PROJECT BACKGROUND

INTRODUCTION

An airport is a location with facilities for commercial aviation flights to take off and land.
Airports often have facilities to store and maintain aircraft, and a control tower. An airport consists of a
landing area, which comprises an aerially accessible open space including at least one operationally
active surface such as a runway for a plane to take off or a helipad, and often includes adjacent utility
buildings such as control towers, hangars and terminals. Larger airports may have fixed base operator
services, airport aprons, air traffic control centers, passenger facilities such as restaurants and lounges
and emergency services.
As we all know, airport is the one major infrastructure in the city. As it becomes bigger, it also
becomes complex. It is hard to trail all the transaction of different areas in it. But with the help of good
accounting system and internal control system, transaction can be done and can be trail easily.
Information technology is present in most accounting offices these days via computers, printers
and other equipment. An intrinsic part of financial processes, technology is often taken for granted in
accounting offices. For instance, you can go online and check your cash balance in the bank when you
wish, or you can upload journal entries and not think twice about them. Every accountant knows that
accounting is the language of business. That language has gone through many changes throughout the
ages. But through all the changes accounting technology has always played a part in making the
accountants job just a little easier. As our knowledge of technology increased so has the accountants
ability to analyze statistical values. Technology advancements have enhanced the accountants ability to
interpret data efficiently and effectively. He/she now has the ability to interpret the language of
business with such ease that the accountant has become a corporations most trusted business advisor.

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One who adapts this evolution are those who engage in airline industry, airports operate by
providing a service by transporting the passengers with a safe trip towards other places. In many ways, a
modern airport operates like a city. A governing body provides strategic direction and oversees day-today management. Waste removal crews collect trash from airport facilities and airplanes. Police and fire
squads protect life and property. And various municipal-like departments handle administrative duties,
ranging from human resources and public relations to legal and finance.
This paper contains a companys Accounting Information System specifically Financial Reporting
System Design that contains transaction, operation and processes that is engage in airline industry,
airports operate by providing a service by transporting the passengers with a safe trip towards other
places. In many ways, a modern airport operates like a city. A governing body provides strategic
direction and oversees day-today management. Waste removal crews collect trash from airport facilities
and airplanes. Police and fire squads protect life and property. And various municipal-like departments
handle administrative duties, ranging from human resources and public relations to legal and finance.

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NATURE OF OPERATION

Aviation companies depend on their revenues on its daily operations. Along with the other
departments like human resources management, sales, marketing, information system, have also been
very useful in the financial section in the aviation sector. Aeronautical billing system handles airport
profits, Air traffic control billing, Aeronautical invoicing system involving cash and credit invoicing. And
finally Ledger system which contains all the information about sales and purchase ledger and nominal
ledger.
In business, there are four types of nature of operation. These four types are service,
merchandising, manufacturing and financial service. A service company provides services to their clients
for a fee. A merchandising company buys goods which are available for sale. They add value to it, and
then sell them to customers with the added value. A manufacturing company buys the materials,
converts them into products then sell these products to customers. While a financial services companies
deal in services related to money.

Service firms comprise the simplest form of business activity. They provide their customers or
clients with a service for which they charge a fee. Service firms accounting information systems track
revenues and expenses only- they do not need to track inventory information since service firms do not
have inventory.

An airport is a complex of runways and buildings for the takeoff, landing, and maintenance of
civil aircraft, with facilities for passengers operate by providing a service by transporting the passengers
with a safe trip towards other places. Companies in this industry operate airports for commercial and
general aviation and provide support services such as air traffic control, aircraft fueling and

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maintenance, baggage and cargo handling, and rental of hangar space. It is a service firm. They provide
their customers or clients with a service for which they charge a fee.

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THE ACCOUNTING SYSTEM

Transaction & Service Documents

Airports contract to airlines for the terms and fees regarding the use of the terminal, landing
area and other services that the airline companies want to avail. This may include hangar services and
others. They also make contract to cargo agents for the terms and fees of transferring items from airport
to airport. They also make contract on entities that uses land which belongs to the airport. They also
make contract to concessionaires and other entities who would like to get a space in the airport for
selling their products or services like restaurants. Other services which include in-flight catering, apron/
tie down services, supplies sales and fuel selling are also available.

