Explain the nature and scope of the

financial-information management
function
Describe the responsibilities of financial-
information management in an organization
• collecting, maintaining, and reporting data about financial
transactions and assisting in the preparation of financial statements,
• Supporting budgeting activities, storing and protecting customer
financial information
Discuss data and information that an effective financial-
information management system should maintain
• Data about organizational finances
• Internal operational information
• external market
• competitive indicators
Explain the importance of financial-
information management to business success.
To control the creation and growth of records

Despite decades of using various non-paper storage media, the amount

of paper in our offices continues to escalate. An effective records
information system addresses both creation control (limits the
generation of records or copies not required to operate the business)
and records retention (a system for destroying useless records or
retiring inactive records), thus stabilizing the growth of records in all
formats
Explain the importance of financial-
information management to
business success
To reduce operating costs

• Recordkeeping requires administrative dollars for filing equipment,

space in offices, and staffing to maintain an organized filing system (or
to search for lost records when there is no organized system).
Explain the importance of financial-
information management to
business success
To improve efficiency and productivity

Time spent searching for missing or misfiled records is non-productive.

A good records management program (e.g. a document system) can
help any organization upgrade its recordkeeping systems so that
information retrieval is enhanced, with corresponding improvements in
office efficiency and productivity. A well designed and operated filing
system with an effective index can facilitate retrieval and deliver
information to users as quickly as they need it
Explain the importance of financial-information
management to business success

To preserve the corporate memory

An organization's files, records and financial data contain its

institutional memory, an irreplaceable asset that is often overlooked.
Every business day, you create the records, which could become
background data for future management decisions and planning.
Explain the importance of financial-
information management to
business success
To support better management decision making

In today's business environment, the manager that has the relevant

data first often wins, either by making the decision ahead of the
competition, or by making a better, more informed decision. A good
management information system can help ensure that managers and
executives have the information they need when they need it.
Financial-information management
problems
• Inadequate information
• Multiple master sources of data
Consequences of poor financial-
information management
• Wasted Time
Time efficiency is one of the reasons you use records management systems. With poor records
management, you usually see significant time wasted in customer interactions and record checks.
While a CRM solution allows you to quickly find and explore a customer's account, pen-and-paper
files are tedious to find and analyze. Marketing, sales and service processes are hindered by slow
research and analysis caused by poor records management.
• Poor Productivity
Records management ultimately aids your company in achieving better bottom-line results. By
reducing time wasters and costs and by improving relationships, you should see better sales and
service performance. Poor records management may contribute when your profits fall short of
expectations or revenue and profits decline. Additionally, employees tend to stay focused on
relationships and sales and service objectives when they use a system that easily monitors
performance and opportunities.
Consequences of poor financial-
information management
• Lost Files
With a well-supported and secure records management system, lost customer files should not happen.
However, failure to put in place an effective system can lead to trouble in finding files that provide
information on customer accounts, including purchases, payments and other key data to the relationship.
This affects your ability to provide the best service and sales experience to top clients. When your people
routinely lose customer data files or cannot easily retrieve them, you begin to experience lost customers or
clients, which contributes to poor results.
• Poor Organization and Clutter
Without a proper records management system, you begin to see excessive clutter and a disorganized
environment. In lieu of technology-driven records management, you would have to keep client or customer
data in file cabinets or another organizational system. This can take over the space in an office and
overwhelm your people. Additionally, an inefficient records management system makes it very difficult for
employees to keep track of customer information and inventory. Stress and tension in the office are
correlated symptoms.
Performance Activity
• Each team needs to consider the importance of effective financial-
information management within its company. Each team should make
a list of the potentially harmful 5 short-term and 5 long-term
consequences that its company would face if proper attention and
resources are not directed toward the financial-information
management function. Explain the consequence and how it can
impact business. After you have completed your lists, compare your
lists with others in the class and discuss what the businesses could do
to avoid those negative consequences.