Financial and accounting information systems (FAIS) are systems that provide information related to the accounting and financial activities of an organization.
Financial and accounting information systems (FAIS) include a large number of subsystems such as budgeting, cash and asset management, capital budgeting, portfolio analysis, general ledger, accounts receivable, inventory control, and payroll systems that address the operational, tactical, and strategic information needs of the business.
The subsystems under Financial and accounting information systems (FAIS) are briefly discussed below:
- Budgeting: Budgeting is the process of estimating the amount of money a person or entity must earn or save during a specific time period, and of planning how the person or entity will spend it.
- Cash and Asset Management: Cash management is a vast area of finance including the collection, usage, and handling of cash. It includes assessing cash flow, market liquidity, and investments. In the world of financial services, asset management is cash and securities’ managed investment. In the industry of financial services, asset means cash and stocks, and securities. There are also other kinds of asset management, like the management of physical products and manufacturing assets, but this term is most commonly applied within the industry of financial services.
- Capital budgeting: Capital budgeting refers to the process, a firm or company undertakes for evaluating potential major investments or projects.
- Portfolio analysis: It is a study of the elements included in a combination of products for making such decisions that will improve overall return.
- General ledger: The general ledger gives a record of every financial transaction that occurs during the life of a functioning company.
- Accounts receivable: On the balance sheet, it is an asset account representing short-term due money to a company.
- Inventory control: Inventory control is also called stock control. It is maximizing and regulating the warehouse inventory of a company.
- Payroll systems: Payroll systems include everything dealing with the employees’ payments and the employment taxes’ filing.