What Is An MIS Report? Components, Importance And Benefits
By Indeed Editorial Team
Updated 29 September 2022
Published 13 September 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Management Information System reports or MIS reports are important for every organisation. Companies may perform hundreds of transactions every day, which they can analyse and convert into documents like performance reports and financial statements. If you are in an administrative, executive or managerial role, you may benefit greatly from understanding how MIS reports work. In this article, we discuss what is an MIS report, explore its benefits and types and learn how to prepare a report.
What Is An MIS Report?
What is an MIS report, can be explained as the reports prepared for the management of a company based on data collected automatically from different systems within the organisation. MIS is an organised system to collect, store and disseminate data in the form of specific information required to carry out management functions. It is one of the crucial tools that support decision-making processes in companies. It involves a collaboration of people, data, business processes, software and hardware. When a company has an MIS system, it can automate all the relevant processes like data collection and organisation, documentation and report generation for optimal analysis.
Large organisations may need daily reporting for few activities like sales and inventory. Before computers and the internet, a team would use phones, ledgers and calculators, and spend hours to prepare such daily reports. Today, a company can integrate all its data from different departments in multiple locations with the MIS system. For instance, by the end of a day, if the head of sales or head of purchasing needs specific sales or inventory data from a specific branch or multiple branches, they can generate such reports immediately using MIS.
How Do MIS Reports Work?
Raw data is crucial for MIS reporting. The database in an MIS system is organised in such a way that it is interrelated to all the major aspects of a company's operations. An MIS can consolidate data from the company's internal data and external sources. Such a system also stores data for long durations of time. MIS manipulates the data using preset templates and formulas and creates specific reports as and when required. Experts have developed MIS to create outputs not just as a report, but also as a query response, decision outcome, transaction document and a feedback system.
Since data is crucial for accurate reporting, a company and the resources responsible for data generation requires to ensure that the data is complete, error-free, timely, reliable and relevant. The data also has to meet pre-set standards of quality and accuracy. Once users enter data, the MIS system processes the information and creates reports to cater to specific requirements.
Components Of An MIS
An MIS has five components. They are:
People: This includes professionals from every department, who input and record data and transactions, including executives who utilise MIS for decision-making. It also includes all the support staff who ensure that the software and hardware components are running smoothly.
Data: The raw data from each department like sales figures, salaries, purchase details, bills and receivables are a key component of an MIS. Accurate data is the bedrock of MIS reporting.
Hardware: Hardware components include all input and output devices used to feed data and display output. This includes keyboards, scanners, mice, monitors, printers and other network devices.
Software: This includes applications and computer programs that are part of the MIS. Some of the tools that are required by MIS include spreadsheets, databases and CRM (Customer Relationship Management) software.
Business procedures: This includes the practices adopted by a company and can differ from company to company. Within a company, two departments can set up different business procedures for MIS to address their specific functions, scope and goals.
How Do You Prepare An MIS Report?
You can prepare MIS reports manually or with the use of MIS software. Small businesses may not invest in MIS systems and may use spreadsheets to create reports for their business purposes. For both procedures, access to complete and accurate raw data is a basic requirement. The most important requirement for preparing manual MIS reports is the service of employees with excellent skills in Microsoft Excel and MIS reporting.
These are some steps followed to prepare an MIS report manually:
Gather raw data from various departments.
Determine the structure of the report.
Determine the headings of rows and columns.
Segregate and sort data under respective headings.
Filter and remove data that is not relevant to the MIS report or decision-making.
Prepare a dashboard template using Excel formulas and pivot tables.
Extract final results using advanced Excel selection mechanisms and processes.
Importance Of MIS Reports
All businesses require performance indicator data on a periodic basis so that they can make decisions and amendments accordingly. Rather than depending on year-end financial performance, companies may need a holistic picture of their performance more frequently. For instance, a stakeholder may need current reports for making decisions on new investments or business expansion. With a good MIS in place, management can take daily, weekly, monthly or annual reports to track and predict business performance. An organised MIS eliminates inaccuracy, duplication and redundancy of data.
Benefits Of MIS Reports
MIS reports are critical for most businesses. Here are some ways in which an MIS benefits a company:
Employees scrutinise and sort data to organise it before using it for MIS reporting. Having accurate and organised data helps in easy and timely retrieval whenever a need arises. It also helps set a uniform data entry method across the company, enabling the company to enforce quality benchmarks.
Figuring out relevant information required for decision-making from large volumes of data can be time-consuming and in some cases, misleading. MIS reports can represent the same information as graphs, bars, pivot tables and pie charts. Pictorial representations make analysis easier.
Related: Types of Graphs and Charts
MIS can store historical information for a long time. Management can analyse reports over many years in terms of revenue, profit, productivity, performance, investment and expenditure. They can then assess the weaknesses and strengths of their company and make short-term and long-term plans for the company's growth.
Trends in a particular area of a business may not be visible unless we look at it in a comprehensive manner. MIS reporting can use various stored parameters and analyse positive or negative trends related to sales, production, customer service, finance, human resource and other departments. Management can then study these trends to take necessary decisions to improve productivity and revenue growth.
MIS collects information from various sources and satisfies the varied reporting requirements for different levels of management. Using the same data, we can prepare customised reports for micro and macro levels. While a sales manager may need monthly sales reports to track sales targets, the head of finance may use the same data for generating revenue projections.
MIS reports provide an overview of the business based on current data. Management can also combine past, current and speculative reports for more accuracy. Management then uses the reports as a basis for building long-term strategies for the future.
Identification of problems
Development teams build MIS report templates after considering multiple parameters and aspects associated with running a business. Executives then begin to figure out problematic areas in various departments using specific MIS reports. Visual representation of such information is useful for top management, who can then make informed inferences.
Related: 10 Valuable Data Analysis Skills
What Are The Five Types Of MIS Reports?
We can generate many reports using an MIS, depending on a company's area of operation, size, goals and available resources. Some reports are commonly used and are necessary for most organisations. They are:
Summary reports: Companies use summary reports to visualise aggregate data and provide a summary. In the report, columns may show parameters like sales figures, receivables, payables and CTC.
Budgets: Organisations need budgets as a whole and for each of their departments. You can prepare budgets for cash flow, human resources, CSR (Corporate Social Responsibility), marketing or sales with an MIS.
Cash flow statements: Tracking daily, weekly and monthly cash flow is an important task for the accounting department. They can then keep a tab on all cash transactions and balances using an MIS.
Inventory reports: Whether you are a manufacturer or retailer, it is important to keep track of your inventory so that you do not face any disruption in your supply chain. Inventory reports help a business make smart decisions relating to purchases, sales, pricing and inventory planning.
Predictive data: Predictive data is an important tool used by management for planning and preparation. With MIS, you can prepare predictive data reports based on past data and trends to speculate demand, inventory requirements and other crucial factors.
Apart from the above reports common to every industry, you can customise your MIS reporting to industry-specific needs. Some other useful reports that you can prepare using an MIS are:
Performance review report
Cost control report
Cost of goods report
Fund flow statement
Budgeted and actual profit reports
Machine utilisation reports
Reports on ideal timelines
Abnormal losses reports
Please note that none of the companies, institutions or organisations mentioned in this article are associated with Indeed.
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