Financial Information System And Its Features

Business software designed specifically for the entry, collection, tracking, and analysis of financial and accounting data is known as a financial information system. It gathers and examines financial information for optimal financial planning, forecasting choices, and outcomes. The output generated aids in making wise financial management decisions, assisting the managers in successfully managing the company. FIS is employed in conjunction with decision-supporting systems and aids in the achievement of the organization's financial goals by ensuring that only minimal resources are spent in relation to a predetermined limit of safety.

An FIS can be seen of as a financial planner for internet commerce that can simultaneously produce enormous amounts of data from global financial databases on the market and finances. FIS is an organization that offers financial data and analysis, general ledger, payroll, etc. through a mix of computer hardware and application software. In a networked context, it combines a computer system and a user to support decision-makers. The term "FIS" refers to an information system that keeps track of financial events and compiles data to enable sufficient management reporting, political decisions, job duties, and the creation of auditable financial statements. You can do an analysis of the general ledger, accounts receivable, and accounts payable with the aid of FIS.

Investors, creditors, and internal management of the firm can better comprehend how well a business is functioning and where there is room for development thanks to the links between the financial statements. FIS is in charge of providing reliable information at the appropriate time and place. The budget and financial accounts should be prepared with the help of adequate management reporting. The fact that FIS requires less administrative staff while yet being dependable is one of its main benefits.

The following are the steps of a methodical FIS:

• Gathering information about business happenings.
• Analysis of commercial events
• Making a note in the company's books.
• The process of creating the trial balance.
• Financial statement preparation
• Information dissemination to users.

Features of FIS

• Quick Decisions:
  • The decision-making process is sped up by the FMIS application's quick delivery of accurate, trustworthy, and verifiable information. It offers improved financial reporting and decision-making processes for assessing the benefits and drawbacks of our operational and tactical business strategies. This lessens the uncertainty that can prevent us from carrying out crucial business decisions.
• Planning:
  • FMIS implementation improves your forecasting and scheduling abilities. This makes it possible for you to allocate your financial resources wisely, establish reasonable performance goals, and keep the scope of your plans within the bounds of your ability to pay for them. The ability to plan realistically helps to increase the likelihood of achieving desired outcomes within the allotted time. With the aid of FIS, the businesses have access to all the technology and tools they require, including support for numerous languages, national laws and regulations, multiple currencies and conversions, and multi-national transactions. This helps to improve cross-departmental and cross-business unit coordination and the execution of all financial tasks across all international locations.
• Efficiency:
  • By utilizing FMIS solutions, a business or organization can improve the efficiency of its financial operations and reporting processes. These systems define the guidelines and constraints you must follow to waive the misuse of financial resources, as well as the mitigating actions you take to safeguard the company from dangers that are both anticipated and unanticipated. The control measures also give you the historical performance evidence you need to regulate the business's present and future operations. These historical data are also used by auditors to assess the development of the company.
• Integration:
  • FMIS gives you a framework for integrating the operational procedures and financial assets in your company. By removing redundant duties and activities from the organization's chain of command, this speeds up the processing of transactions and the dissemination of financial information. Additionally, systems integration gives you more leverage when it comes to centralizing shared services to cut down on the overhead costs of maintaining various operating units for the same services.
• Competition:
  • Any type of business gains a competitive advantage through the use of FMIS applications. In the meantime, increasing customer satisfaction and productivity depend greatly on the strategic value of information technology. It gives the company the ability to adapt to changes in its target markets and outperform its rivals.
• Cash flow monitoring and management:
  • FIS is responsible for monitoring how money is spent across numerous divisions and locations as well as tracking revenue by department and business group. FIS is responsible for budget allocation as well as additional cash flow management duties and activities for the entire company.
• Advanced analysis and reporting:
  • FIS produces regular, extremely precise budget allocation, profit and loss statements, and balance sheets.

Reference:

keyes, J. Financial Services Information Systems (Best Practices), Auerbach Publications; 2 Sub edition