4 - 1 Introduction to Data Processing

4 - 2 Introduction l This chapter presents the four stages of the data processing cycle. 1Data input 2Data storage 3Data processing 4Information output

4 - 3 Four Stages of the Data Processing Cycle Data processing Information output Data input Data storage

4 - 4 Data Input l The first step in the data processing cycle is data input. l During the data input stage, transaction data are captured and converted to machine- processible form. l Traditionally, transaction data has been captured on preprinted source documents. l What are some source documents?

4 - 5 Data Input – Source Documents – Purchase requisitions – Checks and remittances from customers – Customer orders

4 - 6 Data Input l How can data input accuracy and efficiency be improved? »Have a well-designed computer screen resembling that of source documents. »Have the system prompt the user to input all necessary data. »Use scanning devices instead of keying. »Have source data automation like ATMs.

4 - 7 Forms of Information Output l Information is presented in three forms: 1Documents 2Reports 3Responses to a query

4 - 8 Forms of Information Output l Documents are records of transactions or other company data. l What are some examples of documents? – checks and invoices transmitted to external parties – purchase requisitions used internally

4 - 9 Forms of Information Output l Reports are prepared for both internal and external users. l Internal users need reports to control operational activities, to make decisions, and design strategies for the business. l External users need reports to evaluate company profitability, or to comply with regulatory requirements.

Forms of Information Output l Some reports, such as financial statements and sales analyses, are produced on a regular basis. l Others are produced on an exception basis to call attention to unusual conditions.

Forms of Information Output l Response to queries: l To respond to problems and questions that need rapid action or answer, PCs or terminals are used to query the system. l Online forms are often used to display output

Purpose of Information Output l External users: »Financial statements are produced to meet stewardship requirements. »Income tax returns and 10-K filings with the Securities and Exchange Commission are produced to comply with legal requirements.

Purpose of Information Output l Internal users: »Budgets, sales forecasts, and projected cash flow statements are prepared for planning purposes. »Production and delivery schedules, open purchase orders, and inventory stock status reports are prepared to help effectively manage day-to-day operations.