How Goss & Associates Transformed Revenue Accounting Through Automation

Goss & Associates, LLC
Revenue Accounting
Success Story

2Goss & Associates, LLC
AIRLINE OVERVIEW
Please visit our Web Site: Goss & Associates, LLC

 Started operations in the 1960’sStarted operations in the 1960’s
 Based in the PacificBased in the Pacific
 Served 25 CitiesServed 25 Cities
 1,500+ Employees1,500+ Employees

Fleet
 Operated 29 AircraftOperated 29 Aircraft
 Aircraft mix included B747, DC10, B757, B727 &Aircraft mix included B747, DC10, B757, B727 &
B737B737

AIRLINE’S
REVENUE ACCOUNTING
OVERVIEW

 Annually the airline processed an average ofAnnually the airline processed an average of
- 2.5 million flight coupons- 2.5 million flight coupons
- 1.5 million audit coupon- 1.5 million audit coupon
 Five Computer Reservation Systems (CRS)Five Computer Reservation Systems (CRS)
processed 95% of the airline’s salesprocessed 95% of the airline’s sales
 Flight coupons were used an average of 7 to 12Flight coupons were used an average of 7 to 12
days after saledays after sale

 Airline used a sales based accounting processAirline used a sales based accounting process
 Airline had unprocessed sales backlog -12 plusAirline had unprocessed sales backlog -12 plus
monthsmonths
 At month end, the airline experienced unmatchedAt month end, the airline experienced unmatched
flight coupons ranging between 90% and 95%flight coupons ranging between 90% and 95%
 Airline’s revenue accounting balance sheetAirline’s revenue accounting balance sheet
accounts were not reconciledaccounts were not reconciled

 80% of airline’s revenue was net of both first and80% of airline’s revenue was net of both first and
second level commissionsecond level commission
– First level is defined as traditional commissionFirst level is defined as traditional commission
– Second level is defined as volume incentiveSecond level is defined as volume incentive
 Airline’s sales based process providedAirline’s sales based process provided couponcoupon
levellevel revenue informationrevenue information

PROBLEM DEFINITION

 Conflicting internal opinions regarding:Conflicting internal opinions regarding:
- Staff size- Staff size
- Automation- Automation
- Departmental management competency- Departmental management competency
 Needed independent expertise to:Needed independent expertise to:
- Evaluate current situation- Evaluate current situation
- Provide facts- Provide facts
- Recommend actions- Recommend actions

 Given their ticket volume, more process staff wasGiven their ticket volume, more process staff was
required to operate the current system:required to operate the current system:
– Maintain current volumesMaintain current volumes
– Audit sales to recover under collected salesAudit sales to recover under collected sales
– Audit to recover over paid commissionAudit to recover over paid commission
– Reconcile balance sheet accountsReconcile balance sheet accounts

 Long term, the airline needed to invest inLong term, the airline needed to invest in
automation to:automation to:
– Reduce staff and human errorsReduce staff and human errors
– Recover under collected sales through fare auditsRecover under collected sales through fare audits
– Recover over paid commission through auditsRecover over paid commission through audits
– Reconcile balance sheet accountsReconcile balance sheet accounts

 In addition, investment in automation was neededIn addition, investment in automation was needed
to:to:
– Improve commission trackingImprove commission tracking
– Simplify payment processSimplify payment process
– Take revenue data to segment levelTake revenue data to segment level

ACTION PLAN

 Eliminate BACKLOGS:Eliminate BACKLOGS:
– SalesSales
– Account ReconciliationAccount Reconciliation
 Invest in automationInvest in automation
 Reengineer revenue accounting processReengineer revenue accounting process

ELIMINATE BACKLOGS
Getting Revenue Accounting Current

 Outsourcing was used to:Outsourcing was used to:
– Maintain current revenue accounting processMaintain current revenue accounting process
– Eliminate sales processing BACKLOGSEliminate sales processing BACKLOGS
– Data enter unprocessed sales reportsData enter unprocessed sales reports
– Capture unprocessed BSP long sale filesCapture unprocessed BSP long sale files
– Account reconciliation using technical revenueAccount reconciliation using technical revenue
accounting experienceaccounting experience

AUTOMATE
Investing in Revenue Accounting

 Found aFound a Revenue Information SystemRevenue Information System that used all 5that used all 5
Computer Reservation Systems:Computer Reservation Systems:
– Audits fares and commissionsAudits fares and commissions
– Reduces staff requirementsReduces staff requirements
– Feeds revenue data to other systemsFeeds revenue data to other systems
– Receives data from other system providers like ATPCOReceives data from other system providers like ATPCO
and other airlinesand other airlines

PROCESS REENGINERING
Reinventing Revenue Accounting

 The reengineered revenue information processThe reengineered revenue information process
provided:provided:
– Current technical revenue accounting skillsCurrent technical revenue accounting skills
– Revenue AnalysisRevenue Analysis
– Efficient processing of documents and dataEfficient processing of documents and data
 Reduced process staff and increased analyticalReduced process staff and increased analytical
staffstaff

Revenue Accounting’s
Future

 Commit to constant vigilCommit to constant vigil
 Commitment to improve process automationCommitment to improve process automation
 Insure revenue accounting continues to be:Insure revenue accounting continues to be:
– Cost efficientCost efficient
– A complete information providerA complete information provider
– Never backloggedNever backlogged

Revenue Accounting
Success Story

How Goss & Associates Transformed Revenue Accounting Through Automation

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