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

DATA PROCESSING TECHNIQUES (STUDY OBJECTIVE 3)

In transaction processing systems, transactions are processed either in batches or one at a time. Batch processing occurs when similar transactions are grouped together, and that group is processed as a batch. A familiar example of batch processing is processing payroll checks. All time cards for the pay period are collected, and the resulting pay checks are processed and printed in a group, or batch. Accounts payable and accounts receivable transactions are often processed in batches. For example, payments to vendors are often processed in batches. The alternative to batch processing is real-time processing. Real-time processing occurs when transactions are processed immediately. This processing is interactive because the transaction is processed when it is entered.

When determining whether batch or real-time processing is appropriate, system professionals must consider response time, efficiency, complexity, control, and storage media. Batch systems have slow response times, because the transactions are not processed until the whole group is ready to be processed. Real-time systems have fast response times, because transactions are processed as entered. Batch processing is more efficient for a large volume of similar transactions. This is true for several reasons. First, persons who focus on gathering and processing similar types of transactions become efficient at handling those transactions. That is, they become more specialized. ...