In functional testing basically the testing of the functions of component or system is done. It refers to activities that verify a specific action or function of the code. Functional test tends to answer the questions like “can the user do this” or “does this particular feature work”. This is typically described in a requirements specification or in a functional specification.

The techniques used for functional testing are often specification-based.

Testing functionality can be done from two perspective:

Requirement-based testing: In this type of testing the requirements are prioritized depending on the risk criteria and accordingly the tests are prioritized. This will ensure that the most important and most critical tests are included in the testing effort.

Business-process-based testing: In this type of testing the scenarios involved in the day-to-day business use of the system are described. It uses the knowledge of the business processes. For example, a personal and payroll system may have the business process along the lines of: someone joins the company, employee is paid on the regular basis and employee finally leaves the company.