Management Information Systems and Accounting Information System
Now, you can tweak your checkout process or offer your customers other incentives for completing their purchases, thus increasing sales. Some retail companies will go so far as to email customers who have abandoned their carts and offer promotional codes. You can bet that these savvy companies are doing so because their data showed that far too many customers were abandoning full carts, and this tactic works to reel them back in. The term Management Information System sounds complicated, but actually the concept is quite simple when you break it down.
MIS reports in accounts – Importance, Components and examples
But did you know computers are also essential to an organization’s decision making? There are computer software and systems that help businesses analyze data in a scientific way to ease the decision-making process.
Management Information Systems ensure that all the members of the decision-making group have access to all the data that’s required to make the decision even if they are working from different physical locations. These systems make use of information technology to help managers ensure a smooth and efficient running of the organization. Information collected by these systems is structured so that the managers can easily evaluate the company’s current performance vis-à-vis previous outputs. The term used to be restricted to large systems running on mainframes, but that dated concept is no longer meaningful.
Different types of MIS reports in accounts
It’s important to note that Management Information Systems don’t have to be massive networks. One example of this would be a doctor who uses an MIS to track scheduling, wait times, patient data, billing, dealings with insurance companies and accounting.
In any large company, there are many situations that call for input from several individuals or departments before decisions can be made. Without an efficient communication channel, these decisions can take a very long time. Even with good communication channels, if the different stakeholders don’t have access to all the available data, the process would hit a number of snags before it’s complete.
Before making a decision that will affect the overall standing of the business, a lot of precaution must be taken. There is a need to check and verify that the company will not suffer after making a decision.
Upon implementation, the assigned users will have the appropriate access to relevant information. It is important to note that not everyone inputting data into MIS need necessarily be management level. It is common practice to have inputs to MIS be inputted by non-managerial employees though they rarely have access to the reports and decision support platforms offered by these systems.
ERP software is a subset of MIS and IT management refers to the technical management of an IT department which may include MIS. Maeve Cummings, Co-author of Management Information Systems for the Information Age and Professor of Accounting & Computer Information Systems at Pittsburg State University in Pittsburg, Kansas, explains how MIS functions in academia. “[Management information systems is] the study of computers and computing in a business environment. Computer science focuses on the machine while information systems, or management information systems, focuses on how IT can support the strategy and operation of organizations,” she explains.
- It also helps keep good track of performance since production and sales numbers will be recorded and stored in a central database that can be accessed by all members of the MIS.
- Data from everyday operations in the company is collected and brought together with data from sources outside the organization.
Management Information Systems enable executives to run what-if scenarios so that they can see how some of the important metrics in the business will be affected by a given decision. The data is presented in easy to understand reports and graphs that make interpretation easy. For example, a human resource manager will be able to tell what will happen to the revenue, production, sales and even profit after reducing the number of workers in a manufacturing department. Once executives have been able to see whether or not the decision will be beneficial to the company, it is easier to make good decisions that will not leave the company in chaos. We all know the invaluable worth of computers in our daily lives and our work.
An MIS can be used to aid in the planning of many different functions of a business, such as marketing, logistics, personnel, finance and accounting, information planning and upper management. Using marketing as an example, an MIS helps forecast sales and analyzes the behaviors of customers. A report might reveal that your potential customers are spending time shopping on your website, only to abandon their carts when they encounter the checkout process.
Within companies and large organizations, the department responsible for computer systems is sometimes called the MIS department. Other names for MIS include IS (Information Services) and IT (Information Technology). One of the reasons why Management Information Systems are favored by large companies is the effectiveness of the reporting features. The decisions can be made quickly because the information is presented in an easy to understand format.
Accounting Information System (AIS)
In the same vein a small manufacturer’s rep organization with three principals on the road and an administrative manager at the home office has an MIS system, that system becomes the link between all the parts. It can link to the inventory systems, handle accounting, and serves as the base of communications with each rep, each one carrying a laptop. Virtually all small businesses engaged in consulting, marketing, sales, research, communications, and other service industries have large computer networks on which they deploy substantial databases.
Or, a freelancer might use an MIS to track their hours, invoicing, clients, marketing efforts and sales. A Management Information System, or MIS, collects data from many different sources and then processes and organizes that data to help businesses make decisions. These days, technology and data collection are so prevalent that businesses large and small are using Management Information Systems to improve their outcomes. A good MIS can give your business a competitive advantage because it turns thousands of data points into helpful, usable information that can be used to tweak your strategy and increase profits.
Data from everyday operations in the company is collected and brought together with data from sources outside the organization. This enables a healthy and functional relationship between distributors, retail outlets and any other members of the supply chain. It also helps keep good track of performance since production and sales numbers will be recorded and stored in a central database that can be accessed by all members of the MIS. Access to this information also helps ensure that problems are detected early and decisions are made quickly using the latest information.
What is MIS in accounting?
What is MIS reports in accounting? As per CIMA, MIS stands for Management Information Systems. Thus MIS report provides information on the day to day accounting activities, help to make business decisions and track the progress of the business. Business managers at all levels of an organization rely on these reports.
Let us look at two such functionsManagement Information Systems (MIS) and Accounting Information System. management information system• MIS refers broadly to a computer-based system that provides managers with the tools for organizing, evaluating and efficiently running their departments.
The fact that the system is accessible by people from different parts of the organization makes it an effective reporting and communication tool. Findings can be shared among colleagues with all the necessary supplementary data. It is also possible to create brief executive summaries that sum up the whole situation for review by senior company executives in situations that need their approval.
For example, a clothing retailer tracks inventory, manufacturing, personnel, online and in-store sales and marketing, just to name a few. An MIS collects all of this data from various sources, processes and organizes it. Next, the MIS takes all of this processed data and generates a user-friendly report that management can consult while making decisions. Using the clothing retailer example, a manager might look at an MIS report and learn that on Wednesdays, in-store business is slow and, therefore, the store is overstaffed. The manager can now make the decision to cut back employee hours on Wednesdays, keeping in line with demand.
MIS are more organization-focused narrowing in on leveraging information technology to increase business value. Computer science is more software-focused dealing with the applications that may be used in MIS. Electrical computer engineering is product-focused mainly dealing with the architecture behind computer systems.