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Transaction processingis a style ofcomputingthat divides work into
individual, indivisible operations, called transactions.
Atransaction processing system (TPS)or transaction serveris a
software system, or software/hardware combination, that supports
transaction processing.

Transaction processing systems were among the earliest computerized
Their primary purpose is to record, process, validate, and store transactions
that take place in the various functional areas/of a business for future
retrieval and use.
A transaction processing system (TPS) is an information system that records
company transactions (a transaction is defined as an exchange between two
or more business entities).

Let us look at a simple example of a business transaction. McDonald's, which
sells a large number of hamburgers every day, orders raw materials from its
suppliers. Each time the company places an order with a supplier, a
transaction occurs and a transaction system records relevant information,
such as the supplier's name, address, and credit rating, the kind and quantity
of items purchased, and the invoice amount.
A TPS provides data for other business processes:-> Management information system or decision support system
-> Special-purpose information systems.

Characteristics of Transaction Processing Systems

1. A TPS records internal and external transactions for a company. It is a
repository of data that is frequently accessed by other systems
2. A TPS performs routine, repetitive tasks. It is mostly used by lower-level
managers to make operational decisions
3. Transactions can be recorded in batch mode or online. In batch mode, the files
are updated periodically; in online mode, each transaction is recorded as it
4. There are six steps in processing a transaction. They are data entry, data
validation, data pro-cessing and revalidation, storage, - output generation, and
query support.

TPS MAIN CONSIST:ACID is the acronym for the four properties

Atomicity-the transaction starts and each step must be completed or it will be undone.
Consistency-data is agreed upon, remains in a consistent state and is accounted for.
Isolation-treats each transaction separately and keeps data from each transaction


Durability-the data should continue to exist.

The transactions can be internal or external. When a department orders ,office
supplies from the purchasing department, an internal transaction occurs, when a
customer places an order for a product, an external transaction occurs.
Internal Transactions: Those transactions, which are internal to the company and are
related with the internal working of any organization. For example Recruitment Policy,
Promotion Policy, Production policy etc.
External Transactions: Those transactions, which are external to the organization
and are related with the external sources, are regarded as External Transaction. For
example sales, purchase etc.

Types of TPS in retail:

Batch Processing transactions is the processing as the collection/storage of data at the
time of the event with actual updating of the database later when it is scheduled or there
is enough data.
An example may be the accounts which are not able to be easily stored and
updated due to the amount and type of data used. Examples of this may be a
telephone account, which accumulates over a period of time.

Control over time of processing
Reduced setup and processing costs
Errors corrected after the processing of data
Time delay in gathering data, storing and bulk processing
Operational costs may increase
Only identical data is processed in one batch.


Real time transaction processing as the immediate processing of data with the database
updated as the transaction is being carried out.
An example may be the Bank ATM and POS terminal, both of which have user input
which requires immediate feedback.

Transaction response time is quick if not immediate.
Data is processed as demanded.
Error correction can be immediate.
Standardization may not exist or may be more difficult.
Processing needs make control difficult.
System hardware and software is expensive.
Backup is critical incase of system crashing.
Security is critical incase of crashing or data security.
The possibility of data corruption requires backup.

Credit Card Machines

EFTPOS (Electronic fund
Transfer at point of sale)

Manual impression

Batch processing
Real-time processing


TPS Software is an intelligent,intuitivepractice management for accountants
softwarethat makes life and business easier for accountants.
Account-Friendly Features:
->Track time + billing with accountant-specific features
->Manage + optimize cashflow with WIP + AR analysis
->Create custom invoices and reports with flexible formatting
->Log time from your desktop, phone, or tablet
->Monitor Accounts Receivable withcomprehensive features


Abarcode reader(orbarcode scanner) is an electronic device that can
read and output printedbarcodesto acomputer. Like aflatbed scanner, it
consists of a light source, a lens and a light sensor translating optical
impulses into electrical ones.

Late Shri S. S. Goenka, Tally has come a long way. Today, more than two
decades since its founding, it enjoys a reputation as India's leading business
management software product company.
Tally powers more than 9 Lakh businesses worldwide. With Bharat Goenka
son of the late founder at the helm, Tally remains firmly committed to
Indian business.
This software will not only record accounting transactions but also keep track
of inventory transaction, Payroll, Order entry and many more..

Inventory repository
An entityinventory repository isa
management instrument that contains records
that contain inventory data for a physical entity.
Inventory data include the manufacturer, model
number, revision level, serial number, and static
configuration information. A user may read, and
also update, inventory data in an entity inventory

Replenishmentof goods
In order to increase productivity, most ERP and inventory management
systems implement replenishment rules to automate operations to some
extent. Replenishment is typically triggered when the inventory level hits
thereorder point(also called reorder trigger level), a setting from the system.

The complexity of replenishment operations greatly depends on the position

of the ordering agent within the supply chain.
For storespart of a retail network that relies on centralized warehouses,
replenishment are typically numerous, simple and largely automated. Indeed,
at the store level - grocery stores being the archetype here - there are
typically a rather large numbers of small orders to be passed on a daily basis.
Hence, store managers cannot afford a system either too complex or too
demanding in term of manpower.
For warehouses, replenishments from producers are typically larger and of
longer order cycle (the week rather than the day). Then, the order itself is
typically more complex becauselead timecan vary a lot (from next day
delivery for local producers to several months for overseas manufacturers)
and because other factors such as volume discounts impact the economic
order quantity.

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