Importance Of Transaction Processing System

Transaction Processing Systems A transaction processing system performs routine, day-to-day operation of a business that helps a company add value to its products and services. It requires a large amount of input data and produces a large amount of output without requiring sophisticated or complex processing. Examples are, order entry, inventory control, payroll, accounts payable, accounts receivable, and general ledger. An automated TPS consists of all the components of a CBIS such as hardware, software, databases, telecommunication, people, and procedures. A transaction processing system serves the foundation of other systems, such as MIS, DSS, and AI/ES. These systems handle less input and output, but more sophisticated and complex

It involves inventory control, order entry, shipping, invoice processing, accounts receivable, purchase orders, accounts payable, payroll processing, general ledger, and budget.

Objectives of Transaction Processing Systems Because of the importance of the transaction processing system, organizations expect their TPSs to accomplish a number of specific objectives. Process data generated by and about transactions

The primary objective of any TPS is to capture, process, and store transactions and to produce a variety of documents related to routine business activities.

Processing orders, purchasing materials, controlling inventory, billing customers, and paying suppliers, result in transactions that are processed by a TPS. Ensure data and information integrity and accuracy

One objective of any TPS is error-free data input and processing.

Rules must be in placed and implemented in the programming to ensure data accuracy before it is stored.

Another of a TPS is to ensure that all data and information stored in the file or database are accurate, current, and appropriate.

Produce timely documents and

 For example, UPS and FedEx systems keep track of a package at each stage of its traversal. Customers can use a tracking number to find the latest status of the package.

Some of the ways that companies can achieve competitive advantage are mentioned below.

Transaction Processing Activities All transaction processing systems performs a common set of basic data processing activities. TPSs capture and process data that describe fundamental business transactions. This data is used to update databases and to produce a variety of reports.

Transaction Processing Cycle The business data goes through a transaction processing cycle that includes:

 Data Collection

 Data Editing

 Data Correction

 Data Manipulation

 Data Storage

 Document Production These are briefly described in the following.

Data Collection

 The process of capturing and gathering all data necessary to complete transactions is called data collection.

It can be manual such as completing a purchase order by hand. It can also be automated via special input device such as scanners and