Financial Information Systems: Models, Scope and Examples
For this discussion, we will review the financial information system which in this case includes: understanding, form, nature, purpose and function, so that you can better understand and understand see the full review below this.
Definition of Financial Information System
Financial information system is an information system that provides information to people or groups both inside and outside the company companies that contain financial matters and also provide or contain information about the flow of money for users throughout the world company.
In other words, the financial information system is part of the management information system that is used to solve such as financial problems in the company "financial information systems related to information systems" management".
Also Read: Understanding the Complete Management Information System
Functions of Financial Information System
As for the directions to show the functions of the financial Information System with the understanding described previously, then the form of the System Administrative financial information is contained in forms, books and accounting records and reports served.
The functions are:
- To determine the results of the implementation of the company's operations, including:
- There is a separator of information on the amount of goods and money from company records.
- Generate reports for leaders.
- To be able to follow the course of the company's assets and debts. This function includes the maintenance of various books and accounts such as cash, owned accounts and others.
- To facilitate the planning of company activities, follow-up on the implementation and improvement of plans.
We have seen that the finance function is concerned with the flow of money within the company. Initially money had to be raised to support manufacturing, marketing, and other activities. Then, the funding must be controlled to ensure that it is used effectively. All managers in the company have financial responsibilities. They are given a budget for operating costs to a minimum and are expected to keep expenses beyond that budget limit. Information that describes both budgeted and actual cash flows enables managers to carry out their financial responsibilities. This information is provided by the financial information system.
Financial information systems have three main tasks:
- Identify future cash needs.
- help raise funds.
- control their use.
Form of Financial Information System Sistem
The information provided in the financial information system is presented in various forms such as:
- Special report form.
- Periodic report form.
- Results of mathematical simulations.
- Suggestions from expert systems.
- And electronic communication.
So that the existence of a financial information system can facilitate and meet the needs of managers or various elements within the company for information that explains financial status company.
Also Read: Difference between financial accounting and management accounting
Nature of Financial Information System
The characteristics of the information contained in the financial information system must contain the following components:
- Relevance and materiality.
- Formal and substance.
- Level of confidence.
- Free from bias.
- Comparable.
- Consistency.
- Understandable.
Purpose of Financial Information System
Below are three objectives of a financial information system which can be explained as follows:
Fulfilling the Fast Principle
The financial information system that is prepared must meet the fast principle, which means that financial accounting standards must be able to provide the required data on time and can meet the needs “on time and meet” needs".
Have Safe Principles
The financial information system that is prepared must have a safe principle, meaning that the financial information system must help protect property company, to be able to maintain the security of company property, the financial accounting information system must be prepared with consideration internal controls.
Have Safe Principles
The financial information system that is prepared must have a low-cost principle, meaning that the costs of implementing a financial information system must be emphasized so that it is relatively inexpensive.
Financial Information System Model
The following is a model of a financial information system, as follows:
1. Financial Input Subsystem :
- Accounting Information System, providing input data for financial applications
- Internal Audit Subsystem, assists AIS in providing internal data and information with specialized research conducted by renowned auditors.
- The Financial Intelligence Subsystem, collects information from environmental elements that affect the money flow of the financial community, shareholders and owners as well as the government.
Also Read: Understanding Accounting Systems – Functions, Components, Objectives, Relationships, Examples, Experts
2. Financial Output Subsystem :
- Forecasting System, performs long-term forecasting of the next 5-10 years to provide the basis for basic planning for strategic planning.
- Fund Management Subsystem. Relating to the flow of money through the company.
- Controlling Prepare annual operating budgets and then provide feedback information to managers so that they can monitor actual costs against budgets.
Scope of Financial Information System
- The scope of the implementation of the Sikompak application in the Accounting/Bookkeeping Division includes recording and processing data on financial transactions that include journalizing. posting to produce the company's financial statements (General Ledger System).
