Introduction to Transaction Processing and Enterprise
,
Resource Planning Systems
Transaction Processing
- this is where the data process cycle or
transaction cycle
Enterprise Resource Planning Systems
- How organization capture and enter data
about business transaction into the AIS, and
how company processes data and
transform it into useful information, and
about the basic concept of data storage.
There are 4 Parts of the Data Processing Cycle.
1. Data Input
2. Data Storage
3. Data Processing
4. Information or Data Output
Ang pinakafinal output is the financial statement or
financial report.
Data Input
Steps in Processing Input are:
1. Capture transaction data triggered by a
business activity (event). What are the relevant
data about the transaction?
Date and time (time refers to activity)
Employee
Items sold or inventory
Quantity (also about the activity)
Prices
Delivery instruction
Bill to and Ship to address – Billing to is
where the billing or the invoice are
being sent. Ship to is the actual delivery
of the goods ordered.
2. Make sure captured data are accurate and
complete.
Completeness is also part of reliability.
Objectivity – free from error, complete
and it does not omit
3. Ensure company policies are followed (e.g.
approval of transaction.
System
Delivery – check inventory status
I. Captures data at the source when the transaction
takes place
1. Paper source documents.
We collect data about their business activities and
then we transfer the data into computer thru
encoding. When the data is entered into the
computer screens they often retain the same
name and basic format as the same paper
documents it replaces
2. Turnaround documents
Documents that are output of one company and
input to the other company. Company output
sent to external party who often adds data to the
documents and then it will be returned back to
the original company.
3. Source data automation (captured data from
machines, e.g., Point of Sale scanners at grocery
store)
POS – point of sale, this is a device captured data
in a machine readable form at the time and place
of their origin. Example: ATM
Data Captures:
 Information collected for an activity includes:
Activity of interest (e.g., sale) – pinaka
importante
Resources affected (e.g., inventory and cash)
– affected by the activity.
People who participated (e.g., customer and
employee)
 Information comes from source documents.
Source document is used to capture data as its
source when the transaction took place
 Sales order
 Purchase order
 Timecards
II. Make sure captured Data are accurate and
complete
a. Source automation or data entry screens.
One way to do this is gumamit ng source
automation or data entry screens. A well-
designed documents and screens improve
accuracy and completeness.
Related pieces of information are being
grouped close together. Drop down use or
checkboxes are options para hindi
makalimutan. Another way to improve
accuracy and completeness is to provide
instructions or prompt about what data is
being collected.
Usually the input screen lists all the data that
the user needs to enter
b. Pre-numbered
Example: Checks
We improve control if the system
automatically assigns a sequential number to
each new transaction. This pre numbering
simplifies verification. Ano bang vineverify?
Whether all the records are complete, all
transactions have been recorded and all
transactions are not misplaced or not
recorded.
DATA STORAGE
Important to understand how data is organized
• Chart of accounts
- Coding schemas that are well
thought out to anticipate management
needs are most efficient and effective
- The function is to properly
group the same transaction into the same
accounts.
• Transaction journals (e.g., Sales)
• Subsidiary ledgers (e.g., Accounts
receivable)
• General ledger
Note: With the above, one can trace the path of
the transaction (audit trail).
The company’s data are one of the most important
resources. The mere existence of relevant data does
not guarantee that data will become useful unless it
is properly organized.
What is coding techniques?
Now data and ledgers are organized logically using
this coding techniques. We used codes to
systematically assigned a number.
Four Coding Conventions
1. Sequence code – pre-numbered. Items are
numbered consecutively to account all the items.
Kapag may gap this means missing item.
2. Block code – used to reserve a data for specific
category.
3. Group code – there are 2 or more subgroups
used in conjunction with the block codes. Used
to sort, summarize, and retrieve information
from one or more sub codes.
4. Mnemonic code – consist of letters or numbers.
Coding System Techniques
 Be consistent with its intended use, which
requires that the code designer determine
desired system outputs prior to selecting the
code.
 Allow for growth. For example, don’t use a
three-digit employee code for a fast growing
company with 950 employees.
 Be as simple as possible to minimize costs,
facilitate memorization and interpretation, and
ensure employee acceptance.
Audit Trail
− Traceable past of a transaction through a data
processing system from the point of origin to FS
which is the final output or final output to the
origin
− It is used to check the accuracy and validity of
general ledger posting
− From subsidiary ledger, you can go back directly
to the source document which is the sales
journal
 PQ = purchase quotation - not required since it
Master File and Transaction File
depends on the company.
Purchase Order - made by secondary player of  Master file, it is synonymous to ledger in a
supply chain = procurement (purchasing manual accounting system. It is cumulative
department) therefore it is permanent.
Good Receipt PO – the warehouse department
A/P Invoice – accounting department, particularly  Inventory – inventory master file
A/P department.
Outgoing Department – finance department.  PPE – properties or equipment master
file
Sales
 A/R – customer master file
Sales quotation at sales order - katumbas is
purchase order  A/P – vendor master file.

