A

PROJECT REPORT
ON

“Financial MIS”
SUBMITTED TO

M.C.E SOCIETY’S
ALLANA INSTITUTE OF MANAGEMENT SCIENCES, PUNE.

IN PARTIAL FULFULLMENT OF

MASTER OF BUSINESS ADMINISTRATION

DEVELOPED BY

MISS. AYESHA NASARUDDIN SHAIKH

MISS. TAMBOLI HEENA LATIF

MR.SANGE ABRAR BASHIR

UNDER THE GUIDANCE OF

PROF. DR. ASHFAK SHAIKH

 INTRODUCTION

The Management Information System is a concept of the last decade or

two. The role of MIS in an organization can be compared to the role of heart in the body.
Most of the organizations be it small or large are using computer based information system
with centralized, decentralized or distributed networks connecting data flow from and to
the various departments/ branches. Hence the MIS is defined as a system based on the
database of the organization evolved for the purpose of providing information to the people
in the organization. The development of MIS in finance can improve the system’s
functions, performance and productivity. This report includes a study of designing the
Financial Management Information System (FMIS) and to show how FMIS benefits the
organization by aiding the managers to achieve their goals from financial perspectives. It
facilitates them to see if the performance is on the right track, based on the existing
financial database. The read-only reports are presented to the executives in Excel by
pulling in the data from the Tally database using the Microsoft Office tool. The automation
of watch register is an application that keeps a watch on all the receipts and payment bills
and check with the budgets allotted. The user- interface developed using Visual Basic is to
enter, view and delete the data. The data is stored in Oracle9i database. In this endeavor,
atomizing different registers and reducing the manual work of calculations aid finance
system. Thus MIS designed throws light on the importance of easy access to useful
information to the executives in improvising the system performance.
 WHAT IS MIS?

A Management Information System is a set of combined procedures that

gathers and produces reliable, relevant, and properly organized data that supports the
decision making process of an organization. To sum up, it is a group of processes through
which data is obtained, sorted, and displayed in a useful way for decision-making
purposes.

Management Information Systems are very useful tools for the purpose of reviewing and
controlling company’s operations. The main goal of these systems is to organize all data
collected from every level of the company, summarize it, and present it in a way that
facilitates and improve the quality of the decisions being made to increase the company’s
profitability and productivity.

These systems are typically are computer-based including either simple excel sheets or
more complex platforms. The information being collected and gathered for the system
normally comes from both inside and outside sources

According to Heidarkhani et al.:

“Management information system is kind of organizational information

computer systems, that take internal information from operating processing system and
summaries them to meaningful and useful forms as management reports to use in
performing management duties.”

According to Nowduri & Al-Dossary:

“Management information system is a computer based information system that

provides for management oriented reporting based on transaction processing and business
operations of the organization.”
According to James O. Hicks, Jr:

“A management information system is a formalized computer information

system that can integrate data from various sources to provide the information necessary
for management decision making”

According to Robert G. Murdick:

“The system that monitors and retrieves data from the environment, captures
data from transactions and operations within the firm, filters, organizes, and selects data
and presents them as information to managers, and provides the means for managers to
generate information as desired is called the management information system (MIS)”

The reason why Management Information Systems are very important

in the day to day operation of companies is because these systems work with people,
organizations, technology and relationships among the people and organizations affecting
the company.

This means that when properly implemented, Management Information

Systems will help achieve a high level of efficiency in a company’s management
operations.
 FINANCE
<

Finance is defined in numerous ways by different groups of people. Though it is

difficult to give a perfect definition of Finance following selected statements will help you
deduce its broad meaning.

1. In General sense:

"Finance is the management of money and other valuables, which can be easily converted
into cash."

2. According to Experts:

"Finance is a simple task of providing the necessary funds (money) required by the
business of entities like companies, firms, individuals and others on the terms that are most
favorable to achieve their economic objectives."

3. According to Entrepreneurs:

"Finance is concerned with cash. It is so, since, every business transaction involves cash
directly or indirectly."

4. According to Academicians:

"Finance is the procurement (to get, obtain) of funds and effective (properly planned)
utilization of funds. It also deals with profits that adequately compensate for the cost and
risks borne by the business."
 FINANCIAL MANAGEMENT INFORMATION SYSTEMS
(FMIS)

Financial management information system is information system

that tracks financial events and summarizes information supports adequate management
reporting, policy decisions, fiduciary responsibilities, and preparation of auditable financial
statements should be designed with good relationships between software, hardware,
personnel, procedures, controls and data. Generally, financial management information
system refers to automating financial operations.

