (payments, payables), etc. and can generate comprehensive statistical reports to provide management or a set of interested parties Clear data to help the decision-making process.
Today, the systems used by companies are usually automated and computer-based, using specialized software and/or cloud-based services. However, historically, the accounting system is a series of complicated manual calculations and balances.
What accounting system
Expenses: The amount of cash outflows from companies that exchange goods or services from other people or companies is an expense. In old accounting software or manual systems such as Excel, you need to manually enter, balance, and classify expenses. The automatic accounting system allows quick entry, classification, and automatic balancing of expenses.
Invoices: Creating professional invoices is an important part of developing a positive brand image and building customer confidence. Today, some accounting systems, such as Debitoor, allow instant invoice creation, the ability to customize and automatically track paid invoices and revenue.
Funds: All business liabilities, whether it is accounts payable, bank business, or mortgage, etc. The accounting system traces these debts back to the value payable and automatically updates the balance immediately after payment and account settlement.
Accounting system in history
The earliest known accounting records were found in the Middle East, dating back more than 7,000 years!
It is important for early rulers, companies, and individuals to be able to track income and expenditures because it is necessary to determine whether a particular activity is profitable, tax citizens, or levies customs declaration fees.
At the end of the fourteenth century, the Italian monk Luca Pacioli was certified as the “Father of Accounting” to describe the structure of the double bookkeeping system used by the Venetian merchants during the Italian Renaissance, which has become the immediate predecessor of modern accounting practice. He may be called the golden accounting rule:
Modern accounting system
Starting in 1880, the first accounting machine was invented by a man named Herman Hollerith. Known as a labeling machine, it uses punched cards to add numbers to the card, which can then be used to determine the total. Hollerith also founded a company that later merged to become a component of IBM.
In the twentieth century, the development of computer technology, especially the introduction of computers, meant that “ordinary people” might obtain a certain system. In other words, this is an accounting system. From the first DOS-based accounting system such as PcPlus to Debitoor using SaaS (or cloud computing), today’s Internet-based accounting systems are all models of accounting system allocation.
Management accounting
The purpose of management accounting is to provide managers with information about planning, controlling, and managing business operations. It provides management with the information needed for important business decisions. One management accounting system is cost accounting. The system records the actual cost of delivering the product or service, the cost of standard and planned costs, and highlights the differences in investigation and follow-up. Another management accounting system is lean accounting. Lean accounting interview process and related results to determine how to create more value, reduce costs, and eliminate waste of resources.
Inventory accounting
The inventory accounting system is used to plan and track inventory locations and inventory-related activities. A common inventory system is barcode tracking. Each inventory item is marked with a barcode. When inventory items enter the warehouse or move out of the warehouse, the barcode will be scanned to increase or decrease the inventory. Barcode systems can also be used to track items in warehouses. Another type of inventory accounting system is RFID, a new technology that will be widely used. This type of system is more advanced than bar codes and has a signaling device on every inventory item. Readers can detect the signal and track inventory. Unlike barcodes, the system can track the actual movement of inventory in real-time as it moves around the warehouse.
Industry-specific accounting
The accounting system also includes industry-specific applications. For example, retail accounting systems have different requirements from other industries. Use a computerized point of the sale cash register to capture sales at the point of sale. Retail accounting systems must track and properly report commodity price reductions. Legal accounting software also has other specific requirements, including tracking the time spent by lawyers, dollar time calculated on an hourly rate, and the usage rate of each lawyer. Utilization is the percentage of time spent by a person, not administrative expenses.
Non-profit accounting
Non-profit accounting has its own specific reporting requirements. For example, funds must be tracked so that donations designated for specific purposes are specifically spent. The software should also be able to generate donation statements, reporting members provided by individual donors.
Data output
Various output information systems show the capabilities of their data operators. The accounting information system case reports the aging of accounts receivable based on customer information, fixed asset depreciation schedule, and financial report audit balance. Customer lists, tax calculations, but the library may not be in the system, because these items are not directly related to the company’s financial reports and bookkeeping.
Relationship between departments
Accounting information systems strive to cross different levels. In the system, the sales department can upload the sales budget. The inventory management team uses this information to inventory and purchase materials. The accounts payable department of the new invoice. The accounting information system can also share information about new orders so that manufacturing, shipping, and customer service departments know about sales.
Internal Control
Component of the accounting information system related to internal control. Policies and procedures can be placed in the system to ensure that sensitive customer, supplier, and business information is maintained within the company Online Assignment Writing Service.
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