- The scope of the Fixed Assets and Inventory Information System consists of adding and subtracting mutations to fixed assets and inventories as well as calculating depreciation and book value of fixed assets.
- The scope of implementation of a computerized Billing System consists of several sub-systems, including sub-systems new connection, account administration sub-system, customer service sub-system and billing and sub-system cash receipts.
Example of a Financial Information System
About PT. CCAI
Coca-Cola Amatil Indonesia is a subsidiary of The Coca-Cola Company which owns the Coca-Cola trademark. PT. Coca-Cola Amatil Indonesia has been established and started to take part in the domestic industry since 1927, at which time it was named De Nederland Indische Mineral Water Fabrieckwhich later changed its name to The Indonesian Bottles Ltd. N. V. (IBL) has since changed its status to become a national company.
In 1971, IBL changed its name to PT Djaya Bevarages Bottling Company (PT. DBBC) which is the first modern bottling plant in Indonesia. The addition of capital led to an increase in factory capacity which was followed by the addition of a variety of products produced in various packaging sizes.
The company name change occurred again in 1993, at which time all shares of PT. DBBC was taken over by Coca-Cola Amatil Ltd, Australia. PT. DBBC changed its name to PT. Coca-Cola Amatil Indonesia. In 2000, all Coca-Cola branded beverage bottling factories in Indonesia were officially merged into one under PT. CCAI. Until now, there are 11 Coca-Cola factories operating in various provinces in Indonesia.
The Role of Information Systems in the Company
Coca-Cola Amatil Indonesia is a company that seeks to take advantage of developments in technology and information systems in its business development strategy; Where information systems are always needed by any company including PT. Coca-Cola Amatil Indonesia to process data used in business operations. Such an operations support system produces a variety of information products that managers can use to assist decision making.
Also Read: Understanding Financial Management – Concepts, Objectives, Functions, Analysis, Tasks, Principles, Experts
Further processing by the management information system is usually still required. The role of the company's operations support system in business is to process business transactions efficiently, control production processes, support communication and corporate cooperation, updating the company database, and most importantly increasing the effectiveness of the company's operations and the absorption of the company's products in market.
Application of DSS in the Company
One of the methods used to analyze consumer behavior is Market Based Analysis the mechanism must be preceded by an in-depth analysis of customer transaction data using the concept of data mining. The use of data mining is expected to help speed up the decision-making process for management and enables companies to manage the information contained in transactions into a knowledge. That way, the company's income can increase and in the future the company can be more competitive.
Currently PT. Coca-Cola Amatil Indonesia has an integrated system in the form of Enterprise Resource Planning (ERP) that supports all existing business processes, but not yet maximally used as a reference for determining marketing strategies company. Therefore, the role of DSS is needed to explore and analyze consumer behavior towards the purchase of a product through historical data of customer transactions for two years.
Coca-Cola Amatil Indonesia uses several parameters in making decisions, including ranking (rank) based on revenue earned in each region, market penetration, basket index to determine the percentage of purchases product of PT. Coca-Cola Amatil Indonesia, the market share of PT. Coca-Cola Amatil Indonesia is compared with other companies' products, the number of product sales, and the value of retail sales each month to increase its sales.
While the data used is secondary data in the form of a time series with a period of the last two years. This type of data source comes from the company's external data obtained through cooperation between PT. Coca-Cola Amatil Indonesia with each outlet through trading terms that have been agreed by both parties. For now PT. Coca-Cola Amatil Indonesia has collaborated with outlets such as Matahari, Carefour, Giant, and Indomart. Through the training process, the data accuracy is close to 98% so that the resulting information can be used to assist the decision-making process, especially to support strategy marketing.
As previously explained, the application of this DSS application is used to support marketing strategies in penetrating the market so that the company is expected to be able to develop a customer system profiles. It is hoped that the company will be able to create and carry out effective promotions based on the appropriate market segments so that sales targets will be easily achieved and not less competitive with competitors.