FMIS

MIS for Financial Management Group 2

Financial forecasting and planning

Storing and Organizing Financial information

Generating Financial reportsProcessDeveloping supportive tools for Planning

Objectives of Financial MISPrimary Objective:Providing Working Capital and Long term loansCost of capital at the minimumSecond Objective:To meet the statutory compliance.Declaring the audited financial results.Returns to Government and Tax Aurities.Tools and techniques of MIS in Finance:1) Input Transaction Documents:Payments and receiptsDocumented through journal voucher.2) Applications:Financial accounting systemProduces financial results of the company.3) Accounting:Accounts for all money transactionsSales, purchases, Inventory, expenses, etc.

4) Query:Throw light on debit and credit balance.5) Decision Analysis:Borrowing of short term capital, source of finance, analysis of debter and creditor.6) Control:Financial controls.Tools and techniques of MIS in Finance:7) Reports:Statutory compliance and operations updateTop management heavily relies on the reports.8) Knowledge updates:Monthly trial balance,Stock valuation,Account recivable and payables,Cash positioningTools and techniques of MIS in Finance:MIS in Financial Planning

Elements of MIS Architecture

Elements of MIS ArchitectureFinancial MIS - Architecture

Financial MIS - ArchitectureMIS - Components

Financial MIS - SubsystemsFinancial MIS - SubsystemsSample Financial Reports in MISCash flows from operating activitiesInventory Accounts PayableInterest ExpensesCash flows from investing activitiesMarketable SecuritiesNon-recurring gainCash flows from financing activities Capital LeaseBank loans short and long term1. Cash Flow Report - ContentsSample Financial Reports in MIS

1. Cash Flow Report:Sample Financial Reports in MISSales EntriesRegion wiseDivision wiseProduct wiseRevenue EntriesDrill-down low level figuresCumulative figuresExpenditure entriesMiscellaneous entriesCost of sales entries

2. General Ledger Report- ContentsSample Financial Reports in MIS

2. General Ledger ReportSample Financial Reports in MISCredit and Debit entries pertaining to Accumulated Depreciation entriesInventory figuresDeposit figuresAccounts receivablesEmployee advancesWithheld sales figuresSales Tax figures

3. Trial Balance Report- Contents3. Trial Balance report:

Sample Financial Reports in MISSample Financial Reports in MISAssets - CurrentSavings BalancesInvestment BalancesAssets Long TermEquipment valuesLong term loans and advances Liabilities CurrentMaterials PayablesAccrued Salary BalancesLiabilities Long TermCapital term loansEquity and Reserves

4. Balance Sheet Report- Contents4. Balance Sheet Report:

Sample Financial Reports in MISSample Financial Reports in MISParticularsTransaction codesTransaction descriptionsPre and Post transaction balancesPrinciple disbursementsTransaction typesSweep in transactionsAutomatic payment transactions Authorized transactions

5. Transaction Report - Contents5. Transaction report:

Sample Financial Reports in MISOutputs of MISScheduled ReportsKey Indicator ReportsDemand ReportsException Reports Drill Down Reports

Scheduled ReportTraditional form of providing information to managers It is also called Periodic reports Report will be generated according to pre defined period It may be daily, weekly, monthly or annually

Key Indicator ReportIt is a type of Scheduled reports Provide the summary of the critical activities of the previous day Available at the beginning of the each day usually Associated with critical business functionalities that should has a management great concern

Demand ReportWhenever mangers need, they can ask various reports from the system (On-Demand) They are available when the managers require immediate access to vital information

Exception ReportThey will be generated automatically by the systemThey indicate that the management should take a decision Example : When the amount of orders exceeds the quantities available in stores, it is needed to indicate the manger to take an action immediately

Drill Down ReportInformation is summarized as a hierarchyHighest level has more summarized description of data. Detailed of the information is higher in lower levels.

