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What is a financial information system?

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Quick Answer

A financial information system is a software system that manages all aspects of an organization's financial transactions, including outgoings, expenses, income and assets. Almost all businesses of varying sizes make use of a financial information system, thanks to the myriad of advantages it brings.

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Full Answer

Advantages of a financial information system

In general, there are almost no disadvantages to using a financial information system, but there are a wide range of benefits any business can enjoy when using these systems.

Firstly, all company financial information is available in one place, and easily accessed by anyone in the company who needs the relevant information. Additionally, financial data stored in-house on protected software systems is much more secure than in paper document formats.

Accounting errors are far less likely when using a financial information system, as the software can make fast and accurate calculations. This also makes budget planning much easier, allowing a greater degree of flexibility when factoring in growth and change within a business.

Additionally, use of financial information systems means that any business can easily update and record an accurate audit trail. This includes being able to keep all receivables and payments completely transparent and managing multiple bank accounts, while keeping employee time optimized and paperwork low.

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