Accounting and reporting system of airlines industry: A case study of Biman Bangladesh

Abstract

The accounting system is the most important elements of an entity‘s information system. The analysis of accounting as an information system facilitates certain key issue. The pattern of financial accounting and reporting varies in the countries or regions or nature of business. Like other business, the basic purpose of an Airline Accounting System is to manage the control, reporting, use and accounting of tickets, miscellaneous charges orders, excess baggage tickets and other ‗accountable‘ documents. In doing so, it should be accurate and flexible, and provide maximum efficiency in processing ticket data, and posting and billing accurate values. It should validate all transactions, and initiate recoveries where under collections or errors have occurred. It should minimize opportunities for fraud, and identify circumstances in which a fraud may have taken place. It must deliver fast, accurate revenue and segment data to management and management information system. This is an outline of generic passenger revenue accounting processes, and does not represent any particular system; however it may be useful when considering possible revenue accounting system choices. Equally, out-sourced revenue accounting service providers are likely to have or need a similar system as the basis of their services. The modular structure of individual accounting systems will vary, as well as well as their coverage of the various processes within them. Airline Accounting System is designed according to the requirement of airline practice. Airline must give high emphasis on revenue accounting as the airline accounting system is unique and specialized in nature, any laps in the system may deplete millions of dollars of hard earned revenue earnings. Due to its distinctive nature, the process of reporting does not at all match with other transport industry and manufacturing organization as such; it requires specialized and experienced manpower from airline revenue to handle efficiently. Airline always maintain seasonal personnel in revenue accounts to look after and check revenue loopholes. The revenue airlines put efforts in revenue accounting, the more it checks leakage and contributes to revenue earnings of the airline. Finally Airline business is highly perishable and competitive in nature. Once airplane takes off with empty seat, there is no scope to recover revenue losses as it perishes.