Delivery - katumbas is GPPO These master file are frequently being

periodically updated to record addition and
A/R invoice - A/P invoice removal of items from the master file of
records. So there is a deletion. Periodically new
Incoming Payment – outgoing
records are being added.

 Transaction file is like a journal. These are

Entity is something about which information is ford??,
such as inventory, employee, or customers.
Attributes. Each entity has the same attributes or
characters of interest or properties stored in the
database. Examples:
 Name
 Code
 Pay rate
 Address
 SS number
 Department
Fields. The portion of a data record in which the data
values for each attribute are stored. It is where you
record or where attributes are being recorded or
stored.
Records. The field containing the data about the
attributes constitute a record. Each column represents
different record
 Column – records
 Rows – attributes
Data Value. It is the amount of the record or the value
of the record. Each intersecting row and column is the
field with a record. The actual value stored in the value
is the data value.
temporary files. Meaning this files or the files
may not be needed beyond the current fiscal
period unlike the master files that the files or
info can exist across fiscal period.
DATA PROCESSING
Four types of processing (CRUD):
Creating new records (e.g., adding a customer)
Reading existing data – Includes processes like
viewing the data. So basically its more of
retrieving data.
Updating previous record or data - When we
update the records, we want to make our
databases, our master files as accurate and as
current as possible.
Deleting data
Note: Data processing can be batch processed (e.g.,
post records at the end of the business day) or in real-
time (process as it occurs)
DATA OUTPUT
The data stored in the database files can be viewed
o Online (soft copy)
o Printed out (hard copy)
 c) Inventory management
d) Inspection of inventory
 Document - e.g. sales invoice e) Warehouse management
 Report - e.g.: monthly sales report f) disbursement in the form of commission of
agent
In general, a control mechanism. It is used to
control the operating activities of the - Purchasing – purchases/ disbursement
organization. cycle

 Query (question for specific information in a a) Purchasing receipts

database - e.g.: What division had the most
sales for the month?)
Query are raw data. We actually dig the
information directly from the database. A user
enters a request for a specific piece of
information using the software such as SQL.
b) Inspection of inventory - warehouse quality
inspection (non financial in nature)
c) Receipts of inventory
d) Warehouse management
e) disbursement as to payment of liability
- Financial Reporting

MS SQL is a one of a software use in creating a) General ledger reporting

query. b) Financial reporting systems
c) Account receivable
d) Sales ledger
e) Customer file/ master data
ENTERPRISE RESOURCE PLANNING STSTEMs f) Account payable
Integrates activities from the entire organization g) Vendor 
h) Fixed asset registry
- Production or manufacturing. i) Budgeting
j) Cash management - maintain cash for
a. Engineering  operation
b. Production scheduling k) Preparation of managerial reports
c. Billing of materials l) Financial statement
d. Work in progress - financial but gano ba
kadami  Opportunities - administrative
e. Work flow management Business partner - customer and vendor
f. Quality control Banking - incoming and outgoing payment
g. Cost management
h. Manufacturing processes Advantages of ERP system
i. Projects in case of job order costing system - Integrated enterprise-wide allowing for better
flow of the information as it’s stored in a
- Payroll – human resource centralized database and can be accessed by
various departments which also improves
a. hiring customer service.
b. job specifications  - Data captured once (i.e., no longer need sales
c. Payroll to enter data about a customer and then
d. Employee benefits accounting to enter same customer data for
e. Attendance - time in time out invoicing) – minimize redundancy
f. Benefit compensation - Improve access of control of the data through
g. Government reporting security settings - Kasi if you are only
responsible for purchase order, then the
module or your access will only be limited to a
- Sales – part of revenue cycle.
purchase order.
a) Sales order entry - Standardization of procedures and reports
b) Shipment of inventory
Disadvantage of ERP system
- Costly – license

- Significant amount of time to implement

- Complex

- User resistance (learning new things is

sometimes hard for employees)