In AIS, the chief concerns in the data collection process are accuracy, timeliness, and costeffectiveness. Source documents help manage the flow of accounting data in several ways. First, they
dictate the kinds of data to be collected and help ensure legibility, consistency, and accuracy in the
recording of data. Second, they encourage the completeness of accounting data because these source
documents clearly enumerate the information required. Third, they serve as distributors of information
because individuals or departments needing the information receive copies of the same form. And
finally, a source document helps to establish the authenticity of data.

Processes

Ticket stock control is the process that maintains details of the current status of accountable
documents, from the time they leave the printer. It will require stock to be received by the head office
or other distribution center, and will allow each distribution center to re-distribute to General Sales
Agents, offices and agencies. A link to the sales reporting process will confirm whether the sales point is
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correctly reporting the sale, or whether there is an input error, or stock control error. Identification of
the stockholder for a flown coupon for which no sale has been reported assists in attributing a
temporary value to the coupon for management reporting, and enables the sales point to be chased
should a sale not be reported within an acceptable time. A link to the ticket blacklist service will allow
logging and reporting of missing or stolen stock.

Sales input covers the capture of sales and refund reports, whether as manual returns, or as
tape or file loads from BSPs and in-house ticketing systems. Each will be checked for errors and
inconsistencies, such as bad data, out-of-sequence tickets and internal/batch total errors. Anything that
will fail the next process input will be corrected here. The system may well incorporate, or link to, an
image database, allowing ticket records to be processed, stored and retrieved at will. This aids any
validation, enhancement and correction activities in any process, which might otherwise require access
to the paper ticket or to a printed facsimile. Refunds and exchanges will be recorded, and the uplifted
coupon data passed to the Uplifts process to be accounted for and cleared from the database.
Additionally TCN data for the airlines sales may be received and processed to assist with valuation of
flown coupons for which no sale has been reported. Data for other airline sales containing one of your
own segments may also be stored, to allow for automated generation of billing values to that airline, or
for use as part of the IATA First and Final Billing process.

Sales evaluation, The data passed from Sales Input will be prorated to obtain accurate values for
fare, commissions and discounts at a coupon level, and individual values for each will be passed to the
forward sales (UTR) account and other suspense accounts to be held until each coupon is used. The final
data will be passed to a core database, where all the tickets details will be stored, and records of usage
maintained. The proration module may be either an internal function of the sales evaluation process, a

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separate module or process, or external service provided by a third-party though upload and download
of data and results.

Revenue evaluation process varies, depending on whether the system is First-coupon-based or

Sales-based. Briefly, in both a sales-based and first-coupon-based approach, if there are values for fare,
commissions, discounts and taxes that have been through the sales process, these will be used for
accounting. If there is no sales record available, the first-coupon-based system will require the capture
of a dummy sales record, using the information on the flight coupon. This may or may not be used for
accounting. The sales-based system will allocate a calculated value based on internal logic, equivalent
historical data and other stored information, and this will be used for management reporting. The
accounting will not take place until the sales record has been processed.

Outward billing values any coupons issued by another airline, together with any taxes or
Interline Service Charge (ISC) applicable, and creates the interline bill to recover the value from that
airline. There is a formal structure of invoice documents (Forms 1, 2, 3, A, B, etc.). Bills can be sent as
paper invoices, or as IDEC data files. Billing can be Non-sample (i.e. each coupon is factually evaluated,
ideally automatically using TCN data and a prorate module, but possibly by manual calculation), or
Sample (i.e. A defined percentage of the total interline billing will be factually evaluated, and then
scaled-up to a value that represents the total volume of coupons). It can also be First & Final, a new
approach which uses standard valuations for tickets based on Neutral Fare Proration (NFP), and for
which there is no interline error or rejection process. For non-sample interline billing each coupon
valued is added to a bill in an industry standard format, and this is sent either directly to the other
carrier or to an industry Clearing House. For Sample interline billing, a provisional invoice is created,
using preliminary valuations which are always automated. This is dispatched as above. For First & Final
interline billing, the TCN record for the coupon will have an NFP value attached. This is used for billing
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without further validation or amendment. When the bill is dispatched (using IDEC), the service confirms
to the receiving airline that the correct prorate value has been used. The airline then accepts this billing
without further checking. If either of the other interline billing methods have been used, the outward
bill may also incorporate any Rejections generated from the Inward Billing process.

Inward register starts with a register that notes the invoices that are expected, and logs them
and their values when they arrive. This is necessary as the Clearing House process will have already
deducted the value of the bill from the value of any outgoing invoices. In effect, it has already been paid,
and the subsequent validations are to see whether any recovery is required.

