Financial Information System

Presented By
Souvik,vikash,Raunaq vikash Pandey Ritesh,Kamal,Dhurjoti, Amit

Introduction
Financial MIS Provides financial information to all financial managers within an organization. It integrates financial & operational information from multiple sources. Financial MIS eases analysis by providing fast financial data. It enables financial analysis from different aspects; time, product, customer. With Financial MIS, one can analyze historical and current data. Also one can monitor use of funds. Few examples or functions of Financial MIS are Costing, P&L reporting, Auditing, Funds management, etc.

Todays Plan

Financial Information System

An

Overview

Financial Intelligence System

Internet

Financial Web Sites

Workshop

Financial Decision Support System

Spreadsheet

DSS Tools Financial Functions

Workshop

Financial Information System

A subsystem of computer based information system that provides information to persons and groups both inside and outside the firm concerning the firms financial matters. Information is provided in form of periodic reports, special reports, results of mathematical simulations, electronic communications, and the advice of expert systems.

Inputs to the Financial Information System

Strategic plan or corporate policies
Transaction processing system (TPS)
Contains major financial objectives and often projects financial needs.

Important financial information collected from almost every TPS - payroll, inventory control, order processing, accounts payable, accounts receivable, general ledger.
External sources Annual reports and financial statements of competitors and general news items.

System Concept
External Internal

System Boundary
Organization as a System Consists of functional Subsystems

Each subsystem can be viewed as another system; and consists of its own subsystems

AC

HR

FN
B A

MFG MK

Interact and inter-linkage among the subsystems to achieve org. goal

Achieve Direct

Each subsystem has its dept. goal

Classification of Information Systems

EIS

Executive Information System

Decision Support System

DSS

MIS

Management Information System

TPS

Transaction Processing System

AIS

FNIS

MKIS

HRIS

MFIS

Managerial Levels Support Provided

Functional Areas

FNIS Challenges

Other departments and stockholders are the main customers of the FN services FNIS must be integrated with other functional information systems, and must be linked across the organizational hierarchy to enable the Horizontal integration free flow of information

Vertical integration

A Model of Financial Information System

Internal Records System Internal Audit System Financial Intelligence System Financial Decision Support System

Data base

Forecasting Funds Management Financial Control

etc.

Adapted from McLeod

1. Internal Records System

A subsystem of any functional information system that gathers data describing the firms activities, transforms the data into information, and make the information available to users Accounting Information System (AIS) Provides a record of everything of monetary importance that happens in the firm

2. Internal Audit System

Annual stockholder reports requires an external auditor to verify the accuracy of accounting records Larger firms have their own staff of internal auditors who perform the same analyses as external auditors but have a broader range of responsibilities With internal audit system, the firms can independently evaluate and influence their operations from a financial standpoint

3. Financial Intelligence System

Objective: To identify the best sources of additional capital and the best investments of surplus funds. Major task: To gather data and information from stockholders, financial community, and government Sources: Journals, Newspaper,On-line database, Interne etc.

Databases of internal data

Databases of external data

Financial DSS

Business transactions Transaction processing systems

Databases of valid transactions for each TPS

Financial MIS

Financial applications databases

Business transactions Operational databases

Financial statements Uses and management of funds Financial statistics for control

Financial ES

Internet or Extranet
Business transactions

Customers, Suppliers

4. Financial Decision Support System

A decision support system should:

Assist

managers in making decisions to solve semi-structured problems. Support the managers judgment rather than try to replace it. Improve the managers decision-making effectiveness rather than its efficiency.

4. Financial Decision Support System

4.1 Forecasting Subsystem
Basic facts about forecasting All forecasts are projections of the past. All forecasts consists of semi-structured decisions. No forecasting technique is perfect. Tool

Forecasting Models

4. Financial Decision Support System

4.2 Funds Management Subsystem
Objectives To ensure that the revenue inflow is greater than the expense outflow. To ensure that this condition remains as stable as possible throughout the year. Tool

Cash Flow Analysis

4. Financial Decision Support System

4.3 Financial Control Subsystem
Tools

Budgeting Financial Ratios Analysis

Components of DSS
Financial Accounting Sales/MKT Production DSS Database Model Base Statistical Forecasting Operational Planning

DSS Software System

Manage DSS Database Manage Model Base Manage User Interface

User Interface

Electronic Spreadsheets

Tool for analysis, planning and modeling. Built-in statistical, mathematical and financial functions. Formulas can be embedded using numbers in the spreadsheet. The implication of changing numbers can immediately be observed and analyzed.

Integrated Financial Management Information Solutions

Integrated Financial Management Information Solutions (IFMIS) which enable organizations to control all their financial data and processes including financial reporting and convert Information into Knowledge. This helps the organizations to: Accomplish Data Consistency - Achieve the validity, accuracy, usability and integrity of data across the enterprise. Improve Financial Transparency - Gain transparent visibility into financial data from multiple databases. Curtail Process Cycle Times - Deliver more timely outcomes to internal and external stakeholders. Trim Down Transaction Costs - Spend less time on processing resulting in reduced costs. Based on specific needs of the organization's employees and its management, Nova Terra can customize the IFMIS solution to mitigate the exact challenges and meet requirements.

Questions?