Page 97 - Accounting Information Systems

68 PART I Overview of Accounting Information Systems

FI GU RE
2-27 RECORD LAYOUT DIAGRAM FOR CUSTOMER FILE

Customer File

Key
Customer Customer Street City State Zip Code Credit Limit
Number Name Address

configuration choices on a variety of considerations. Table 2-1 summarizes some of the distinguishing
characteristics of batch and real-time processing that feature prominently in these decisions.

DIFFERENCES BETWEEN BATCH AND REAL-TIME SYSTEMS
Information Time Frame
Batch systems assemble transactions into groups for processing. Under this approach, there is always a
time lag between the point at which an economic event occurs and the point at which it is reflected in the
firm’s accounts. The amount of lag depends on the frequency of batch processing. Time lags can range
from minutes to weeks. Payroll processing is an example of a typical batch system. The economic
events—the application of employee labor—occur continuously throughout the pay period. At the end of
the period, the paychecks for all employees are prepared together as a batch.
Real-time systems process transactions individually at the moment the event occurs. Because records
are not grouped into batches, there are no time lags between occurrence and recording. An example of
real-time processing is an airline reservations system, which processes requests for services from one
traveler at a time while he or she waits.
Resources
Generally, batch systems demand fewer organizational resources (such as programming costs, computer
time, and user training) than real-time systems. For example, batch systems can use sequential files stored
on magnetic tape. Real-time systems use direct access files that require more expensive storage devices,
such as magnetic disks. In practice, however, these cost differentials are disappearing. As a result, busi-
ness organizations typically use magnetic disks for both batch and real-time processing.
The most significant resource differentials are in the areas of systems development (programming)
and computer operations. As batch systems are generally simpler than their real-time counterparts, they

TAB L E
CHARACTERISTIC DIFFERENCES BETWEEN BATCH AND REAL-TIME PROCESSING
2-1

Data Processing Methods
Distinguishing Feature Batch Real-Time
Information time frame Lag exists between time when the economic event Processing takes place when the economic event
occurs and when it is recorded. occurs.
Resources Generally, fewer resources (e.g., hardware, More resources are required than for batch
programming, training) are required. processing.
Operational efficiency Certain records are processed after the event to All records pertaining to the event are processed
avoid operational delays. immediately.