Types of Management Reporting

Reports for Top Management LevelTop Level Management is concerned with the formulating policies planning and setting goals and objectives. Consist of Board of Directors including Chairman, Managing Directors, General Manager or any other chief executive ExampleReports on budgeted and actual profitReports on sales and productionMaster budgetPeriodical financial reportsPlant utilization reportMachine and labour utilization reportProject evaluation reportReport on stock of raw materials, work in progress and finished goodsSamples

Budgeted vs Actual Profit ReportPlant Utilization Report

Reports on Stocks of Raw material, WIP & FGSales and Production ReportReports for Middle Management LevelConsists of the heads of all departmentsConcerned with the functioning and control of their departments.They may require more detailed information about their departments and at frequent intervals.Examples:Reports on material carrying cost, loss of material in the storage etc.Reports on trends in the pertaining of various items of materialsReports on level of materials stock at the storesReports on surplus and deficiency reportReports on orders received and orders executedReports on cash sales and credit salesReports on stock of finished goodsReports on market share and market potential

Samples

Market share and market potential ReportOvertime working hours Report

Reports for Junior Management LevelResponsible for executing various policies assigned by top managementConstitutes of Foremen, Supervisors and sectional in charges etc.Examples:Reports on labour efficiency varianceReports on ideal time, overtime and machine utilizationReports on materials usage varianceReports on credit collections and outstandingExamples

Labour Productivity ReportOutstanding Credit Report

Financial MIS SoftwaresSAP Financial Information Management Software Optimizing performance and driving financial excellenceGain quick access to valuable financial dataCut costs across the close processImprove the accuracy and integrity of financial statementsSage 300 ERPMid market Sage ERP line of accounting applicationsFormerly known as Sage ERP AccpacVarious modules:Accounts payable/receivableAlerts and alerts serverBank services Module Customer relationship moduleFixed asset managementG/L security General ledgerMicrosoft dynamicsERP and customer relationship management software applicationsDeveloped by IBM and Damgaard Data(Danish)Acquired in 2002 by MicrosoftTraditional Core General LedgerBank managementCRMAccounts receivable/payableProject accountingExtended CoreCost accountingBalanced scorecardsExpense managementPayroll management

Greentree Business Software :Marketed under the brand name CBAMost widely used software in New Zealand and Australia (most successful midrange software)Huge demand in countries like UK and USAVarious functionalities:Financial managementCRMService and asset managementJob Cost management

PerfiosPERsonalFInanceOneStop- IndianWeb based Finance applicationIt synchronizes all the finance for example Bank accounts, Credit cards, Mutual Funds, Equity accounts, Insurance policies, Loans, Fixed deposits, etc.All information in one accountTax planning and preparationFinancial health tracking and analysis Financial Education

Advantages of MIS in financeQuick decision makingEnhanced scheduling and forecasting capacityGreater efficiencyIntegration of functional process and financial resources of businessCompetitive advantageGreater control and securityAccounting benefitsIncreased reliabilityFaster reporting

Disadvantages of MIS in financeDisadvantages :Expensive MaintenancePossibility of becoming ineffectiveContinuous monitoringLack of flexibility to update/ modify itselfDoesnt takes account into factors like morale of employees, attitude of workers, etc.Unemployment

The Indian HotelsCase StudyAbout the companyThe Indian Hotels is recognised as one of Asia's largest and finest hotel company. Incorporated by the founder of the Tata Group, Mr. Jamsetji N. Tata, the company opened its first property, The Taj Mahal Palace Hotel, Bombay in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003. Taj Hotels Resorts and Palaces comprises 93 hotels in 55 locations across India with an additional 16 international hotels in the Maldives, Malaysia, Australia, UK, USA, Bhutan, Sri Lanka, Africa and the Middle East.EBIDTA for FY 13 was Rs 166.79crore, a growth of 30%in EBIDTA

Porters Competitive Forces Model48Value Chain AnalysisDevelopment of new productsImprovement of existing productsCustomer surveysBroadening of customer baseImprovement of structuresMaintenance workPurchasing workOutsourcing of servicesStaff training and professional developmentReception servicesHall serviceRoom serviceAdditional servicesBooking ServicesCommunicationPromotional formulasPublic relationsCustomer DatabaseIT StrategyFront Office Management

Reservation Analysis

Room wise Analysis

Billing Information

ApplicationMobile based MIS for SHGsTo improve the lives of the local community in Dungarpur, Rajasthan, a voluntary group called Peoples Education and Development Organisation (PEDO) encourages local women to form SHGs and to take responsibility of their own savings and credit. KEY STAKEHOLDERS

