Hello, in this post we will discuss the Management Information Systems or MIS reports in accounts.
We will cover the following topics in detail:
- What is MIS reports in accounts?
- Components of MIS reports in accounts
- Importance of MIS reports
- Different types of MIS reports in accounts
What is MIS reports in accounting?
As per CIMA, MIS stands for Management Information Systems. It is a collaborative report on people, organizations, technology and also about relationships among people and organizations affecting the company.
In general, the accounting will give a broad perspective on the financial position of a company like a record of all incomes, expenditures, assets and liabilities in its possession.
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.
This kind of administrative reporting is used by all kinds of businesses whether small or large and in every industry as it gives specific information to the management.
In the MIS report, the company will also aim to gather professional insights to help them identify and rectify those problematic areas.
This brings a notable increase in the efficiency rate in the company’s management operations. It also helps to anticipate salary and execution of the organization.
Components of MIS report in accounts
- Cost reports, (classification of direct, indirect, variable and fixed costs)
- Variance reports which have differences between what ideation and the actual result.
- Profitability factors and value drivers report, which tell the management what happened with the key factors in their business (sales quantity, sales price, cost per unit, profit per unit)
MIS has no standard format as it only depends on what the company management wants to see at that point in time.
Importance of MIS reports in accounts
- It helps to track the company’s financial growth, analyze and report the business income.
- The analyzes of data from sources like employees, personal knowledge, documents, management, raw data, business models and executives. So, it can identify and solve problems as well as help the company to take decisions.
- The data gathered from different outcomes are then presented in graphs, charts, and tables etc.
- It helps to maintain communication between employees and also between the employer and employee.
Different types of MIS reports in accounts
Given below are some examples of different types of MIS reports in accounts.
1. Sales Report
The marketing and sales division prepares the sales report. It will have a complete sales analysis of different products sold in different geographical areas by the concern.
The analysis report is mainly based on the budgeted and actual sales figures. Thus he/she can see a difference between budgeted and actual sales figures, known as sales variance, with reasons.
An organisation will have to prepare several types of budgets like income and expenditure budget, production budgets, cash budgets etc.
Thus these budgets will have much internal information about the organisation.
3. Production Report
The manufacturing division gives information about the production targets achieved by the production department.
It also gives information about the variation between budgeted production and actual achievements.
4. Cash flow statements
It has the exact figures of inflows and outflow of cash during the period of operations. An outline of the source of funds utilised when outflows are more than inflows.
5. Funds flow statement
The accounting and finance division prepare this statement. It also gives information about the various sources of funds and their applicable areas during any period.
6. Budgeted and actual profit Report
The accounts department of an organisation will create this report. It gives clarity on the figures of budgeted and actual profit during a specified period.
It also includes reasons for any decrease or increase in the actual profit figure.
7. Machine utilisation Report
The superior in-charge of the manufacturing division will prepare the machine utilisation report. So, it will have details like the time utilised by the machines for different kinds of jobs.
It will also have a duration of time for which the machine had remained idle.
8. Report on financial statements
In an organization, income statement and balance sheet give financial information not only to shareholders but also to the government and other concerned parties.
9. Report on the ideal time
The floor level of the manufacturing division by time booking prepares this report. It shows the time spent by the worker on different jobs and also when he was not working.
The non-working state of a worker can be due to shortage of material, electricity or any other resource.
10. Abnormal losses Report
The manufacturing division will create abnormal losses report. Any increase in product cost arising due to abnormal situations due to material, labour and ideal facilities can be seen in this report.
11. Cost Reports
Different departments in an organisation will create several kinds of cost reports. These reports give different types of information to the management.
For example, the production cost report, departmental cost report etc.
12. Statistical publications
Various types of statistical information are collected and consolidated from published as well as from other sources.
So, they are utilized for the plan formulation, decision making and control in an organisation.
13. Orders in hand Report
The marketing and sales division create this report. It also includes the orders received in respect to its products with the ratio of orders in hand to production capacity.
14. Other Reports
The other reports and statements in MIS reports will include daily production statement, stock statement etc.
We have come to an end of this post on the MIS reports in accounts. What do you think about this blog post? Share your views in the comment section.