What is a transaction processing system (TPS) used for?

A transaction processing system (TPS) is specifically designed to capture, process, and record routine business transactions efficiently and accurately. These transactions can include sales, receipts, cash deposits, payroll, and various other daily operations that businesses engage in. The primary purpose of a TPS is to ensure that these transactions are processed quickly and with a high level of reliability, which is critical for businesses that rely on timely and precise data for operational decision-making and reporting.

Unlike systems that manage network security, develop software applications, or control hardware operations, a TPS focuses solely on transaction-specific activities. It ensures that transaction data is collected and stored in a way that allows for quick retrieval and analysis, providing essential data for business analytics and reporting needs. This makes TPS an integral part of the enterprise resource planning and overall information systems strategy for most organizations.