1. IUBAT—International University of Business Agriculture and
Technology
“Design and Development of Financial MIS in the Context of IUBAT”
Chapter 1
“Introduction”
By: Md. Jahidur Rahman Chapter1 1

2. IUBAT—International University of Business Agriculture and
Technology
1.1 Accounting software
Accounting software is a type of computer software used by accounting
professionals to manage accounts and perform accounting operations.
It is programs used to maintain books of account on computers. The
software can be used to record transactions, maintain account balances,
and prepare financial statements and reports. Many different accounting
software packages exist, and the right package must be selected given the
“Design and Development of Financial MIS in the Context of IUBAT”
client's circumstances and needs. An accounting software package typically
contains numerous integrated modules (for example, spreadsheet and word
processing abilities). Some modules are used to account for the general
ledger, accounts receivable, accounts payable, payroll, inventory, and fixed
assets.
Accounting is the systematic practice, work or process of communicating
and recording financial information. In a business setting, this is done for
the purposes of internal and external audits, required reports and financial
analysis to meet legal or internal managerial requirements. Accounting may
also include systematic and diverse measurement, classification,
verification, summation and interpretation of financial information.
Accounting software can range from simple, single-entry programs used for
individual record-keeping to more sophisticated, double-entry systems that
can process accounts receivable, accounts payable, payroll and inventory,
among other functions.
1.2 Financial Management Information System (MIS)
Financial MIS Provides financial information to all financial managers
within an organization. It integrates financial & operational information from
multiple sources. Financial MIS eases analysis by providing fast financial
data. It enables financial analysis from different aspects; time, product,
customer. With Financial MIS, one can analyze historical and current data.
By: Md. Jahidur Rahman Chapter1 2

3. IUBAT—International University of Business Agriculture and
Technology
Also one can monitor use of funds. Few examples or functions of Financial
MIS are Costing, P&L reporting, Auditing, Funds management, etc.
1.3 Overview of Financial MIS
“Design and Development of Financial MIS in the Context of IUBAT”
Figure 1: Financial MIS
Inputs to the Financial Information System
Strategic plan or corporate policies
 Contains major financial objectives and often projects financial
needs.
Transaction processing system (TPS)
 Important financial information collected from almost every TPS
– payroll, inventory control, order processing, accounts payable,
accounts receivable, general ledger.
 External sources
 Annual reports and financial statements of competitors and
general news items.
By: Md. Jahidur Rahman Chapter1 3

4. IUBAT—International University of Business Agriculture and
Technology
Financial MIS Subsystems and Outputs
Financial subsystems
 Profit/loss and cost systems
 Auditing
 Internal auditing
 External auditing
“Design and Development of Financial MIS in the Context of IUBAT”
 Uses and management of funds
1.4 Advantages
 Faster and efficient in processing of information.
 Automatic generation of accounting documents like invoices, cheques
and statement of account.
 With the larger reductions in the cost of hardware and software and
availability of user-friendly accounting software package, it is
relatively cheaper like maintaining a manual accounting system
 More timely information can be produced.
 No more manual processing of the data- all automatically been posted
to the various ledgers/accounts and
 Many types of useful reports can be generated for management to
make decisions
1.5 Disadvantages
 Power failure, computer viruses and hackers are the inherent
problems of using computerized systems.
 Accounting system not properly set up to meet the requirement of the
business due to badly programmed or inappropriate software or
hardware or personnel problem
 Danger of computer fraud if proper level of control and security
whether internal and external are not properly been instituted.
By: Md. Jahidur Rahman Chapter1 4