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Transaction Processing Systems

Transaction processing systems (TPS) automate routine business transactions and record them. TPS process transactions in real-time or through batch processing. They include subsystems like order entry, payroll, inventory, and accounts receivable. TPS improve efficiency by reducing errors and labor costs compared to manual systems. Management reporting systems provide structured reports on past operational data to support management decisions.

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Sohail Akram
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42 views30 pages

Transaction Processing Systems

Transaction processing systems (TPS) automate routine business transactions and record them. TPS process transactions in real-time or through batch processing. They include subsystems like order entry, payroll, inventory, and accounts receivable. TPS improve efficiency by reducing errors and labor costs compared to manual systems. Management reporting systems provide structured reports on past operational data to support management decisions.

Uploaded by

Sohail Akram
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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TRANSACTION

PROCESSING
SYSTEMS
Introduction

01 Transaction refers 03 TPS supports the


to an exchange of 01 process of business
goods or services transactions.
for money

02 03
02 By definition, 04 Automates the
transaction is a process of huge
recorded business amount of
event that affects paperwork
04
the financial well-
being of an
organization.
TPS

Computerized system that performs


and records the daily routine
transactions necessary to conduct the
business; these systems serve the
operational level of the organization.
Purpose of TPS

01 Keep records about the state of the


organization

02 To process transactions that affect


the records

03 To produce output that reports on


transactions that have occurred
TPS Tasks

Bookkeeping Issuance
Accurate records of firm’s
business transactions Production of such
documents that are
necessary for effective
business operations

Control Reporting
For operations control and error
checking
Role of IT in TPS

01 Error Level 02 Temporary or


Permeant loss of
01
Data
02
03 Labor Intensity 04 Service Efficiency

03

05 04 05 Responsiveness
Transaction Processing System
Functions

Input function Processing function: Output function:

• Capture input data • perform computation • produce screen output


• Enter input data • make decision • print output
• Validate input data

Storage function:

• stored data
• Access data
• Update data
TPS Types

BATCH PROCESSING REAL TIME PROCESSING


Batch Processing

All transactions for a period of time


would be collected in a group
(called a batch), input & processed
as a unit.

Data for all transactions to be


processed is brought together and
processed in a group

This was normally done at regular


intervals, such as every hour, day, or
week.

The biggest problem with batch


processing is that the master file is
never current.
Real Time Transaction Processing

Is interactive & each


transaction is
processed as it occurs.
Files are always
current when online
processing is used.
Online direct access
storage devices
(DASD)
The drawback to
OLTP is the high costs
associated with the
necessary security &
fault tolerance
features.
TPS CYCLE
Inquiry Processing
Many transaction processing systems
allow you to use the Internet,
intranets, extranet, and web browser
or database management query Document & Report generation
languages to make inquiries and Transaction reports might take the
receive responses concerning the form of a transaction listing such as a
results of transaction processing payroll register, or edit reports that
activity describe errors detected during
processing.

Transaction Processing Data Entry


1. Batch Processing The first step of the transaction
2. Real-time Processing processing cycle is the capture of
business data. Transaction data must
be entered into the system.
Order Entry
Payroll
Inventory
Shipping
Transaction Invoicing
Processing
Account Receivable
Subsystems
Purchasing
Receiving
Accounts Payable
General Ledger
Order Entry System

Processing function:
Input function
Output function:
• Check inventory quantity
• Accept customer
• Check customer credit • produce sales order
order data

Storage function:

•Storage customer order data


•Access inventory master data
•Access customer order data
Track Of Hours

Calculating Wages

Withholding Taxes
Payroll
Other Deductions
A payroll
system involves
everything that has
to do with the Printing And Delivering Checks
payment of
employees and the
filing of Paying Employment Taxes to Government
employment taxes.
Inventory

✓ The quantity of product


that a merchandising firm
has available to sell at any
given time is called its
inventory.

✓ Monitors Availability of
Quantity

✓ Monitors Stock Level


Invoicing
The invoicing system is the transaction processing subsystem that
creates invoices and sometimes, packing slips.

Filled Orders Orders

Invoice
Preparation
Invoices Invoices
Shipping
Shipping system is conceptually simple. Sealed, addressed packages of
goods are received from inventory, often with shipping instructions.

Shipment
Data
Shipments
Ship Goods Invoices
To Customers
Customers
Shippers
Shipping
Alternatives
The accounts receivable
system (or receivables
system)is the transaction
processing subsystem
that manages customer
purchase records,
payments, and account
balances.

Account Receivables
Purchasing

• Many companies use a


central purchasing
department
• Advantages of a centralized
purchasing department are
cost control and vendor
control
Receiving
The function of a receiving system in a receiving department is to receive,
inspect, and accept or reject goods that vendors ship

Purchase
Orders Vendors

Orders
Information
Verify Invoices
Receipts

Receipt Data
Receipts
Accounts Payable
Payable system is the transaction processing subsystem that handles
payments to suppliers

Anticipated
Purchases

Purchase
Verify
data Receipts

Purchase Forecast
data
Purchase
Commitments Cash Forecast
General Ledger
Ties all of the transaction processing subsystems together.

Account
Receivables

Payroll
Account
Maintain Payables
Purchase General
data
Ledger

Purchase Forecas
data t

Inventory Other data


Management
Reporting
System
A management reporting system is a part of
a management control system that provides
business information. This information can be
in the form of reports and/or statements
Properties of MRS:

Support structured Usually require a


Provide fixed types of
and semi structured formal request to be
information
decisions submitted

Often require a Consist of internal Concerned with data


formal run schedule operational data about the past

Often oriented to
summary and
exception reporting
Types of reports

Scheduled reports: Scheduled reports


are those reports that are issued
periodically.
e.g. daily production reports, monthly
performance reports
Exception reports: These reports are
issued when something unusual takes
place that requires the attention of
management.
Demand reports:

demand reports are


generated when
someone with an
authority requests such
a report.
Role of MRS outputs
in management
The most common type of output produced by an
MRS is hardcopy reports
Ideally the information contained in MRS reports is
timely, relevant, accurate and verifiable.

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