Information systems is the most meticulous and precise method of treating any subject field. Let’s take a basic example of Population Census. In India, every 10 years there is a knock on the door to know the number of total persons in the family after subtraction and addition, age group, education, employment etc. This data is primary raw data which is collected, bifurcated, analysed, stored and communicated. From this analysed data one can conclude total population of the country, literacy rate, employment rate and so on. These conclusions helps the government to take the steps necessary for the development in particular sections. Similarly, Information systems play a key role in Finance and Accounts.
FIS/AIS or Financial and/or Accounting Information Systems is the collection and accumulation of the financial and accounting data to analyse, conclude and communicate in order to take apt business decision in accordance with the economic environment. Its a logical lineage of input and output ladder. If the input information is sabotaged, the output result is faulted. Inputs or the source documents can be bank statements, cheques, cash receipts, invoices and bills and output or the reports generated are working capital reports, cash- credit reports, accounting reports, and so on. These reports gives an impromptu idea about the business direction and helps navigate through correct and timely decisions.
The basic components of the Accounting or Financial Information Systems are:
1) Data: First and foremost materiel required is Data. Decisions taken, Policies formulated and Rules made are on the results initiated by analysing data. For this we need to collect both internal and external relevant data for the organisation. Thus, data is the basic requirement for the top managerial resource to perform.
2) Data Synthesis: After collecting numerous data, data mining is essential. Data should be bifurcated into useful and non useful data. Unwanted and unnecessary data has to be erased so as to concentrate on the relevant particulars.
3) Infrastructure: Data collected and reports generated needs a storage space and here is where the IT infrastructure is very much needed. Latest and easy to handle softwares are available to manage the data. It makes accounting simple and quick.
4) Governance: An organisation’s governance is it’s mirror image. Accuracy, timely filing of reports, eradicating malicious reports if any, check and internal control of overall resources is one of the ethical component of information system.
5) Human Resource: AIS or FIS is incomplete without human resource. At every level of management human resource needs to be managed. From data collection and analysis to decision making and formulating policies, everything has to be eyed by human resource, proving it as an important integral part of the system.
6) Policies and Principles: The fundamental principles on which all the above stated rely are:
- Control principle: Methods that allows top level management to control and manage business processes.
- Relevance principle: A system that generate reports that are useful, accurate, timely, and pertinent to objective.
- Compatibility principle: Reports generated are not unnecessary but are as per the business activities, it’s personnel and its structure.
- Flexibility principle: A system should be flexible enough to adapt to changing economies of company, business and country.
- Cost-benefit principle: The cost of system should not reap no benefits. The cost incurred should be beneficial in generating results.
Overall, Information system has become integrated part of the business. It classifies data automatically reducing the human effort. It saves time, money, energy and is fast, secured and easy to use. We are not only moving from cash to cashless economy but also from paper to paperless information system. It is easy to get lost in the vastness of data space but it is the Information systems that is helping to seek out new possibilities, explore strange ideas and take creative decisions. Thus, every entrepreneur relys on Information Systems and takes the leap of faith towards growth and prosperity of its Enterprise and hoping for a bon voyage of its Starship.