A financial information system (FIS) is charged with monitoring finances within an organization or business. It takes complex data and processes it into specialized reports, saving time and effort in dealing with business accounting. While financial information systems have many benefits, it should be noted that having an FIS in place can be costly and usually requires training for those people operating the system.
The center of a financial information system will be found in accounting. This area looks at the overall financial picture of a project, business or individual, incorporating both accounts payable and accounts receivable. The larger the project, the more beneficial a financial information system becomes. While an advanced system might not be necessary for an individual financial account, an organization’s finances can be tracked through a financial information system.
Another benefit to having a financial information system in place is seen with funding. The FIS examines where funds are coming in and where funds are going out. Unlike accounting, however, FIS can make use of rigid budget controls. This enables a user to quickly identify whether or not a financial situation is developing. If funding has been designated for “Maintenance” for $200,000 and several servers go down and require immediate repair in the amount of $215,000, the FIS program will indicate that funding has gone over budget and will require changes to be made to the budget.
Reporting is another benefit to having an FIS in place. By allowing users to examine reports on any aspect of the financial data, it assists in keeping track of past expenses, as well as projecting future expenses. In addition, it helps identify different departments and divisions that consistently go over budget, as well as which departments operate within their budget, and even which departments actually come in under budget.
Specialized financial information systems are available, ranging from those designed for stock brokers and traders to medical institutions. Financial information systems used in stocks and bonds are designed to provide near-instant financial market data, projecting trends, keeping track of stock sales, and generally gathering and disseminating stock market data as quickly as possible. A medical FIS would contain patient information as it relates to payment costs for insurance purposes, as well as an extensive database of insurance claims, insurance payouts and anything else related to a medical office’s finances.