Information Systems for Accounting and Finance PDF

# Information Systems for Accounting and Finance A primary mission of the accounting and finance functional areas is to manage money flows into, within, and out of organizations. This mission is very broad because money is involved in all organizational functions. Therefore, accounting and finance...

# Information Systems for Accounting and Finance A primary mission of the accounting and finance functional areas is to manage money flows into, within, and out of organizations. This mission is very broad because money is involved in all organizational functions. Therefore, accounting and finance information systems are very diverse and comprehensive. In this section, you will focus on selected activities of the accounting and finance functional area. ## Financial Planning and Budgeting Appropriate management of financial assets is a major task in financial planning and budgeting. Managers must plan for both acquiring and using resources. For example: * Financial and economic forecasting: Knowledge about the availability and cost of money is a key ingredient for successful financial planning. Cash flow projections are particularly important because they inform organizations of what funds they need, when they need them, and how they will acquire them. * Funds for operating organizations come from multiple sources, including shareholders' investments, bond sales, bank loans, sales of products and services, and income from investments. Decisions concerning funding for ongoing operations and for capital investment can be supported by decision support systems and business analytics applications (discussed in Chapter 12). Numerous software packages for conducting economic and financial forecasting are also available. Many of these packages can be downloaded from the internet, some of them free of charge. * Budgeting: An essential component of the accounting and finance function is the annual budget, which allocates the organization's financial resources among participants and activities. The budget allows management to distribute resources in the way that best supports the organization's mission and goals. Several software packages are available to support budget preparation and control and facilitate communication among participants in the budget process. These packages can reduce the time involved in the budget process. Furthermore, they can automatically monitor exceptions for patterns and trends. ## Managing Financial Transactions Many accounting and finance software packages are integrated with other functional areas. For example, Sage 50cloud Accounting by Sage (www.sage.com/en-ca/products/sage-50cloud/) offers a sales ledger, a purchase ledger, a cash book, sales order processing, invoicing, inventory control, a fixed assets register, and more. Companies involved in electronic commerce need to access customers' financial data (e.g., credit line), inventory levels, and manufacturing databases (to determine available capacity and place orders). For example, Microsoft Dynamics GP (formerly Great Plains Software) offers 50 modules that meet the most common financial, project, distribution, manufacturing, and e-business needs.