Examples of transaction processing systems include payroll, order processing, reservations, employee records, accounts payable and accounts receivable. These systems collect and store data about transactions, which are activities that change stored data. For example, using a credit card, reserving a flight and ordering products from a catalog are transactions.
An order processing system is a common type of TPS that organizations use to conduct business. When a company receives an order for a product, a TPS checks inventory to determine whether the product is in stock. If it is, the TPS alerts employees to retrieve the product from the warehouse, create and print an invoice and then ship the product.
A TPS can process transactions in two ways: batch and real time. With batch transaction processing, the system gathers transactions over a period of time and processes them all at once. For example, a payroll TPS gathers employees' hours for two weeks and then processes all the hours in one batch to calculate paycheck amounts. In contrast, with real-time processing, the system processes a transaction immediately. For example, when a traveler reserves a seat on a flight, a TPS uses real-time processing to reserve the seat immediately so that no one else can select it.