January 26, 2022


Accounting + Finance Blog

Five (5) Key Types of Data Processing

Five (5) Key Types of Data Processing

Data are facts that are not useful to a person or group of people. To be useful, data is processed and imputed in a computer system to provide reports that are required by users. The various types of data processing are explained here.

Batch Data Processing

In this type of data processing, data is grouped before processing. This means that data are lumped in one place. After which they are processed. Then, another dataset is lumped and processed and so on.

Data are processed in this way to aid similar data to be processed at the same time. For example, management may want to compare sales figures month-on-month (MoM) or year-on-year (YoY).

For MoM, daily sales figures are a lump for a month. Daily sales for September and October will be calculated in separate batches. While for YoY, 2018 and 2019 sales figures will be added up in separate batches. Before they are compared.

Using this method provides more accurate information than other types of processing.

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Real-Time Data Processing

Here, data is processed as they occur in the organization. Real-time data processing is aided by internet connectivity. Lack or failure of internet access, especially in developing countries is a major obstacle to real-time processing.

This type of data processing is used in a trading business. When goods are sold, the sales figures are entered immediately and the output (mostly receipt) is given to the customers.

Banks also use real-time processing. When a customer comes in to deposit or withdraw their money, the data are entered and processed immediately. This is why before you leave the banking hall, you may have received an SMS alert signifying that the data is fully processed.

Online Data Processing

This is similar to real-time processing. Why? It is also done on real-time. However, all aspect of this type of processing is done online. A good example is the use of Point of Sale (POS) machines. You insert your credit or debit card and the system via online processes the transaction immediately.

Automated Teller Machine (ATM) is another perfect example here. In the case, data are processed online and you receive your cash or the money is transferred immediately.

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This is the use of Central Processing Units (CPUs) to process data. In this case, more than one CPUs is used for data processing. Also, each of the CPUs processed data independently. In an entity, each department has its CPU. Also, each of these departments processes data with their CPUs independently of the other. Although, at times a department may rely on the data provided by another department before it can process them.

Time-Sharing Processing

Here, several users use one Central Processing Unit (CPU). To enable every user to have access to the CPU, time is allotted to each user.

A good example of a company that uses this method is a game house. To make sure that many people partake in the game, a user is given time to play his or her game. Immediately the time is exhausted, the game on the computer will turn off by itself.

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The types of data processing explained here shows how data by organizations. An organisation may use one or more methods. For example, a trading firm may use a combination of the batch, real-time and online data processing.