Financial Management Information Systems (FMIS) support the

automation and integration of public financial management processes including budget
formulation, execution (e.g. commitment control, cash/debt management, treasury
operations), accounting, and reporting. FMIS solutions can significantly improve the
efficiency and equity of government operations, and offer a great potential for increasing
participation, transparency and accountability. Whenever FMIS and other PFM
information systems (for example, e-procurement, payroll, debt management) are linked
with a central data warehouse (DW) to record and report all daily financial transactions,
offering reliable consolidated platforms can be referred to as integrated FMIS (or IFMIS).
The World Bank is a leading provider of financing and technical assistance for FMIS
development.

The Ideal FMIS Systems

 An ideal or well-designed system should:

 Collect accurate, timely, complete, reliable, consistent information.
 Provide adequate management reporting.
  Support government-wide and agency policy decisions.
 Support budget preparation and execution.
 Facilitate financial statement preparation.
 Provide information for central agency budgeting, analysis and government-wide
reporting.
 Provide complete audit trail to facilitate audits.

Other Aspects Of Financial MIS

 Budget Planning

Financial budget planning uses proforma or projected financial statements that serve as 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.

 Financial Reporting

The use of MIS systems in Finance 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.

 Financial Modeling
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.

Uses of Management Information System in Finance:

Management Information Systems (MIS) in Finance have

been widely adopted both by corporations as well as governments. They are information
systems with capacity to maintain large data bases enabling organizations to store, organize
and access financial information easily. These systems are primarily used for accounting
operations and generation of financial reports.. Increasingly they are also used to support
budgetary, planning and decision making processes. These systems are credited with
increasing financial transparency, efficiency and accountability.

 General Ledger

The main use of a management information System (MIS) in finance is that it

automatically updates all the transactions in the General Ledger. The General Ledger is the
core component of all financial information systems

Financial transactions are simultaneously posted on the various accounts that comprise the
organization's "Chart of Accounts". Simultaneous updating of accounts such as sales,
inventory and accounts receivable, reduces errors. It also provides an accurate and
permanent record of all historical transactions.

 Cash Management
Cash flow management is an important use of MIS in Finance. 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. This can help pin
point areas that eat up cash flow such as inventory costs, high raw material costs or
unreliable sales.

 FMIS Building Blocks

An FMIS will consist of several elements with different functions. In the

description that follows, the term “module” will imply that the system is a sub-element in a
FMIS. The core of an FMIS could be expected to include the following modules and
systems:

 General ledger
 Budgetary accounting
 Accounts payable
 Accounts receivable

The noncore or other modules are, inter alia:

 Payroll system
 Budget development
 Procurement
 Project ledger
 Asset module.
 ADVANTAGES OF FINANCIAL MIS

 Financial Management Defined

Financial management involves the creation and installation of financial principles that
position a company to achieve its main goal – increasing the value of the business for the
owner. Financial management, which includes debt financing and cash flow management,
collects and uses information to make sound decisions. Financial management systems
enable businesses to leverage financing, management and investment to reach operational
and financial goals.

 FMIS Defined

A financial management information system helps facilitate financial management in a

company by automating financial operations. It is an automated application that uses one
or more software programs, internal policies and documented procedures to record, track
and summarize company, departmental and functional budgets. In addition, companies use
their FMIS systems to prepare financial statements, track decisions that impact profits and
track the consequence of financial decisions.

 Information Transparency

One key benefit of a financial management information system is transparency of

information. Often, the owner and the accounting and finance-related personnel are the
only ones who know and understand what is happening financially with the company.
Through the use of an FMIS, all individuals with access to the system can check on aspects
of a company’s financial performance. This helps managers of other departments and
functions better understand how and to what extent what they do impacts the business.

 Budget Control
As companies grow larger, the budgeting process becomes more complex. Because
different departments can track their spending and make ongoing adjustments through an
FMIS, it reduces budgeting complexity. Instead of having to regularly meet to discuss the
budget and any changes, department heads can see what they and others are doing and
provide insightful commentary on any issues that arose that did impact or could impact
their respective budgets. This also facilitates tighter budget control.

