The Effects of Electronic Ticketing On Revenue Accounting
The airline industry continues to be plagued by spiraling costs, making cost-cutting a necessary survival tool. One sure method for airlines to realize cost savings is by increasing the use of electronic ticketing and phasing out paper tickets. Electronic ticketing not only cuts distribution costs, it also reduces back-office accounting work and the need for some support personnel. Not surprisingly, electronic ticket distribution rates are higher in the United States than in other parts of the world, with some U.S.-based carriers generating e-tickets as much as 90 percent of the time. The International Air Transport Association (IATA) is targeting 100 percent electronic ticketing by the end of 2007.
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Revenue account support staff at some airlines has decreased by as much as 50 percent with the increase in automation and the use of electronic data. But whatever the savings, e-ticketing and data exchange are not the end of back-office accounting support. Staffing is still required to work exceptions in various areas of accounting, including interline settlements, travel agency audits, refund requests and fraud prevention.
In spite of the various effects of electronic ticketing on the revenue accounting process, there are ways airlines can achieve their cost-cutting goals sooner through business process outsourcing (BPO).