What is the Data Processing Cycle?

The data processing cycle is the set of operations used to transform data into useful information. The intent of this processing is to create actionable information that can be used to enhance a business. This cycle involves the following steps:

Collection of data
Preparation of the data into a format suitable for data entry, as well as error checking
Entry of the data into the system, which may involve manual data entry, scanning, machine encoding, and so forth
Processing of the data with computer programs
Transmitting the resulting information to the user, typically via screen or printed report, so that it can be acted upon
Storing the input data and output information for future use

When data processing is to be conducted on a repetitive basis, it is more cost-effective to install controls over the process, thereby weeding out errors that might otherwise yield incorrect output information.