The effect of Accounting Information Systems on Organizational Productivity
Introduction
A structured procedure for collecting data, processing the data into information, and
delivering that information to users is known as an information system. An accounting information
system (AIS) aims to gather, store, process, and report financial and accounting data so that
managers and other interested parties may make informed business choices (Fontinelle, 2021), and
indeed nearly all accurate records and information on the operations of a specific firm and its
resources. An Accounting Information System is a corporation's structure to hold management
financial records. The initial function of an AIS is to gather and store data about an organization's
economic activities efficiently and effectively manner, including extracting transaction data from
source documents, recording transactions in journals, and transferring data from journals to
ledgers. An AIS's second function is to provide information that can be used to make decisions,
such as producing managerial reports and financial accounts. An AIS's third function is to ensure
that controls are in place to ensure accurate data recording and processing.
Since technology drives today's economy, most accounting information systems nowadays
are computer-based. It delivers a specialized service or a complete range of services to expert
consultants or entire national or worldwide companies. However, an accounting information
system (AIS) can be a manual system. A few very tiny enterprises still use pencils for accounting
purposes. The AIS reduces the time for larger firms. The system gives companies a framework to
ensure their monetary profits, marketing, and matching each area. An AIS that does not perform
effectively can pose a more significant threat than no accounting information system for a company
and its customers. To improve an organization's efficiency, technology and accounting information
systems are used. Every year, businesses spend significant sums of money on these products to
enhance their overall performance. This study aims to see how organizations' technological
alignment and information management affect the performance on productivity that uses
accounting information systems.
Discussion
One of the most crucial systems of every organization is the Accounting Information
System. It aims to supply the management with relevant information at different levels. This
information helps them carry out their obligations effectively and efficiently in planning, control
of resources, performance evaluation, and decision-making. Accounting information systems
(AIS) are a tool developed to help manage and monitor issues related to the economic-financial
sphere of business by being incorporated into information and technology systems (IT). However,
the impressive technological advancement has opened up the chance to generate and use
accounting information from a strategic point of view. As this is vital for all businesses, it is even
more so for medium- and small businesses, which require this information to deal with a higher
level of unpredictability in the competitive market (El Louadi, 1998, as cited in Chung, 2018). As
a result, they must upgrade their systems and data processing capability to meet their information
requirements (Van de Ven and Drazin, 1985, as cited in Chung, 2018).
According to McGregor G. (2008), the ability of businesses to adapt to existing technology
will play a significant role in their potential to boost productivity. According to this study,
productivity helps companies establish better decision-making processes, more practical
information and technology use, and more efficient ways to connect organizational strategies with
IT. Furthermore, as IT has grown in importance for businesses, executives have demanded more
accountability, necessitating productivity assessment. In this regard, IT's brief history reveals that
they entered businesses precisely because they promised repetitive procedures and reduced
employee costs. To put it another way, they promised a boost in productivity. Managers nowadays
examine how much benefit they get from their financial, human, time, and effort investments and
the risks they will face in the process.
According to a study, while firms have seen increases in work productivity in a fair amount
of time, these increases are not due to IT investments; in fact, Nobel Laureate Robert M. Solow
stated, "We see the computer era everywhere except in the productivity figures." According to
Griliches, as cited in Zaretsky (1998), computer investments will only be viable if they boost
productivity. Nonetheless, the introduction of the IT productivity paradox has only served to
exacerbate the dilemma, owing to the significant investments made, which are rarely reflected in
organizational productivity. This circumstance concludes that, despite the investments in IT, it
fails primarily due to a lack of user acceptance, a lack of systematic planning, and a lack of
managerial participation.
Positive and significant links have recently been identified and recognized concerning the
influence of IT investments on organizational productivity levels, particularly with the IS and AIS.
This dilemma exists even in firms that have successfully implemented IS; they are usually seeking
methods to improve their business processes and see IS as a tool to boost productivity. Another
study identifies this relationship but frames and justifies it in highly competitive situations, with a
high demand for innovations; in such environments, innovation and technology transfer are
statistically significant for productivity improvements (Apergis et al., 2008, as cited in Quintero et
al., 2015). Some researchers question whether it is possible to maximize IT performance if it is not
done concurrently with organizational restructuring; however, it is undeniable that IT investments
can facilitate complementary innovations in the economy, such as business processes and work
practices, which leads to an increase in productivity through cost reduction and quality
improvement.
Summary and Conclusion
In today's organizations, AIS has become a necessary tool. As a result, businesses resume
investing in these technologies as a means of improving their efficiency. This study aims to see
how the technological infrastructure of companies affects their organizational performance in
terms of productivity through the use of an AIS daily.
One of the critical objectives of managers is productivity; nevertheless, they may be
pleased because such productivity has been reached via the everyday usage of AIS, both to be able
to deliver the information needed by government agencies and to generate data to compete. It is
especially true when it comes to employees' perceptions of improvements in the activities they
perform, information to enable them to make more and better decisions, and, most importantly, to
establish a culture of the importance of appropriate information use, which can serve as a
foundation for discussions about knowledge management. As a result, the IT expenditure is
justified, casting doubt on the productivity paradox for the companies under investigation. In
addition, economic conditions and competitiveness are creating pressures on information costs.
Finally, the information system is designed with IT to help a person do their job. Most
firms, therefore, concentrate on establishing the information system to support decision-making,
communication, knowledge management, and many more. The primary aspect of the information
system required for corporate decision-making is the accounting information system. The
Productivity variable, as can be shown, is highly significant for small and medium-sized
businesses. If appropriately implemented, AIS may be a source of advancement and a driver of
organizational productivity. This can be accomplished by leveraging all of the data generated as a
result of its continual use.
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