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4.FINANCING CYCLE

 

A company issues debt
instruments to lenders, followed by a series of interest payments and
repayments of the debt. Also, a company issues stock to investors, in exchange
for periodic dividend payments and other payouts if the entity is dissolved.
These clusters of transactions are more diverse than the preceding transaction
cycles, but may involve substantially more money.

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Also in this cycle it give cash and get cash,
it give cash to all business cycles payroll cycle , expenditure cycle , and it
get funds from Revenue cycle and provides data to general ledger and report
system.

 

 

 

     
It
providing funds to the expenditure cycle and the human resources cycle and then
sending data to the general ledger and reporting system.

 

 

 

 

 

 

 

 

 

 

 

The
financial cycle connected to all other cycles: revenue, expenditure and human
resources.

 

·        
 The
financial cycle receives funds from the revenue cycle which is generated from
Musharakah, Mudaraba etc.

 

·        
The financial cycle makes cash disbursements
to the expenditure cycle to check the invoices whether valuable or not and then
classifies them either as expenditures or tangible assets

 

BISB
provide the following financing services:

 

1. Personal financing:

 

Tas’heel
has been designed with strict adherence to the principles of Islamic Sharia’a
as a personal finance product on a Murabaha basis.

 

·        
Maximum Finance Amount:
BD100,000

 

·        
Processing Fees:
BD120

 

·        
Maximum Tenor: 7
years

 

·        
Salary Transfer:
Obligatory

 

Tas’heel
is offered for the following purposes:

 

·        
Education and training (within Bahrain or
internationally), Treatment and medical care (within Bahrain or
internationally), Marriage and associated expenses, Family tourism and travel
and many other services.

 

2. Property financing:

 

·        
 Maximum Finance Amount: BD750,000(residential)
and BD 1,000,000

 

·        
Down payment: compulsory

 

·        
 Processing Fees: 0.75% of finance amount

 

·        
Maximum duration: Varies from 10 to 25 years
based on the application.

 

·        
Salary Transfer: Compulsory

 

The
Property Finance product designed by BISB can be used to:

 

·        
Finance ready properties for residential
purposes.

 

·        
Finance commercial properties.

 

·        
Re-finance owned properties

 

Other
contracts available to the customers:

 

·        
Ijara with promise to own (for financing
ready residential units)

 

·        
Ijara (for financing under construction
properties)

 

·        
Diminishing Musharaka (for financing
commercial properties)

 

3. Automobile financing:

 

BISB
facilitates the path of acquiring a Sharia ‘a compliant finance to possess the
car that a customer desire. BISB’s Auto Finance can be used to facilitate new
or used vehicles.

 

·        
Maximum duration: 7 Years (Employed), 5 Years
(Self-Employed).

 

·        
Maximum Finance Amount: BD50,000

 

·        
Salary Transfer: Obligatory

 

·        
Processing Fees: BD100.

 

 

 

 

STRENGTHS
AND WEAKNESSES POINTS

 

STRENGTHS:

·        
The Computer based information systems in
Bahrain Islamic bank is useful in upgrading their uses and expand their
influence in order to realize the strategic competitive advantage that is
definite for a bank.

·        
In order
to use the system for longer period, BisB consistently updates and develops its
system.

·        
In order
to minimize errors and save time the system use computerized reporting in paper
work rather than manual reporting.

·        
Appropriate
information is provided by the system for the decision making process.

·        
To ensure
the efficiency of the system; Information, transaction and other documents are
safely stored.

·        
In the
system the information is stored in appropriate way so that the users can
easily understand and use them.

 

 

WEAKNESSES:

Everything good comes with its own price and same goes for the
technology, Although the use of technology has 
made our life easy and simple but 
using computerized accounting system its own issues and risks, such as
hackers can steal the data(data theft) and use it for identity theft or other
purposes. Data can be destroyed by viruses, as computer fraud is a concern. To
protect the data the Bank needs to install strong Anti-virus software and also
it should implement a control system for those who can access information, in
particular customer information. In case of data loss due to lack of security
management can be personally responsible. The bank also needs to make sure that
the data is entered correctly in the system, as a data entry error can be disposed
of a complete set of data.

 

 

 

 

 

RECOMMENDATIONS

 

BISB has followed several strategies which would improve
the system and help the company to grow rapidly. However it is recommended to
ensure the following:

 

Ø  BisB must continue developing an excellent
monitoring system in order to limit hacking attempts which are getting stronger
in this era.

Ø  As technology is evolving rapidly, Bisb
should continue keeping the consistency in updating and developing the system.

Ø  The bank should create backup files regularly
in order to cope up with the data loss.

Ø  It is also recommended that the employees
should have proper skills to use the modern devices and programs.

Ø  It should train the employees in case of
adopting new system or updated version. Also the company should provide full
knowledge of the AIS to the new employees.

Ø  It should hire highly qualified specialists
in order to ensure the development and maintenance of the accounting information
system.

Ø  It
should always monitor antivirus expiration dates to prevent expiration in all
the computers.

Ø  The
bank should use the latest technology in order to meet the market requirements.

Ø  However,
it is better to consider the cost-benefit while making any decision.

 

 

 

 

 

 

 

 

 

 

 

 

 

CONCLUSION

Accounting information
system played an important role inside the organization to improve its
accounting system to maintain high level of communication, accuracy,
integration and customization .The
aim of the project was to evaluate and explain the accounting information
system used in the Bank as well to study the accounting cycle used in the Bank.
Also, to find the strengths and weaknesses of the AIS to overcome the weakness
points and improves the strength points. All the information in this project
were gathered from the Bank’s website and queried personally from the
representative of AIS of BISB Bank, discussing pros and cons of AIS to the
Bank, how the Bank implement their AIS in such ways that improve its efficiency
and quality of the AIS. The report contains a brief explanation on the AIS and
the type of software used by the BISB. The main system BISB uses is “oracle
accounting software” which is one of the most acknowledged accounting
information systems. Also, the accounting cycle’s procedures of the bank are
explained briefly. Based on the information collected; we observed that Bahrain
Islamic bank consistently updates and develops the system to ensure that it can
be used for a long period which is a strength point to BISB. On the other hand,
some weaknesses are captured regarding the use of a computerized accounting
system. That is backed by problems like loss of data etc. But these problems
can be overwhelmed through regular backup of files.

 In conclusion, accounting
information system provides its users with so many advantages and disadvantages
in today’s business. Accounting information system combines collecting,
storing, controlling and monitoring with designing and the implementation of
the information systems. It also combines the modern information technology and
the traditional accounting system to provide a better financial system to
manage and improve the financial performance of the Bank.

 

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