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Chapter 9
Accounting Information Systems
Computerized Accounting
All journals, ledgers and subledgers have been illustrated in a manual accounting system. For a
small business with a small number of transactions, a manual system may be adequate. However, as
the number of transactions increases, so does the amount of information that is kept. In a manual
accounting system, storing, tracking and finding information can become tedious and difficult.
A computerized system is typically set up in a similar manner to the special journals just described.
Sales are entered in one section of the software, while receipts are entered in another. Purchases
and payments are also separated into different sections. The general journal is available for any
transaction that does not fit into any of the special journals.
Although entries can be recorded in different sections, they will update the appropriate subledgers
and the general ledger accounts at the time they are posted. By updating all appropriate ledgers
after every posting, reports can be viewed or printed at any time and be up to date.
Details about customers and suppliers are available through the subledgers. Contact information
and billing information can be stored. Reports on each customer or supplier can be easily generated
to show all transactions and any amounts outstanding.
The computerized system will keep track of the terms of a purchase and indicate to the user when
a payment should be made to take advantage of discounts. If no discounts are available, the system
will indicate when the bill should be paid so it is not late. For sales, the system can indicate when
a customer is overdue for payment so a letter or email can be sent to remind the customer that
payments is required.