Inward billing, the invoice itself is captured either manually, or by loading the IDEC file. In the
case of non-sample, the system will then compare the incoming-billed values for fare, taxes and ISC with
the data on the coupon database. If the billed values are the same as, or lower than, the stored values,
the billing will be accepted, and adjusted account postings made. If the billed value is higher than the
stored value, the item will be flagged for review and re-prorated. If the difference is not accepted, and
the value is outside the pre-assigned tolerance level, a Rejection is initiated. Equally, incoming interline
billing rejects from the other airline need to be entered, reviewed, and either accepted or rejected a
further time if there is still no agreement. In the case of Sample, the system must select all coupons
from the incoming invoice which match the sample digits published by IATA, and these must be factually
evaluated with a high degree of accuracy. An adjustment is agreed with the other airline after a
preliminary evaluation of the tickets (the process of Sampling is covered fully in the IATA Revenue
Accounting Manual, section B1). For a First & Final billing, the only check is that the incoming IDEC item
does not have an error code against it, which indicates that the First and Final Billing Service has
identified that the value has been manually amended, and can therefore be rejected if unacceptable.

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After all the transactions are inputted properly on the system journal, this information will
automatically transfer to the general ledger record. The general ledger is used in the preparation of
financial reports. Because of this automatic function, time in transferring transactions will be saved.
Another automated part is the producing of report. By only clicking the type of report the entity wants
to see or produce, it will automatically show a prepared and complete report that is ready for printing.

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Flowcharts

The Airport System

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Flow of Documents

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Reports
The outputs of AIS are the reports to management, reports to investors and creditors, files that
retain transaction data and files that retain current data about accounts. These reports are the tools
managers use to make decisions. Furthermore, most accounting data collected by an organization
ultimately appear on some type of internal and/or external report.
The reports needed by airport companies that this system can produce are the balance sheet,
statement of revenue and expenses, statement of changes in net position, statement of cash flows, and
notes to financial statement.

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THE CONTROLS
General Controls

Management Practice Controls - In a computerized AIS, management should initiate a

policy for controls over changes to systems and new system development processes.
Asset Accountability Controls - ensure that systems are established for the coordination of, and accountability for, activities within the institution to ensure the
responsible use of public resources.
Documentation Controls - consists of procedures manuals and other means of
describing the AIS and its operations, such as program flowcharts and organizational
charts.
Information Center Operations Controls includes proper supervision over computer
operators and preventive diagnostic programs to monitor hardware and software
functions.
Access Controls - way of limiting access to a system or to physical or virtual resources. In
computing, access control is a process by which users are granted access and certain
privileges to systems, resources or information.
Authorization Controls - specifying access rights to resources related to information
security and computer security in general and to access control in particular.
Organizational or Personnel Controls - establishing and maintaining authority over and
throughout an enterprise.

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Application Controls

Authorization Controls - Authorizations enforce managements rules with respect to

transactions flowing into the general ledger system. It assure that transactions are valid
and proper, outputs are not incorrect due to invalid inputs, and assets are better
protected.
Input Controls - attempt to ensure the validity, accuracy, and completeness of the data
entered into an AIS.
Processing Controls - help assure that data are processed accurately and completely,
that no unauthorized transactions are included, that the proper files and programs are
included, and that all transactions can be easily traced.

For the sake of the confidentiality of the entitys information or documents found in the system,
the system has this unique feature of requiring username and password upon printing any file from the
system so that any documents that are printed can be traced in case of unfavorable situations.

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SUMMARY

Because of the development of new technology, manual operations are now slowly being killed
by computer-based operations. As such, this paper contains a computer-based financial reporting
system design for airport which can aid in more easy and convenient way in making their financial
reports. This system will not be effective if not used properly. The process of the proposed financial
reporting system design including its flowcharts is presented in this paper. Another factor that can lead
to the success of the system is the controls that need to be followed accordingly.
One who adapts this evolution is those who engage in airport industries operate by providing a
service by transporting the passengers with a safe trip towards other places. Information systems have
been very useful in airports. The various information systems used by the finance and accounting
department in airport industry includes Ticket Stock Control that maintains details of the current status
of accountable documents, Sales Input that covers the capture of sales and refund reports, Coupon
Uplift that collects and input of coupons or coupon records for every passenger that has flown,
Management Reporting Interface supply a range of accounting and management information reports,
and provide data feeds to other systems and departments as required, such as financial systems, MIS
and EIS systems, revenue and yield management, sales management, and so on.

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