 Strengthens Financial Controls

For an FMIS to be effective, it requires companies to put systems, procedures, policies and
methodologies in place. It may require one or more software systems. For example, an
FMIS may require an accounting software package, a database system and an enterprise
resource planning software program that pulls financial-related data from the accounting
and database systems. All of these working together serve to significantly strengthen a
company’s internal financial controls.
 DISADVANTAGES OF FINANCIAL MIS

 Expensive

Installing a management information system can be expensive for a company. Information

technology—while cheaper today than previous years—can represent a significant
expense, especially for larger organizations. These systems may also require ongoing
support or upgrade fees, which can represent future fixed cash outflows. Companies must
create a budget to pay for these items to ensure the information system stays current with
business technology.

 Maintenance

Companies may need to hire maintenance individuals to help keep an electronic

information system running smoothly. These individuals often need experience in
computer science functions and other business topics. Not only does this increase labor
costs, but it also requires additional training and ongoing education for these individuals.
Business technology can change frequently, creating an environment where companies
must have trained individuals who can properly maintain computers, websites, servers and
other equipment in use by the management information system.

 Ineffective

Management information systems have the potential to become ineffective in a company's

operations. As with all computer systems, the management information system is only as
good as the programmer. Gathering unimportant or non-essential information can delay
business decisions because managers must request additional input. Spending too much
time reprogramming or correcting issues can also increase the time spent in the decision
making process. Business owners and managers may also need extensive training on new
systems, creating a learning curve that will hopefully diminish over time.
 EXAMPLE

MIS IN ICICI BANK

MIS creates an evolution in whole world in every business and so in

banking system. Now in ICICI Bank with the help of information system the daily
transactions are recorded in branch computers and these branch computers are then
connected to the main head office server so in this way they keep their daily process update
on daily basis.

As Time is money, and due to IS ICICI Bank make thousands of transactions per day. In
fact, IS makes whole process much more quick, simple and reliable. Due to IS employees
can easily connect with other branches, customer service gets improved, online banking
emerged and lot of others benefits.

ICICI Online is an innovative Online Banking service that you can tailor to suit your
precise banking needs. It gives you convenient, round-the-clock banking services ranging
from day-to-day account transfer transactions to real-time valuable financial information.
Now you can manage your finances anytime, anywhere.

ORGANIZATION COMPUTING RESOURCES:

 Software Resources

Following software’s are used for the functioning of our information system and
organization

Application Software

Following application software’s are used in our organization and functioning of our
information system:
  Microsoft Office
 NOD32 Anti-Virus
 Adobe Reader

 System Software

Following application software’s are used in ICICI Bank and functioning of their
information system:

 Operating System (Windows XP and Linux) for PC’s.

 Windows 2003 server for mainframes.

 Hardware Resources
Following hardware resources are required for the functionality of IS and
organization:
 Personal computers
 Canon Document Scanners
 HP Printers
 Networking cards
 Currency counter
 Coin counters
 HP Digital Scanners
 Dell Mainframes"

 Computing Type

In ICICI bank, they are using client/server network because it is accessible and the
employees easily share the data and this network is cheaper than others and this is easily
maintainable and manageable. All the data save in main server or HUB and employees can
easily access it. This type of computing system provides an easy access and efficient flow
of data, which increase the functionality of organization.

 ELECTRONIC CLEARING SERVICE (ECS CREDIT)

ECS Credit is an electronic clearing system that facilitates paperless transaction through an
offline system. ICIC Bank facilitates ECS Credit at all ECS designated locations. We
accept the electronic file and arrange abstention of settlement date (date of credit to
beneficiary account) from RBI/SBI/Local Clearing House as the case may be. The fund
gets debited from a centralized account and credit is accorded to the respective
beneficiaries as per settlement cycle. A detailed MIS about the transactions is provided to
the customer.

 NEFT

To establish an Electronic Funds Transfer System to facilitate an efficient, secure,

economical, reliable and expeditious system of funds transfer and clearing in the banking
sector throughout India. The customer willing to avail the NEFT facility offered by us shall
submit an "NEFT Application Form" authorising the sending bank to debit the sender's
account and transfer funds to the beneficiary specified in the NEFT Application Form. The
Beneficiary's account will be credited on the same day by crediting the specified account of
the beneficiary or otherwise placing funds at the disposal of the beneficiary.

