Financial Information

Topics: Income statement, Balance sheet, Financial statements Pages: 8 (2912 words) Published: April 6, 2013
How can a company use information technology to make its company financial plans? Information technology offers a great depth of knowledge to many companies when making financial plans. Information system helps businesses to gather and share information which is vital in financial planning of any kind of business enterprise, for instance customer’s preferences, and business environment. That’s why is recommendable to have in depth knowledge of your business so as to make of the right kind system that will improve your business, without being a burden to the entire organization. One of the major applications of IT and computers in business is keeping and managing financial records. Majority of large and smaller companies have installed programs in their computers that are capable of keeping, sharing and maintaining their employee’s records in large database, for instance a workers clocks in at Exxon Mobile facility in Baton Rouge, and his time is transmitted to the payroll at the headquarters in West Virginia The IT plays a big role as the information is disseminated from different subsidiary to the corporate headquarters and can be used to plan on how much resource, wages and salaries to plan for each an individual subsidiary. Similar programs and databases are used in such business planning such as supply chain, by tracking when goods were shipped out, to the expected arrival date of the goods to the end users. The same programs can also track down the payments made and when is supposed to be received. In fact, it has become a formality in the 21st century as many companies transform themselves to the new era of technology advancements; in order to remain competitive and be able to carry on business smoothly they need computers and information technology. This transformation has been seen in many businesses be either small or large, where they have replaced what a used to be a cash register with a point-of-sale (POS) terminals, for instance at Chick-A-Fil. These POS terminals has the capability to print a sales receipt for the customer, and at the same time rely information to the purchase department alerting them when each item is sold, which is very handy in inventory management of items already in stock and items need to be ordered. . IT also enables companies to create business, marketing and financial plans. These plans include the concept and objective or the business, marketing function of a product or service and prepared budgets and projected financial statements. How can a company use IT technology to analyze its financials? Companies have an advantage of utilizing IT such as computer-based accounting information systems as oppose to paper or manual methods used to analyze financial data. Because reporting is major tool for organizations to accurately see summarized information used for decision-making and financial reporting, the use of technology is imperative. IT allows companies to produce efficient business and marketing plans which may include sophisticated charts and graphs needed to analyze finances in a detailed format. The accounting information system pulls data from the centralized database, processes and transforms it and ultimately generates a summary of that data as information that can now be easily consumed and analyzed by business analysts, managers or other decision makers. This system must ensure that the reports are timely so that decision-makers are not acting on old, irrelevant information and, rather, able to act quickly and effectively based on report results. Consolidation is one of the greatest tools of reporting as people do not have to look through an enormous number of transactions. The advances in technology such as an accounting information system allow companies to produce financial statements. A financial statement is a comprehensive report which illustrates the financial status and position of an organization in terms of profits made, investments, assets, liabilities,...
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