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What role does a financial and asset management information system serve in an organization? (minimum 300...

What role does a financial and asset management information system serve in an organization?

(minimum 300 words and NO PLAGIRISM , PLEASE)

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Answer #1

Financial and asset management system play a critical role for the success of the organization. It is also called the heart of the organization because it supports all financial transactions and processes. It is used in reporting for all the transactions in the organization and gives a clear picture of the assets in the organization. Financial and asset management is important because the organization is held accountable for the credibility of the financial report. There is usually an accepted range and the exception report helps to identify events that are not within the accepted range. The management needs to give critical focus on these exceptional reports for further review and to take corrective actions. A classic example in exceptional reports is identifying fraudulent transactions committed by the inventory clerk.

Financial and asset management information system is the reporting system that automates all the financial data and analyzed to facilitate the management to take important strategic decisions for the success of the organization. Business leaders use this financial and asset management system because it helps them to take faster decisions, better planning of the business, makes the business efficient, gain a competitive advantage over its competitor and it allows for the integration of the organization. It is also used to identify any transactions that do not comply within the rules or regulations.

The outputs of the financial management system are creating operation and capital budget reports, accounting or financial reports, cash flow forecasting and other financial analysis that is based on different business scenarios. This financial data that is analyzed using various financial analysis technique such as trend evaluation, financial modeling, debt ratio analysis, etc. FMIS helps in preparing credible and reliable financial statements, preparing budgets and executing it, auditing, reporting for analysis, etc.

Thus, it is pertinent to say that financial and asset management is the life blood of the organization as it is critical to its success.

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