What is Transaction Management Software and Why You Need It?

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In eCommerce, transaction management is a critical component of your operations. Your business’ transactions are the point at which you have successfully converted a potential customer into a paying customer. 

Transaction management software is a tool your business can use to enhance the overall transaction management process. 

Let’s take a look at what it is, and how it can assist your business’ operations.

What is it?

Transaction management is defined as “the supervision of critical business applications and services by auditing the individual transactions that flow across the application infrastructure. “

In short, transaction management is a way for an eCommerce business to ensure that the transaction-related operations of their online business are functioning in the way they intend it to, and in a way that will facilitate sales. 

Transaction management software is a way to outsource this task to a computer in order to optimize the entire supervision process and target specific components that may need to be improved.

From the moment a customer enters your business’ site, until the moment when they ultimately receive what they ordered, your business has the ability to be completely informed and in control of what is happening throughout that process. 

Why do you need it?

To automate the process

Automation through workflow within a software will make the entire process of managing transactions easier and free up more of your business resources. Software can be utilized to do virtually anything you had employees doing, especially for tasks that can be burdensome and hard to manage. 

For example, if you find that your employees are spending a large part of their time gathering customer information in order to ship the items that were ordered, the transaction software can be made to collect this information and feed it to the appropriate destination in your business. 

The people who were once involved with this can be freed of this task in order to focus on more urgent business needs.

It is also a way to require less overall manpower to perform the tasks involved. By managing the work this way, there will be a bigger return since you are essentially cutting the costs involved with operating your business. 

Understand your site’s functionality 

Transaction management software can show you how your customers are using your site in order to perform a transaction. It can show you how each site component works separately and as part of the entire technology infrastructure. 

If there is something that is performing slowly, or that is creating interference, you will be able to identify the problem that is causing it, and not have to spend time troubleshooting to figure it out. 

For example, perhaps many customers are abandoning their carts. The transaction management software can show you when this typically happens, what page the customers are on in the site when it happens, and many other details regarding the transaction. 

From there, you can determine if it is that the site is loading pages with errors, or that the customer’s coupon codes are not working, and various other potential problems in order to correct it.

The software will clearly and quickly make it known to you what is not operating as it should be. 

The ability to quickly identify and correct problems will prevent your site from performing in a way that does not facilitate sales. 

Better conversion rates

In relation to identifying areas in the transaction process that need correcting, identifying weak spots will also enable you to optimize the overall process to increase conversion rates. 

One of the most essential success measures of your eCommerce business is your conversion rate. If more customers are actually making transactions, then your conversion rate will increase. 

The overall involvement of a software in the process will lend itself to improved performance for the customers. There will ideally be less downtime and components that fail on the front-end, since the performance on the back-end has been improved. 

If there is a part of the process that is not working to the customer’s satisfaction, you will know about it as soon as possible in order to cut down on customer’s being unable to actually make a transaction.

Link Different Processes Together

Throughout the transaction, many components of your overall eCommerce platform probably come into play. Your inventory management system may need to be alerted of a sale in order to prepare for shipping, while your accounting software may need to be updated to reflect the transaction, and so on. 

If your business has many different types of inventory, it may be complicated to differentiate what type of products are being sold in a single transaction, where they are coming from in the warehouse, and what kind of response your site needs to have in order to facilitate that transaction. 

For example, if a business sells content-access in addition to a physical product, the billing information can be automatically collected and sent to the accounting department, while the warehouse can be simultaneously alerted of the need to ship a product out.

When a transaction management software is implemented, the most essential processes involved with a customer’s transactions can be linked together to perform much more efficiently. There will be less time in between the order processing and the shipping, and the accounting information can be updated in real time. 

When the individual aspects of your business become linked together, the transaction process becomes faster and operates better than if they existed independently of each other. 

Audit the transaction

The efficiency of a process is critical to ensuring your business is operating effectively. With transaction management software, you can be aware of how a transaction works from start to finish. 

In doing this, you will be able to see how long each step in the process takes, see how many steps come into play in a given transaction, and visualize the payment process.

From there, you will be given a much clearer picture of exactly what is happening at every step, and where you can make improve. 

Since you have been given such a comprehensive insight into the operation via your transaction management software, you will have a starting point for the improvement plan, and you will have measurable outcomes that correlate to a change in the transaction process. 


Altogether, transaction management is a complicated process that a software can drastically simplify. By using transaction management software to help run your business, you can be sure that the processes throughout the entire transaction are operating effectively. 

When your business can offer improved performance features, you benefit from a decrease in the cost of operations, and the increase in conversion from customers who are satisfied with your site.


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