Goss & Associates, LLC Revenue Accounting Success Story

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

3  Started operations in the 1960’s  Based in the Pacific  Served 25 Cities  1,500+ Employees

Goss & Associates, LLC 4 Fleet  Operated 29 Aircraft  Aircraft mix included B747, DC10, B757, B727 & B737

Goss & Associates, LLC 5 AIRLINE’S REVENUE ACCOUNTING OVERVIEW Please visit our Web Site: Goss & Associates, LLCGoss & Associates, LLC

6  Annually the airline processed an average of million flight coupons 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

Goss & Associates, LLC 7  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

Goss & Associates, LLC 8  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

Goss & Associates, LLC 9 PROBLEM DEFINITION Please visit our Web Site: Goss & Associates, LLCGoss & Associates, LLC

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

Goss & Associates, LLC 11  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

Goss & Associates, LLC 12  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

Goss & Associates, LLC 13  In addition, investment in automation was needed to: Improve commission tracking Simplify payment process Take revenue data to segment level

Goss & Associates, LLC 14 ACTION PLAN Please visit our Web Site: Goss & Associates, LLCGoss & Associates, LLC

15  Eliminate BACKLOGS: Sales Account Reconciliation  Invest in automation  Reengineer revenue accounting process

Goss & Associates, LLC 16 ELIMINATE BACKLOGS Getting Revenue Accounting Current

Goss & Associates, LLC 17  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

Goss & Associates, LLC 18 AUTOMATE Investing in Revenue Accounting

Goss & Associates, LLC 19  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

Goss & Associates, LLC 20 PROCESS REENGINERING Reinventing Revenue Accounting

Goss & Associates, LLC 21  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

Goss & Associates, LLC 22 Revenue Accounting’s Future Please visit our Web Site: Goss & Associates, LLCGoss & Associates, LLC

23  Commit to constant vigil  Commitment to improve process automation  Insure revenue accounting continues to be: Cost efficient A complete information provider Never backlogged

Goss & Associates, LLC 24 Revenue Accounting Success Story Please visit our Web Site: Goss & Associates, LLCGoss & Associates, LLC