Ministry of Communication and Information Technology reviewed the proposal sent by PEDO and facilitated the implementation UNDP funded the project National Institute for Smart Governance responsible for overall monitoring and evaluation of the project SHGs ultimate beneficiary

PEDO now, concentrates on following major areas of concern: 1. Women empowerment through micro-credit. 2. Environmental up gradation through natural resource management. 3. Promotion primary education and Child rights 4. Rural decentralization and strengthening Panchayati Raj Institutions 5. Rural housing 6. Promoting self-sustained Institutions 7. Irrigation and Agriculture DevelopmentPedo Structure

Each SHG meets monthly every member has a separate ledger where all financial transactions pertaining to that particular member are recorded. These transactions are related to members savings, loan borrowings and repayments. On average, there are at least 85 90 transactions per group in a meeting.

Technology Used

MITRA project incorporates four kinds of technology: A windows based mobile handset for data entry at village level A web based MIS software that gathers all the data to generate relevant financial and accounting reports Bluetooth technology to print the receipt A handheld printer to generate the receipt at SHG

Information flow in MITRA

FMISFinancial Management Information System in Developing countries

FMIS in Developing countriesFeatures of FMISBudget using FMIS

Core FunctionsCountries using FMISTanzaniaCentral ServerDedicated NetworkW2W3W1Office of the Accountant General (AG)Disadvantages of FMISIndustry Applications(1/2)Softwares Used SAPABASOptimaBannBPCSDatatexMovexImproved decision making and outcomes with integrated analyticsReduced readmissions, medical errors, and average cost per case with better KPI monitoringReal-time patient care anytime, anywhere with mobile healthcare appsIntegrated patient financial processes for faster billing and collection timesIncreased patient satisfaction due to personalized patient interaction and services and real-time collaboration

HealthcareSpeed time to market for desirable new vehicles with our software for the automotive industry. Understand customer demands for product innovation, quality, and price and then meet expectations without compromising bottom line. Discover the advantages of software designed specifically for auto manufacturers, suppliers, and sales and service organizations.Greater visibility throughout product and customer lifecyclesAccelerated product development, manufacturing, and deliveryFaster, more informed decision making and higher profit marginsDifferentiated and personalized customer experiences

HealthcareIndustry Applications(1/2)Meet the digital consumers demand for instant, relevant content anytime, anywhere with our software for the media and entertainment industry. Understand and predict audience requirements, and respond with interactive, satisfying experiences that create value for both consumers and advertisers. Improved processes for acquiring, creating, managing, and monetizing media contentFaster time to market for sought-after content and increased product success rates

Healthcare

OperationsImproved average project margin and reduced margin varianceFewer unexpected project cost over-runsFaster, savvier decision making with access to real-time insightsMaximized labor and equipment productivityAccelerated processing and monetization of project scope changesBetter project cash position and liquidityReduced number of days revenue outstanding (DRO)IFRS

QUESTIONS1) What is FMIS? What are various subsytems in FMISFinancial Management Information Systems accumulate and analyze financial data in order to make good financial management decisions in running the business. FMIS is the acronym for the term Financial Management Information Systems.

The basic objective of the financial information system is to meet the firm's financial obligations as they come due, using the minimal amount of financial resources consistent with an established margin of safety. Outputs generated by the system include accounting reports, operating and capital budgets, working capital reports, cash flow forecast, and various What-If Analysis reports. 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).

Contd .

Generic architecture of an FMIS systemContd..Q2 Explain in brief different reporting systems required for top/middle/operational managementTop Level Management is concerned with the formulating policies planning and setting goals and objectives. ExampleReports on budgeted and actual profitReports on sales and productionMaster budgetPeriodical financial reportsReport on stock of raw materials, work in progress and finished goodsMiddle Level Management Consists of the heads of all departmentsConcerned with the functioning and control of their departments. Examples:Reports on material carrying cost, loss of material in the storage etc.Reports on trends in the pertaining of various items of materialsReports on level of materials stock at the storesReports on surplus and deficiency reportReports on orders received and orders executedContd..Operation Management Level Responsible for executing various policies assigned by top managementConstitutes of Foremen, Supervisors and sectional in charges etc.Examples:Reports on labour efficiency varianceReports on ideal time, overtime and machine utilizationReports on materials usage varianceReports on credit collections and outstanding

What are the technologies used in FMIS? What are the emerging trends