Fourteenth Edition, Global Edition

• Copyright © 2018 Pearson Education, Ltd. All Rights Reserved

AIS615 CHAPTER 2
Overview of Transaction Processing and
Enterprise Resource Planning Systems
LECTURED BY,
Nur Afiqah
 LEARNING OUTCOMES

Describe the data processing cycle

used to process transactions,
including how data is input, stored,
and processed and how information is
outputted.
WHAT YOU
SHOULD
KNOW???
Discuss how organizations use enterprise
resource planning (ERP) systems to
process transactions and provide
information.
DATA PROCESSING CYCLE
 DATA INPUT

Capture transaction data

01
Steps in
Processing triggered by a business
Ensure company Input are: activity (event).
policies are followed
(e.g., approval of
transaction). 03 02 Make sure captured
n
Steps i g
Steps in data are accurate
in Process
Process re: i
Input a ng and complete.
Input a re:
 DATA CAPTURE

INFORMATION COLLECTED FOR AN ACTIVITY INCLUDES;

• Activity of interest (e.g., sale)
• Resources affected (e.g., inventory and cash)
• People who participated in the activity (e.g., customer and employee)

SOURCE OF INFORMATION
Information comes from source documents.
• Paper source documents
• Turnaround documents
• Source data automation (captured data from machines,
e.g., Point of Sale scanners at grocery store)
 DATA STORAGE
Important to understand how data is organized

Note: With the following, one can trace the path of the
transaction (audit trail)

CHART OF ACCOUNTS SUBSIDIARY LEDGER

Coding schemas that are well 04 01 (e.g., Accounts receivable)
thought out to anticipate
management needs are most
efficient and effective

TRANSACTION JOURNALS GENERAL LEDGER

(e.g., Sales) 02 02
 CODING TECHNIQUE
SEQUENCE CODES
items numbered consecutively to account for all items (i.e., prenumbered
forms)

BLOCK CODES
blocks of numbers reserved for specific categories of data (i.e., product
numbers that start with a 2 are refrigerators)
CODING
TECHNIQUE
GROUP CODES
two or more subgroups of digits used to code items (i.e., car vin #’s)

MNEMONIC CODES
letters and numbers interspersed to identify an item (i.e. Dry300W05 is low
end (300), white (W) dryer (DRY) made by Sears (05))
AUDIT TRAIL

Audit trail for

Invoice #156 for
$1,876.50 sold to
KDR Builders
 COMPUTER-BASED STORAGE
Data is stored in master files or transaction files.
 DATA PROCESSING

Creating new records (e.g., adding a customer)

Four types of
processing (CRUD):
Reading existing data
Data processing can be batch
processed (e.g., post records at
Updating previous record or data the end of the business day) or
in real-time (process as it
occurs).
Deleting data
 INFORMATION OUTPUT
PRINTED OUT (HARD COPY)
• Document (e.g., sales invoice)
• Report (e.g., monthly sales report)
• Query (question for specific information
in a database, e.g., Which division had The data stored
the most sales for the month?)
in the database
files can be
viewed;
ONLINE (SOFT COPY)
ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM

Integrates activities from the entire organization

REVENUE EXPENDITURE PRODUCTION HR GENERAL

CYCLE CYCLE CYCLE PAYROLL LEDGER &
CYCLE REPORTING
SYSTEM
 ADVANTAGES AND DISADVANTAGES
OF ERP SYSTEM
ADVANTAGES DISADVANTAGES
• Integrated enterprise-wide single view of
the organization’s data which streamlines • Costly
the flow of information • Significant amount of time to
• Data captured once (i.e., no longer need implement
sales to enter data about a customer and • Customizing or standardizing
then accounting to enter same customer a business process
data for invoicing) • Complexity
• User resistance (learning new
• Greater visibility and monitoring
things is sometimes hard for
capabilities for management
employees)
• Improve access of control of the data
through security settings
• Standardization of procedures and reports
• Improves customer service
• Increases productivity through automation
 KEY TERMS
www.yourcompany.com

• Data processing cycle • Entity

• Source documents • Attributes
• Turnaround documents • Field
• Record
• Source data automation

THANK
• Data value
• General ledger
• File
• Subsidiary ledger • Master file
•
•
Control account
Coding
• Transaction file
• Database
• Batch processing
YOU
• Sequence code
•
• Online, real-time processing
Block code
• Document
• Group code
• Report
• Mnemonic code • Query
• Chart of accounts • Enterprise resource planning (ERP) system
• Specialized journal 2
• Audit trail