Integrated financial management information systems (IFMIS) are computer-based systems that automate and store key financial information in large organizations like governments, multinational corporations and large nonprofit institutions. The goal of these systems is to increase access to information while decreasing long-term costs.The initial investment of time and money to implement IFMIS is high, but the improved financial transparency and information access usually offsets its initial expense.
The primary features that distinguish an integrated financial management information system from other computer systems are the reduction in duplicate data entry; implementation of internal controls for transactions, reporting and information entry; and the standardization of data classifications for financial events. IFMIS can integrate accounting-related information, or larger organizational data management systems.
IFMIS systems function as a repository for the data and processes that surround the reporting and assurance of financial responsibility. They provide financial reports and information to management; help determine budgetary decisions; increase financial responsibility; and provide internal and external reports for auditors, investors, agencies and government organizations.
Implementing an IFMIS requires mapping and defining all financial processes, documenting requirements, and outlining needed software and technology. Some commercially developed software, like PeopleSoft or SAP, can be modified for this purpose, or a system can be customized internally, depending on the organization's requirements. After a system is developed, it must be thoroughly tested and routinely evaluated to ensure financial and functional validity.
Integrated financial management information systems are technically efficient. Financial data is input once, and can then be used many times for different purposes and functions. Additionally, these systems create a shared programming environment, where code can be reused and repurposed, saving time when new functions are needed. For end users, IFMIS can provide consistent presentation that reduces training requirements and potential confusion.
IFMIS systems create one storage location for financial data and a single authentication point that allows information to be controlled and monitored. These systems also allow a central authority to regulate security access that increases overall data integrity and security. With all information in a single location, financial fraud is harder to perpetrate and easier to catch.
While a well-designed integrated financial management information system will provide for all current data and process needs of a government, organization or business, inevitable changes will require ongoing maintenance to ensure the integrity and functional use of the system. Support needs depend the type and size of the system implemented and the speed of changes.