There are three major types of accounting information systems used by small business owners. These include manual or paper-based systems, spreadsheet accounting systems, and accounting software. Each of these systems is unique in the level of information that it provides to users. There is no one choice that is right for everyone however makes sure that the one you select is one that will meet the needs of your company. The more complex your reporting requirements become, the more robust your accounting systems should be.
These automated systems save firms time and money. By integrating accounting practices with technology, firms are able to post transactions to various ledgers with a single click. Information about invoicing, returns, and inventory is simultaneously updated as sales people access the database and input transactions. And this process could take hours for a company that processes many orders a day.