MANAGEMENT INFORMATION SYSTEM FOR FINANACIAL MANAGEMENT

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MIS
MIS is an integrated man-machine system which collects , maintains, correlates and selectively displays information in the proper time frame consistently, to meet the specific needs of various level of management, in order that decisions could be made and action taken for fulfilling the objectives of an organization. .
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Financial information system

Information is the lifeblood of financial markets . financial information systems deliver huge amounts of details to financial professionals around the world about counter markets, price endorsers, research services and news-providers.

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Functions
Recording all financial transactions in general ledger accounts, Producing fiscal reports to meet up administration and statutory requirements Controlling overall spending through budgetary controls embedded in the system Producing business fiscal statements.

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Financial Management (FM)

Financial Accounting (FI)

Controlling (CO)

Components of FIS
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Financial Accounting (FI)

Financial Accounting is used to record the entire financial transactions in general ledger accounts for the assets that is A/R, liabilities that is A/P, revenues and expenses. In addition to, FI produces the university s financial statements.

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Funds Management (FM)

Funds Management is used to recognize the funding source and control the overall expenses. Funds Management will prevent the posting of a transaction for which there are insufficient budget dollars.

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Controlling (CO)
Controlling is used to track the revenues and expenses based on particular reporting necessities, i.e. by department or specific activity or project. Each revenue or expense transaction practiced within Financial Information System will incorporate a code furnished from each of these components and will answer the following questions : What taxation or expenditure occurred (FI) What is the source of funding How much funding is available. for spending (FM) Which department/project incurred the activity (CO) Page 8

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General Ledger
The main use of a management information System (MIS) in finance is that it automatically updates all the transactions in the General Ledger. The General Ledger is the core component of all financial information systems. Financial transactions are simultaneously posted on the various accounts that comprise the organization's "Chart of Accounts". Simultaneous updating of accounts such as sales, inventory and accounts receivable, reduces errors. It also provides an accurate and permanent record of all historical transactions.
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Cash Management
Cash flow management is an important use of MIS in Finance. Cash Management refers to the control, monitoring and forecasting of cash for financing needs. Use of MIS in Finance helps companies track the flow of cash through accounts receivable and accounts payable accurately. Accurate records also help in monitoring cost of goods sold. This can help pin point areas that eat up cash flow such as inventory costs, high raw material costs or unreliable sales.
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Budget Planning
Financial budget planning uses proforma or projected financial statements that serve as as formal documents of management's expectations regarding sales, expenses and other financial transactions. Thus financial budgets are tools used both for planning as well as control. MIS in finance helps organizations evaluate "what if" scenarios. By modifying the financial ratios, management can foresee the effects of various scenarios on the financial statements. MIS thus serves as a decision making tool, helping in choosing appropriate financial goals. Page 12

Financial Reporting
The use of MIS systems in Finance enables companies to generate multiple financial reports accurately and consistently. Generation of financial statements both for internal reports as well as for shareholder information takes less effort because of the automatic updating of the General Ledger. Compliance with Government regulations as well as auditing requirements is also easier because the records are accurate and provide a permanent historical map of transactions that can be verified.
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Financial Modeling
A financial model is a system that incorporates mathematics, logic and data in the form of a large database. The model is used to manipulate the financial variables that affect earnings thus enabling planners to view the implications of their planning decisions. MIS in Finance enables organizations to store a large amount of data. This helps managers develop accurate models of the external environment and thus incorporate realistic "what if" scenarios into their long-range planning goals.
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How financial information system used?

The evaluation of financial data may be performed through ratio analysis, trend evaluation, and financial planning modeling. Financial planning and forecasting are facilitated if used in conjunction with a Decision Support System (DSS).

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 A Decision Support System (DSS) is a way to model data and make quality decisions based oMaking the right decision in business is usually based on data quality and ones ability to sift through and analyze the data to find trends that solutions and strategies can be created from/for. Decision Support Systems are usually computer applications with a human component. They can sift through large amounts of data and pick between the many choices.n it. Decision Support Systems are used to collect data, analyze and shape the data that is collected, and make sound decisions or construct strategies from analysis. Whether computers, databases, or people are involved usually does not matter. It is important to note that although computers and artificial intelligence are at work, it is ultimately up to humans to execute these strategies or formulate the data into a usable hypothesis.
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The figure alse illustrates how the DSS works. The DSS users get their data from the data warehouse, databases, and other data sources. When a user has a problem, it is evaluated by the processes. A DSS system is the constructed. Data are entered from the source on the left side and the models on the right side in figure below. Knowledge can be also tapped from the corporate knowledge base. As more problems are solved, more knowledge is accumulateThe DSS methodology just described was designed initially to support individual decision makers. However, most organizational decisions are made by groups, such as an executive committee. d in the organizational knowledge base.

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Different between expert system and decision support system? DSS aid in problem solving by allowing for manipulation of data & models whereas ES allow experts to 'teach' computers about their field so that the system may support more of the decision... How Decision support systems can support different part of an organisation? k[] Why do you need computerized decision support system? A decision support system (DSS) is a computer-based information system that supports business or organizational decision-making activities. DSSs serve the management, operations, and planning levels...

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