 REAL TIME GROSS SETTLEMENT (RTGS)

RTGS System is a payment settlement system that minimises the credit risk in the
prevalent cheque clearing system. Under RTGS the funds are settled on a near real time
basis across Banks in different locations. Bank offers this immediate electronic fund
transfer facility to RTGS enabled bank branches across through the country its designated
RTGS enabled locations.

 WORKING OF TPS
The way people do business has been changed significantly with the advent of the Internet
Revolution. Today customers have an option to choose from a plethora of options while
shopping for that favorite item. Web Commerce or Ecommerce has witnessed a significant
increase in revenue year on year. You can now integrate this option to your website in the
various Secured Payment Gateway Options we have to offer. Technologies are the
authorized reseller for ICICI Bank Payment Gateway Services in the state.

EBS (E-Billing Solutions) is the Merchant Account providing company partnered with
ICICI Bank that visualizes you how to become more competitive and help you to make the
changes to your online payment processing for risk free business.

EBS "Payment Gateway" is specifically designed to accommodate the increasing demand

by e-commerce companies for sophisticated payment solutions to tap the enormous
opportunities for global Internet transactions. The system also includes several exciting
new technologies that enable e-commerce businesses to make the things more customized
and backend more user friendly with advanced features and technical know-how.

 Extensive Network

"ICICI Bank has its own branches in different locations. Above this our planning with
alleged correspondent banks covering more than 900 locations ensures that most of your
cheques are covered under our network and the consciousness status can be known at the
earliest.

 Interest Costs Lower & Improved Liquidity

A committed HUB ensures that you receive funds in your chosen account within transit
time thereby reducing attention costs and improving your liquidity location.

 Centralised Service Desk

A enthusiastic service desk has been started at our Centralised Collection and sum HUB
(CCPH) to ensure that your queries are resolved rapidly and economically. The Clients can
contact CCPH concerning any query about the MIS or the course flow.

 Web CMS

Web CMS provides you with all the information at a click. Detailed MIS like location wise
collection and return, product-wise pooling, pooling in pipeline (due credit report) etc. can
be viewed and downloaded from web interface through internet.

 Comprehensive MIS

We provide inclusive MIS reports like daily report, deal report future credits news and
cheque returned unpaid report. On the outflow side we provide daily paid - voluntary status
for the demand drafts, cheques or warrants issued by your Organisation.

 Mobile Alert Service

The CMS clients availing our assortment products now have the service to subscribe to
Mobile Alert Service for receiving alerts on registered mobile phone numbers instantly
after the funds are pooled. To avail this facility, please visit nearby CMS chosen branch or
log on to our Web CMS to download the form online and send it to our branch where your
account is maintained.

ICICI bank has productively utilised its MIS in as long as banking

products to its clients and also in getting better its organisational good association. It is one
of the few banks which adapts rapidly to the changing surroundings and keeps pace with
the ever varying technology. The theatrical events ushering in the new century from
globalization and a final, chief wave of consolidation to narrow changes and expertise
breakthroughs are forceful the bank to turn its focal point toward efficiency and country
association growth.
It is very vital for the bank to incessantly upgrade its MIS as the next 10 years will be
distinct by accelerated expansion of commerce as the bank is increasing nationally and
worldwide. It has to focus in improving its course efficiency to serve its client better than
its competitors. Today’s banking merchandise are getting complex every day and there is
serious threat of leakage of Client’s private information to anti-social essentials with
advent of technology. This is one of the major issues that banks face today

Inspite of all these challenges, administration information system has been an advantage to
ICICI bank. The bank has gained spectacular lead over its competitors who lagged behind
in incorporating MIS in their organisations. Today, ICICI bank is one of the largest private
sector banks in India, and MIS has played a crucial role in giving it a competitive
advantage. Though the current MIS in the bank is highly helpful, the bank is very keen on
researching new heights to get better its MIS system for better efficiency in its operations
and to continue to serve its clients successfully.
 CONCLUSION

The major application of financial management information system includes financial

accounting system, which accounts for the financial transactions of the company and
produces financial results for the company. It produces balance sheet as well as the
income statement for the company where the financial performance and the financial
position of the company is published in standard format as prescribed by the
government. The system is made so comprehensive that it not only collects financial
data but also collects data on different matters such as job, department, and division and
so on. It forms a basis for certain reports which are required by the top level
management. The users of the financial data base are finance managers, cost controller,
auditors, material mangers, marketing managers, company secretaries and the top
management. Financial Management Information Systems accumulate and
analyze financial data in order to make good financial management decisions in running
the business.