Goss & Associates, LLC

Revenue Accounting Success Story

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Goss & Associates, LLC

AIRLINE OVERVIEW

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Goss & Associates, LLC

Started operations in the 1960’s

Based in the Pacific

Served 25 Cities

1,500+ Employees

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Goss & Associates, LLC

Fleet

Operated 29 Aircraft

Aircraft mix included B747, DC10, B757, B727 & B737

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Goss & Associates, LLC

AIRLINE’SREVENUE ACCOUNTING OVERVIEW

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Goss & Associates, LLC

Annually the airline processed an average of - 2.5 million flight coupons

- 1.5 million audit coupon

Five Computer Reservation Systems (CRS)

processed 95% of the airline’s sales

Flight coupons were used an average of 7 to

12 days after sale

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Goss & Associates, LLC

Airline used a sales based accounting process

Airline had unprocessed sales backlog -12

plus months

At month end, the airline experienced

unmatched flight coupons ranging between

90% and 95%

Airline’s revenue accounting balance sheet

accounts were not reconciled

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Goss & Associates, LLC

80% of airline’s revenue was net of both first and second level commission First level is defined as traditional

commission Second level is defined as volume incentive

Airline’s sales based process provided coupon level revenue information

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Goss & Associates, LLC

PROBLEM DEFINITION

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Goss & Associates, LLC

Conflicting internal opinions regarding:- Staff size - Automation- Departmental management competency

Needed independent expertise to:- Evaluate current situation- Provide facts- Recommend actions

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Goss & Associates, LLC

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

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Goss & Associates, LLC

Long term, the airline needed to invest in automation to:

Reduce staff and human errors Recover under collected sales through fare

audits Recover over paid commission through

audits Reconcile balance sheet accounts

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Goss & Associates, LLC

In addition, investment in automation was needed to: Improve commission tracking Simplify payment process Take revenue data to segment level

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Goss & Associates, LLC

ACTION PLAN

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Goss & Associates, LLC

Eliminate BACKLOGS: Sales Account Reconciliation

Invest in automation Reengineer revenue accounting

process

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Goss & Associates, LLC

ELIMINATE BACKLOGSGetting Revenue Accounting Current

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Goss & Associates, LLC

Outsourcing was used to: Maintain current revenue accounting

process Eliminate sales processing BACKLOGS Data enter unprocessed sales reports Capture unprocessed BSP long sale files Account reconciliation using technical

revenue accounting experience

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Goss & Associates, LLC

AUTOMATEInvesting in Revenue Accounting

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Goss & Associates, LLC

Found a Revenue Information System that used all 5 Computer Reservation Systems: Audits fares and commissions Reduces staff requirements Feeds revenue data to other systems Receives data from other system providers

like ATPCO and other airlines

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Goss & Associates, LLC

PROCESS REENGINERINGReinventing Revenue Accounting

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Goss & Associates, LLC

The reengineered revenue information process provided: Current technical revenue accounting skills Revenue Analysis Efficient processing of documents and data

Reduced process staff and increased analytical staff

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Goss & Associates, LLC

Revenue Accounting’s Future

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Goss & Associates, LLC

Commit to constant vigil

Commitment to improve process automation

Insure revenue accounting continues to be: Cost efficient A complete information provider Never backlogged

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Goss & Associates, LLC

Revenue Accounting Success Story

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