Transaction Processing and

Management Reporting System

Chapter 9

Management Information System

Framework
Management

Information System
Framework consist of: Transaction

Processing Systems
Management Reporting Systems
Decision Support Systems
Office Information Systems

Management Information System

Framework
Transaction

Processing Systems

Transaction Processing Systems supports the

processing of a firms business transaction for smooth
running by automating the processing of huge amount
of paperwork. For example
TPS of a departmental store

Customer purchases > prepare billing > order

merchandise from supplier

Management

Reporting Systems

Management Reporting Systems provides predefined

type of information to management for structured type of
decisions, mainly focus to effective information.

Management Information System

Framework
Decision

Support Systems

Decision

Support Systems enables managers

to develop information in the manner that best
suits the decision that they are currently trying
to make.

Office

Information Systems

Office

Information System referred to wide

variety of tools that enhance office productivity,
efficiency and effectiveness.

Reasons for Recording Transactions

To provide

information needed by employees to

transact business and perform their job
functions.
To collect information that managers need to
make informed decisions.
To provide information for customers, suppliers
business partners and others who participates in
the transaction.
To create records called audit trials that auditors
use to verify corporate information reported by
the company.

Examples of Transaction Processing

Systems

Point of sales systems

Order Entry System

System that move , store and track inventory complement point of

sale and order entry systems

Reservation system

Record and process an order for example , mail order distributor,

pizza store, newspaper advertising departments

Distribution and Logistic system

Records the sale of a product or service and updates company

records

Airlines, Hotels and railways etc.

Purchasing and receiving systems

Document transaction between company and its suppliers.

Effective Transaction Processing Systems

Developing

fast system
Ensuring system reliability
Accessible system
Secure system

The Nature of Transaction Processing

Computer

based Transaction Processing system

considered the most important computer
application.
Transaction Processing Function

Book keeping :

General accepted financial accounting principles

Issuance of documents :
payment

checks, invoices, statements, reminders

Control reports:
reports

that are produced byproduct of transaction. Edit

reports , error reports

Role of Information Technology In

Transaction Processing
To most

business, manual system present

numerous problems that are solvable by
computers: Error

level
Temporary and permanent loss of data
Labor intensive
Poor service
Poor response

Transaction Processing Cycle

Most Transaction Processing cycle use five steps process:Data Entry (capturing and transcribing)

Actual processing of transaction or updating master file

Batch processing
Real-time processing

Document and report generation

Manual data and electronic data

Information documents
Turnaround documents
Action documents
Accounting statements
Control listing (transaction logs)
Edit reports

Inquiry processing

Online Interrogation

Transaction Processing Subsystems

Payrolls : produce paychecks of employee , usually a batch

operation

Order entry

Must produce data for tax purpose, insurance, union dues

Interface with general ledger, balance sheet
Interface with bank
Customer order may come from variety of sources fax phone etc.
Product number and description must be checked
Accepted orders and rejected orders

Inventory

Quantity of products/ services available

Management need to watch which product is selling high or low
Scheduling for production
Shifting inventory handling cost to suppliers
Reducing inventory

Transaction Processing Subsystems

Invoicing/packing slips/ statement for account receivable

Shipping

Receive, inspect or accept or reject goods

Accounts payable

Central purchasing department

Purchase order

Receiving

Customer purchase record, payment, outstanding balances

Purchasing

Packaging, mode of shipping, status of shipped goods

Accounts receivable

Products in shipment, prices,

Performs cash management activities

General ledger

Integrate transaction data

Management Reporting System

Management Reporting Systems provides predefined

type of information to management, which uses them
for management planning and control function.
Properties of Management reporting System

Support structured and semi-structured decisions, at the middle

and lower level of management.
Provide fixed type of information , in an established format
Often implement with huge hardcopy reports
Usually consist of internal operational data , rather than the
external environmental data.
Usually more concerned with data about the past than data
relating to the future.
Often oriented to summary and exception reports