Sub-systems of an on-line TP system

Overview

Most transactions processing systems (TPS) are made up of a variety of sub-systems, such as Debtors (accounts receivable), Invoicing, Order Entry, Payroll, Creditors.

These sub-systems are further made up of sub-modules. Consider the case of a Debtors system. This is made up (amongst other things) of Debtor master-file entry, transaction entry, Statement printing and Debtor inquiry. Obviously, some of these activities are best suited to interactive on-line and others to batch processing.

Debtors (Accounts receivable)

Exercise 1:

Indicate which options are best suited to batch processing and which to on-line real time processing; Give a reason.

Answers:

Payroll

Exercise 2:

Indicate which options are best suited to batch processing and which to on-line real time processing; Give a reason.

Answers:

Main points

ONLINE REAL-TIME PROCESS

Information needed immediately
Data is updated by the system frequently
An Inquiry is the best example

BATCH PROCESS

Data changes infrequently
Information is not time critical
Infeasible to enter data on-line (eg. multiple terminals at point of sale may not be cost justifiable).

Loading Transactions is the best example

If you analyse the various sub-systems, you will notice that Debtors is best suited to a combination of on-line interactive and batch processing, whereas payroll is best suited to a batch processing system.

Sub-system suitability

Payroll

Best suited to Batch Processing since most of the data must be collected and collated first, and reports such as pay-slips, tax returns etc., are generated for all employees rather than just one.

Debtors

(Accounts receivable)
Suited to a mix of Batch Processing, and On-line Processing, since most of the transaction data must be collected and collated first, while Debtor inquiry is desirable to be on-line.

Order Entry / Invoicing

Suited to On-line Processing, since stock levels need to be regularly monitored.

Creditors

(Accounts Payable)
Suited to Batch Processing, since transaction data must be collected and collated first, and cheque runs need to be carefully monitored

Job Costing

Suited to On-line Processing, since ready access to prices and materials is required.

Answers

Exercise 1: Debtor's (Account Receivable)

Batch : Load transactions
Since transactions may arrive by mail, or the firm may have one computer and several points of sale.

Real Time: Debtor Inquiry/Listing
Since a client may wish to pay up their account, as in the case of leaving the district or country.

Exercise 2: Payroll

Batch : Load transactions
Since pay-sheets tend to be accumulated by the week, each pay-sheet is batched at the end of each week, or pay period.

Real Time: Employee Inquiry/Listing
Since an employee may wish to inquire as to the status of their salary or wages, such as for pay rates, allowance totals, etc.