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What Are Financial Management Information Systems?

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  • Written By: Jim B.
  • Edited By: Shereen Skola
  • Last Modified Date: 02 December 2019
  • Copyright Protected:
    2003-2019
    Conjecture Corporation
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Financial management information systems are those efforts by companies to take all of their financial dealings and analyze them as a whole. This is usually accomplished through the use of technology; specifically, computerized software designed with the needs of the company in mind. These software programs take in all of the raw data pertaining in direct and indirect fashion to their financial operations and arrange them into concise bits of information that are easily digested. This allows managers to make financial decisions with all of the pertinent information having already been absorbed by the systemic process.

Large corporations that operate in huge sums of money daily cannot possibly hope to process all of their necessary financial information without some help. Modern technology allows for that help to come from computer programs that can essentially break down all of the various bits of information pertaining to a company's finances. By employing financial management information systems that are specifically tailored for the needs of their business, managers can assess their company's financial status and see what needs to be done to improve that status in the future.

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In many ways, financial management information systems operate like a mathematical equation with inputs and outputs. The input would be all of the financial information that the program can absorb, such as information about accounting, manufacturing, balance sheets, revenue and expenses, even reports on industry forces and competitors. In addition, basic information about the company's financial goals and strategies can be factored into the equation as well.

From all of this data, financial management information systems can churn out something resembling a coherent overview of the company's finances. This can be useful to managers trying to assess the big picture. It may also be necessary for decisions to be made on certain aspects of the business. A good information system can be tasked with any query relating to specific data and respond with the necessary results.

What all of this means is that, by using these systems, the managers of firms can save time and get right to the heart of whatever decision needs to be made. Once a solid system is in place, they can make decisions knowing that every possible iota of information germane to that decision has been taken into account. Ultimately, this process breeds efficiency in decision-making and, if the system is accurate, can lead to improved financial fortunes for the company in the future.

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