Financial management is one of the most important aspects of business. It encompasses the strategic planning, organizing, directing and controlling of an organization’s financial activities.
Thus, financial management means applying general management principles to an organization’s financial resources. Any key decision relating to investment or dividend payment depends on an enterprise’s financial management strategy.
Indeed, the availability of relevant data and how to process it into a qualitative or quantitative information for a good decision to achieve an organization’s financial strategy cannot be underestimated. Data is usually collected and stored from business activities carried out by a company.
Accounting Information Systems (AIS) constitute one of the essential tools an organization can use in that regard. Thus, an Accounting Information System (AIS) is a computer-based approach to collecting data, storing and processing it into a relevant information to prepare reports, plan and implement decisions to achieve a stakeholder’s interest.
Accounting Information System (AIS) used be a manual-based system until the emergence of software applications. As a result, a business can transform its financial management and operations by obtaining a customized software to meet their unique needs and specifications.
The components of Accounting Information System (AIS) usually integrated with Artificial Information (AI) include the General Ledger, Accounts Payable/Receivable, Financial Reporting, Budgeting and Forecasting, Asset Management, Tax Management and the Audit and Compliance. These components of Accounting Information System (AIS) help different units within a company to work together.
In that regard, the design and the implementation must be effective and streamlined to support all those functions. Indeed, an efficient Accounting Information System (AIS) must track all accounting and business activities with the integration of traditional accounting practices and principles with modern information technology resources.
Furthermore, the ability of a modern Accounting information system (AIS) to run efficiently also depends on its smooth interrelation with an IT Infrastructure (such as computers, peripheral devices and communication network circuits), software, data, the people (accountants, management and staff, auditors, regulators) and internal controls. Aside from that, a business must have in place Standard Operating Procedures (SOPs) to guide its people in the effective use of the systems after its implementation.
It is very important to establish internal controls to prevent threats to accounting information systems and protect sensitive data. A threat to Accounting information system (AIS) can occur during a data processing phase or through an unauthorized access to create illegal programs, deleting files or corrupt a program’s logic through a virus which in the end could damage a company’s operations, business continuity, competitiveness and reputation.
Internal controls include security protocols such as passwords, data encryption or biometric identification. Biometric security protocols involve storing unique human features such as fingerprints, voice and facial recognition.
Implementing Accounting Information System (AIS)
The implementation process of an Accounting Information System (AIS) is very crucial to help harness its full benefits. In respect of that, the design and the implementation process must pass the gold standard test which will make the system robust on completion. The implementation process must first of all have a plan of your company’s specific user needs and scope of the project.
Meanwhile the implementation process must assess a company’s current Accounting Information System (AIS) infrastructure to help select the Artificial Information (AI) technologies and tools for integration. Other steps will include system design and configuration, documentation, data migration, testing and staff training as well as monitoring and evaluation of Artificial Information (AI) performance after the integration.
The system design stage usually caters for functional areas of a business, transactions, processes, security, and database or coding structures of the plan. It also involves the installation of a compatible software application, hence, there is the need to ensure hardware and network to support a new system. It is equally important to ensure seamless data migration from the existing legacy system to the new one.
System design must also have a documentation regime of the procedures to demonstrate that the end goal for the implementation is achievable. The implementation process is incomplete without the necessary testing and training program for staff and other users to learn how to use the new system.
Indeed, testing of the system design and configuration is necessary to ensure hardware and software are fit for purpose and all the processes are well documented. A good Accounting Information System(AIS) project should also include a regular maintenance schedule, time for upgrading components of the hardware system, as well as a plan for the disposal of broken and outdated hardware so that sensitive data is completely and securely destroyed.
It is worthy to note that an investment in Accounting Information System(AIS) is aimed at ensuring easy access or retrieval of data from the computerized system to inform real-time decision-making. It also facilitates time-effectiveness and efficiency by reducing the amount of time involved in recording, classifying, and reporting any financial information while safeguarding the accuracy and relevance of data for reports.
The success or otherwise for implementing an Accounting Information System (AIS) can be influenced by the organizational structure and the culture prevailing in a company. Extensive training regimes can orient staff to accept the intended benefits of adopting and using a new system.
Innovations in Accounting Information Systems (AIS)
Accounting Information Systems (AIS) are witnessing significant changes due to rapid technological advancements. Some of the innovative changes include cloud computing, cloud accounting, real-time accounting or mobile accounting with the integration of Artificial Information (AI).
The integration has further led to significant improvement in data processing and decision-making. FinovatePro® is a clear example of a financial management software worth reiterating. It is a state-of-the-art cloud-based accounting software solution meticulously designed for small and medium-sized businesses. It is accessible round-the-clock from any location via the internet or mobile devices.
FinovatePro® empowers businesses to take full command of their financial affairs thereby enabling them to make informed decisions for an enduring financial success. FinovatePro delivers unmatched convenience and efficiency. In essence, Accounting Information Systems embedded with Artificial Intelligence (AI) help to automate data processing with predictive analytics to improve decision-making.
In the face of these advancements, issues relating to data privacy and ethical considerations or human judgments persist. By carefully addressing these challenges and leveraging the capabilities of Artificial Information (AI), accountants can adapt to the changing landscape, provide value-added services and continue to play a vital role in financial management and reporting.
Conclusion
In closing, an advancement in information technology and increased use of the internet require that accountants and other related users become more knowledgeable and conversant with the design, operation, and control of accounting information systems.
It is, therefore, imperative that accountants embrace and navigate this technological shift to thrive in the evolving digital world. Accountants will need also to embrace technical knowledge by collaborating with IT professionals.
That said, the use of Artificial Information (AI) technologies in effect increases efficiency, accuracy and productivity in financial reporting to stakeholders. It is based on the benefits that one can strongly assert that the integration of Accounting Information System (AIS) with Artificial Intelligence (AI) holds a great potential for transforming business processes.
BERNARD BEMPONG
Bernard is a Chartered Accountant with over 14 years of professional and industry experience in Financial Services Sector and Management Consultancy. He is the Managing Partner of J.S Morlu (Ghana) an international consulting firm providing Accounting, Tax, Auditing, IT Solutions and Business Advisory Services to both private businesses and government.
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