After data and transaction processing, the data finalized in these two stages gets posted on the affected files. Application processing is designed to process more than one type of transactions to bring out the specific business results in one or more business functions. This processing is carried out once the transaction is processed for its validity.
Let us take an inventory application which requires the receipt and issue transactions duly validated for inventory processing. When these two transactions are processed, the inventory is updated for receipts and issues giving the net balance at the end of the processing for each item in the inventory is updated for receipts and issues giving the net balance at the end of the processing for each item in the inventory.
The application processing means the use of transaction data for bringing out a particular status. The application could be designed to change the number of different files holding a variety of information.
The application can be designed for status updation and the status triggered actions in the related field of the application. For example, if the number of work orders are on `hold' for no material to process.
The scope of application processing can be made diverse by incorporating different transactions from the same application area or associated areas. For example, the inventory and purchase application can be processed together for vendor evaluation, item valuation and payable accounting. The scope of the application can be made diverse, if it is foreseen from the design stage. At this stage necessary inputs are provided in the transaction which can be used at a later data in the other application.
The advent of communication technology and its embedded use in application processing extended its scope beyond the boundaries of the organization. The application can be designed for processing the results, updation of the business status, for triggering predefined actions and also communicating with the affected agencies located within the outside the organization.