revenue accounting success story
Post on 07-Jan-2016
33 Views
Preview:
DESCRIPTION
TRANSCRIPT
3
Goss & Associates, LLC
Started operations in the 1960’s
Based in the Pacific
Served 25 Cities
1,500+ Employees
4
Goss & Associates, LLC
Fleet
Operated 29 Aircraft
Aircraft mix included B747, DC10, B757, B727 & B737
5
Goss & Associates, LLC
AIRLINE’SREVENUE ACCOUNTING OVERVIEW
Please visit our Web Site: Goss & Associates, LLC
6
Goss & Associates, LLC
Annually the airline processed an average of - 2.5 million flight coupons
- 1.5 million audit coupon
Five Computer Reservation Systems (CRS)
processed 95% of the airline’s sales
Flight coupons were used an average of 7 to
12 days after sale
7
Goss & Associates, LLC
Airline used a sales based accounting process
Airline had unprocessed sales backlog -12
plus months
At month end, the airline experienced
unmatched flight coupons ranging between
90% and 95%
Airline’s revenue accounting balance sheet
accounts were not reconciled
8
Goss & Associates, LLC
80% of airline’s revenue was net of both first and second level commission First level is defined as traditional
commission Second level is defined as volume incentive
Airline’s sales based process provided coupon level revenue information
10
Goss & Associates, LLC
Conflicting internal opinions regarding:- Staff size - Automation- Departmental management competency
Needed independent expertise to:- Evaluate current situation- Provide facts- Recommend actions
11
Goss & Associates, LLC
Given their ticket volume, more process staff was required to operate the current system: Maintain current volumes Audit sales to recover under collected sales Audit to recover over paid commission Reconcile balance sheet accounts
12
Goss & Associates, LLC
Long term, the airline needed to invest in automation to:
Reduce staff and human errors Recover under collected sales through fare
audits Recover over paid commission through
audits Reconcile balance sheet accounts
13
Goss & Associates, LLC
In addition, investment in automation was needed to: Improve commission tracking Simplify payment process Take revenue data to segment level
15
Goss & Associates, LLC
Eliminate BACKLOGS: Sales Account Reconciliation
Invest in automation Reengineer revenue accounting
process
17
Goss & Associates, LLC
Outsourcing was used to: Maintain current revenue accounting
process Eliminate sales processing BACKLOGS Data enter unprocessed sales reports Capture unprocessed BSP long sale files Account reconciliation using technical
revenue accounting experience
19
Goss & Associates, LLC
Found a Revenue Information System that used all 5 Computer Reservation Systems: Audits fares and commissions Reduces staff requirements Feeds revenue data to other systems Receives data from other system providers
like ATPCO and other airlines
21
Goss & Associates, LLC
The reengineered revenue information process provided: Current technical revenue accounting skills Revenue Analysis Efficient processing of documents and data
Reduced process staff and increased analytical staff
22
Goss & Associates, LLC
Revenue Accounting’s Future
Please visit our Web Site: Goss & Associates, LLC
23
Goss & Associates, LLC
Commit to constant vigil
Commitment to improve process automation
Insure revenue accounting continues to be: Cost efficient A complete information provider Never backlogged
top related