Accounting Information Systems: The Processes and Controls, 2nd Edition

PROCESSING ACCOUNTING DATA (STUDY OBJECTIVE 7)

After accounting information has been input into the accounting system, it must be processed. Processing accounting data involves calculations, classification, summarization, and consolidation. In manual accounting systems, this processing occurs through the established manual methods and the recording, posting, and closing steps in the journals and ledgers. Automated processing can be accomplished by batch processing or online and real-time processing. These methods are described next.

BATCH PROCESSING

Batch processing requires that all similar transactions are grouped together for a specified time, and then this group of transactions is processed together as a batch. Batch processing is best suited to applications having large volumes of similar transactions that can be processed at regular intervals. Payroll processing is a good example of a system that is well suited to batch processing. All time cards can be grouped together for a two-week period, for example, and all payroll processing then takes place on the entire set, or batch, of time cards.

Many legacy systems use batch processing to handle large volumes of routine transactions. As described in Chapter 1, batch processing is best suited for business processes where the transactions are stored in sequential access files. The business processes that are often batch-oriented in legacy systems are payroll, accounts payable, and accounts receivable. These processes and legacy ...