Integrated Electronic Data Processing Systems:
The term data processing applies to the accumulation, classification, analysis, and summary reporting of large quantities of information. The procedures, forms, and equipment used to process and communicate data are called a data processing unit. Any accounting system, even a cash register in a supermarket is basically electronic data processing systems designed to make pertinent and timely information available to personnel responsible for various functions. Every purchase transaction requires a purchase requisition, a purchase order, verification of receipt of the order, voucher preparation, journalizing, posting, and a cheque to make payment.
Multiple copies of the forms are prepared for the departments concerned, and it is necessary to rewrite the data perhaps several times — a time-consuming procedure almost certain to generate errors. Integrated electronic data processing systems are systems for recording and processing information without rerecording of repetitive data. For instance, payable data of all kinds — from purchase orders, receiving reports, credits and allowances, cash discounts, to invoices and payrolls — can be processed through the accounting procedures with summary reports monthly, weekly, and daily where needed.
The results of computer processing are verification of accuracy, automatically written checks and remittance statements, classified and stored data files, preparation and posting to general and subsidiary records, and analytical reports.
In the course of recording and evaluating information, the computer will recognize and report any circumstances deviating from the routine or standard. This makes possible more efficient use of the concept of management by exception. Executives can examine and act upon only those situations requiring attention, allowing all normal operations to flow unimpeded.
The punched card is still one of the fastest and most efficient methods yet devised for posting source information. Depending upon the procedures, the original punched cards are prepared from either transaction documents or from journal vouchers showing the details provided by the source documents. After verification for accuracy, the punched cards are entrusted to extremely fast, accurate, and self-verifying machines for further processing be electronic data processing systems.
For business uses, the electronic data processing systems are usually maintained by a digital computer which basically is a calculating machine with extraordinary capabilities. At very high speeds it can perform basic arithmetic functions, compare numbers as to size and make many Yes or No decisions as called for in solving problems or processing an established routine. In addition, the computer can communicate with other machines in a system such as a magnetic ink reader or another computer which could be located in another city.