Corporation: Financial Management Systems

financial management system

A financial management system is the methodology and software that an organization uses to oversee and govern its income, expenses, and assets with the objectives of maximizing profits and ensuring sustainability.

An effective financial management system improves short- and long-term business performance by streamlining invoicing and bill collection, eliminating accounting errors, minimizing record-keeping redundancy, ensuring compliance with tax and accounting regulations, helping personnel to quantify budget planning, and offering flexibility and expandability to accommodate change and growth.

Other significant features of a good financial management system include:

  • Keeping all payments and receivables transparent.
  • Amortizing prepaid expenses.
  • Depreciating assets according to accepted schedules.
  • Keeping track of liabilities.
  • Coordinating income statements, expense statements, and balance sheets.
  • Balancing multiple bank accounts.
  • Ensuring data integrity and security.
  • Keeping all records up to date.
  • Maintaining a complete and accurate audit trail.
  • Minimizing overall paperwork.

ERP financial management software should include features that support creation of ad hoc reporting as well as month-end closing, quarter closings and year-end reporting.

This was last updated in March 2012

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Source: searchfinancialapplications.techtarget.com May 20, 2014 – 02:41 pm

No, they're describing accounting

2003-07-23 15:58:55 by pesky

They're just saying the problems with their accounting are very serious.
Gregory Kutz, director of GAO's financial management division and co-author of that report, likened Defense to a dysfunctional corporation, with the Pentagon cast as a holding company exercising only weak fiscal control over its subsidiaries -- the Army, Navy, Air Force and Marines. Today, DOD has about 2,200 overlapping financial systems, Kutz said, and just running them costs taxpayers $18 billion a year.
"The (Pentagon's) inability to even complete an audit shows just how far they have to go," he said

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