Application of MIS and analytics in Finance.

1. MIS
IN
FINANCE
By:-
Manish kumar
Gupta

2. Content
 What is Management Information System?
 What is Finance?
 What is Financial Analytics?
 Components of Financial Analytics
 Popular Financial Analysis Software
 Uses of MIS in Finance
 Financial Management Information System
 Financial Data in MIS
 Source of Financial Data in MIS
 Advantages of FMIS

3. What is MIS?
A planned system for the
Collection Processing Storage
Dissemination Evaluate
of data in the form of information

4. What is Finance?
 Art and Science of managing money
 Finance is concerned with the process,
institutions, markets and instruments involved
in the transfer of money among and between
individuals, business and governments
 It can be subcategorized into 3 types:
 Personal Finance
 Corporate Finance
 Public Finance

5. What is Financial Analytics?
 DEFINITION: Financial analytics is the creation of
ad hoc analysis to answer specific business
questions and forecast possible future financial
scenarios
 Financial analytics is a discipline that helps to take
multiple and granular views of a company’s financial
data and use it to gain insight and take action
 Useful in the context of profitability - a very important
component of business success and performance
management
 Achieving better business performance requires
leveraging advanced analytics that integrate data
from across the organization and provide insight to
the people who can impact business performance

6. Components of Financial
Analytics
 Analyze financial trends in key growth segments
 Financial benchmarking against industry
averages
 Identify areas for internal improvement
 Support corporate finance and treasury
departments
 Identify sources of funding Financial Trend
Identification
 Identify opportunities in growth segments
 Analyze current trends and financial
implications
 Cost structure and working capital improvement

7. Popular Financial Analysis
Software
 IBM Cognos finance
 Oracle financial analytics
 SAP ERP Financial Analytics
 SAS Business Analytics
 NetSuite

8. Uses of MIS in Finance
 General Ledger
 Automatically updates all the transactions in the
General Ledger
 Simultaneous updating of accounts such as sales,
inventory and accounts receivable, reduces errors
 Also provides an accurate and permanent record of
all historical transactions

9. Uses of MIS in Finance
 Cash Management
 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
 Can help pin point areas that eat up cash flow such
as inventory costs, high raw material costs or
unreliable sales

10. Uses of MIS in Finance
 Budget Planning
 Financial budget planning uses proforma or
projected financial statements that serve 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

11. Uses of MIS in Finance
 Financial Reporting
 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

12. Uses of MIS in Finance
 Financial Modelling
 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

13. Financial Management Information
System
 An information system that tracks financial
events and summarizes financial information.
FMIS
Standard
Data
Classification
Internal
Controls
Common
Processes
over data entry,
transaction processing &
reporting
For recording
financial
events
For similar transactions
Eliminates duplication

14. Financial Data in MIS
What does FMIS do?
 Provide timely, accurate, and consistent data for
management and budget decision-making.
 Integrate budget and budget execution data,
allowing greater financial control and reducing
opportunities for discretion in the use of funds.
 Provide information for budget planning, analysis
and enterprise-wide reporting.
 Facilitate financial statement preparation.
 Provide a complete audit trail to facilitate audits

15. Source of Financial Data in MIS
 Transactional Data
Transaction processing data is the base for any output or
analysis. This data includes the transactions of revenues
and expenses incurred from each functional area. This data
is captured through TPS.
 Forecasting Data
For structured planning, an organization needs forecasting
data from each functional area, which can be used to
compare the actual transaction with the anticipated as per
the forecast. This is also made available through transaction
processing system and management reporting system.

16. Source of Financial Data in MIS
 Financial Intelligence Data
An organization needs to gather data from the financial
community, like banks, Government, stock market, etc. This
data helps to monitor the pulse of the nation’s economy and
helps in analyzing the trends that may affect the
organization’s economy.
 Strategic Plans
The strategic plan is an important indicator and
measurement scale for any kind of financial transactions as
it charts the future of the organization, e.g., if the
organization’s goal is to increase profits by 30 per cent, it
must be reflected in the financial plan.

17. Advantages of FMIS
 Integrated Financial Information
 Flexibility of reporting and additional control
over expenditure
 Up-to-date financial information
 Transparency of information
 Enhance efficiency
 Less administration required within the
business

18. Thank You