What Should Every CFO Know About Financial MIS Design?
A management information system (MIS) is an information system used in an organisation for decision-making and the coordination, control, analysis, and visualisation of information.
People, processes, and technology are all involved in studying management information systems in an organisational context.
The ultimate goal of using a management information system in a corporate setting is to increase the value and profits of the business. This is accomplished by providing managers with timely and relevant information and making more effective decisions in less time.
Benefits of MIS and Reporting
MIS reports are a term that almost everyone has heard or is familiar with. These are essential reports from the Management Information System that provides you with critical information about the operation of your company, allowing you to make an informed decision.
In many ways, MIS reports are critical for any business! It is essentially your road map to success!?
Let’s take a look at some of the advantages:
(A) Management Information System Aids In Data Management
Critical information is organised and stored for easy access whenever it is needed. Thus, the Management Information System aids in the maintenance and management of business data for use in management decision making.?
MIS reports are based on well-analysed data, implying that the data has been sorted and scrutinised by employees. The information is organised, making it easier to generate these reports. So, whenever you need to find something, you can easily access this organised information!
(B) Management Information System Aids in Examine trends
Every company must develop a growth strategy. It is therefore critical to have up-to-date information on current market conditions and trends. MIS employs analytical tools to process internal data, market reports, and future trends in order to accurately forecast the future.?
When an MIS report is generated, it usually shows us trends that have been defined in a parameter. As a result, observing and analysing what needs to be done becomes much easier. This report can be generated based on a variety of parameters and for a variety of aspects of a business.
(C) Management Information System Aids in Strategic Planning
As previously stated, MIS reports are critical in forecasting the future. It also aids in identifying the resources that will be included in the strategic plan to achieve future business objectives. In this case, the accuracy and dependability of the information provided by the MIS Report are critical.
(D) Management Information System Aids In Goal Setting
Setting goals is essential for driving growth and ensuring the future success of any business enterprise. The creation of a business plan is a critical goal-setting exercise. It necessitates a large amount of current data and trend analysis, which Management Information System Reports provides. Because these reports provide an overview of the business’s operations and are based on current data, the management team can easily base their strategy on MIS Reports
(E) Management Information System Assists in Identifying Issues
An MIS report provides critical information about every aspect of a business’s activity. As a result, in the event of a problem, MIS reports assisting in determining the source of the problem as well as in determining a solution to such an issue.?
Because these reports are constructed with various aspects of business and their data in mind, it is also simple to identify the problematic areas in business. These reports typically provide us with indicators about how the business is operating.
(F) Management Information System Enhances Efficiency
MIS Reports can also be used to assess and monitor the performance of a business. As a result, MIS is critical to increasing business efficiency.
(G) Management Information System Aids in Performance Comparison
The MIS database stores and maintains the relevant data and information of the business. This database can be used to compare current performance to the previous year’s achievement in order to measure growth.
MIS reports can be a very useful tool for comparing your company’s performance. The data used to generate these reports can be saved and accessed for future comparison purposes. As a result, you can easily see how your company has grown over time!
Creating these reports is a critical task, and given their importance, the accuracy of these reports must be maintained. As a result, many businesses hire people to create these reports or outsource the work to a specialised firm. The importance of accuracy in these reports cannot be overstated.
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How to Prepare an MIS Report?
MIS Reports are created in accordance with the needs of the business and the decision-makers.
Some businesses prefer that the MIS be brief, highlighting only the KPAs and presented in a graphical or Dashboard format, whereas others prefer that it cover all business functions.
The best way for an entrepreneur to arrive at a format is to consult with his management team about their preferences and critical areas of his business. However, make certain that it only includes information that is relevant to the majority of them.
Let’s take a look at some of the Reports that can be found in the Management Information System Dashboard:
# Budget
A business plan is a quantified version of the entrepreneur’s future vision for his company and an important goal-setting exercise. A budget, on the other hand, is a document that is prepared to estimate the revenues and expenses for an upcoming period based on the Business Plan goals. It is an important management information system tool that includes income and expenditure budgets, production budgets, cash budgets, and so on.
# Sales Report
A sales report in a management information system is a comprehensive sales analysis of the company’s various products sold in various geographical areas. It shows the difference between budgeted and actual sales, along with the reasons for the difference.
# Cash Flow Statements
The cash flow statement in Management Information System shows the number of cash inflows and outflows during the operating period. It also shows the enterprise’s sources and utilisation, as well as it's opening and closing cash and bank balances.
# Funds Flow Statements
Funds Flow statement in Management Information System is prepared to show various sources of funds as well as their application areas at any given time.
# Budgeted & Actual Profit Report
This report clearly shows the company’s budgeted and actual profit over a specified time period. It also specifies the factors that have contributed to any increase or decrease in actual profit.
# Financial Statement Report
The Financial Statement report in MIS is important. Profit and loss statements and balance sheets are important tools for sharing financial information not only with the entrepreneur or shareholders but also with government agencies and other stakeholders such as banks and regulatory agencies.
# Cost Reports
Cost reports in management Information systems cover a variety of information regarding the specific costs incurred by a specific function or department of the business, such as a production cost report, a departmental cost report, and so on.
# Production Report
The production report in MIS outlines the production goals that were met, as well as the differences between budgeted and actual production.
# Machine Utilisation Report
A Machine Utilisation report in a management information system is prepared by a manufacturing company and indicates the extent to which a machine’s productive capacity is used over a specified time period. It describes how a machine was used for various jobs, as well as how long it was idle or under planned maintenance.
# Idle Time Report
Idle time report in the Management information system is prepared in a manufacturing company and indicates the time actually spent by workers on various jobs and the time they were sitting idle due to a lack of material, electricity, or any other resource.
Conclusion
The corporate environment is dynamic, rampant with uncertainties and risks. These uncertainties and risks force businesses to make difficult decisions in order to survive in the market. Because the primary goal of any organisation is to increase its profitability and long-term viability. As a result, no business can afford to overlook the significance of MIS.
Finaccountants?works with clients from all over India. We strive to provide you with expert solutions. Our expert team ensures that you provide all necessary and relevant information in the MIS in order to obtain accurate results. Our MIS will undoubtedly make your job easier and assist you in making the right and timely decisions. What could be better than a well-managed organisation?
If you want to improve management coordination and accuracy, MIS is for you! Connect with us and take the first step toward developing a strong management team.