A financial information system (FIS) is a business software system used to input and track financial and accounting data. The system generates reports and alerts that assist managers in effectively running the business.
Systems typically have three main modules. The financial accounting module records all accounting and financial transactions and produces financial statements. Funds management identifies funding sources and overall spending consistent with budgets. Controlling tracks revenue and expenses for each project or department.
Major global software providers such as Oracle and SAP develop and sell financial information systems. Increasingly, systems are available as Internet-based applications that need not be installed on company servers.
Systems are not cheap. Costs include the initial software license, system installation and integration, annual maintenance contracts for support and upgrades, and staff training on system features and use.
Systems need to be integrated with other business applications such as Human Resources modules on pay and benefits. Therefore, businesses often hire integration specialists. System deployment and integration is complex and time consuming, and raises overall cost.
A financial information system is not suitable for everyone. Due to its complexity and cost, it is better suited for medium- and large-sized organizations.
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