XXIII. AUTOMATION OF AAA ACCOUNTING SYSTEMS

A computer on every desk is still in the future, but with every passing day the age of automation dawns brighter. A recent article by Joel Makower summed up the situation well:

"Unless you've been sequestered in your office with the shades drawn and the phone unplugged during the past few years, you already know that computers have escaped from the computer room and are invading the secretarial pool and the executive suite. They travel in briefcases and speak English. In short, they are becoming as ubiquitous in the world of American executives as paper clips and perquisites.

"The message is ever present. Business computers are now advertised on TV between innings of baseball games. Business computers are touted in Time and TV Guide. They may be ordered by mail or carried home in shopping bags from any of a hundred or more catalog houses or department storesand, of course, from any of the growing number of computer boutiques sprouting up in suburban shopping malls and on downtown thoroughfares."*

Like the Martians, the

Martians, the micros are coming. In fact, they are here already. Chances are, AAA staff have computer chips on their wrists, a couple in their cars, several in their TVs, perhaps one in their food processors. It is getting easier and cheaper to automate and much of the conventional wisdom about the costs of data storage is going by the boards.

Telecommunication dishes are growing in backyards and, in the near future, will carry a lot more than movies. Moving data from one place to another is getting cheaper, faster, more accurate, and easier.

With micros comes a big drop in equipment costs and increased transportability. Word processing personnel are working from home now, over telephone lines to the office printer. Why not think about doing accounting and bookkeeping after hours in a similar way?

More and more social service program managers are turning to computers to assist in accounting and financial management. Yet many managers are uninformed about the advantages and disadvantages of automation and do not know how to

Makower, Joel, "Computers: The Executive Generation," UNITED, Vol. 26, No. 5; June, 1982 (United Magazine, New York, N.Y.), pp. 91-108.

select systems to meet their needs. This Chapter sheds a ray of light on automation for AAAs. It defines data processing, provides criteria for assessing automation alternatives, explains the major data-processing options, and introduces a straightforward strategy for selecting and implementing an automation option.

1. WHAT IS DATA PROCESSING AND HOW DOES IT RELATE TO AAA MANAGEMENT?

Whether formal or not, every AAA already has a data processing "system" made up of five separate steps:

Data Origination
Data Input

Data Manipulation
Report Output

Information Storage

Exhibit XXIII-1 overviews these steps and shows the process of receiving an invoice, inputting it to the accounts payable journal, adding it to all other accounts payable to produce an accrual basis expense report, and then maintaining the accounts payable file until the expense is paid. Each step may be accomplished through manual, semi-automated, or fully automated methods depending on the size of the AAA and its data processing requirements. In any case the objective is to complete each step in the quickest, most accurate, and most cost-effective

The first step in data processing requires capturing data about an event on a source document. This step is rarely changed by automation. That is-and this point is stressed--there is no way to avoid recording the financial transaction or service activity on a source document. However, the amount of information recorded for each event may be affected by the processing approach. For example, each data item can be captured once and then retrieved for repeated use; redundant data entry can be eliminated.

Input simply means that data recorded on source documents are entered into an information (accounting) system. This input step can be accomplished by manual, partially automated, or fully automated means. To illustrate, consider two methods available for inputting data; each example represents an extreme on a continuum:

Manual Input-Input into a manual system is accomplished simply by people, paper, and pencils. Input data are derived from source documents. The input device used to record the transactions is an ordinary pencil, as indicated in Exhibit XXIII-2. Once data are input into the system (e.g., the expense ledger) they are available for processing during later steps.