For each type of functional test, the tester identifies the expected behaviour, creates relevant test data, determines the expected output, performs the tests, and compares the actual results to the expected ones based on functional, business, or design specifications. The tests may be conducted manually, automatically, or a combination of both. Functional tests cover actions such as user commands, data updates, searches, and UI functionality. Defects identified during this phase often relate to the user interface or communication between processes.

Functional tests ensure that the system behaves as intended from an end-user perspective and meets both business and functional requirements. Each component must function according to its specifications, and business objectives must be fulfilled. This phase of testing requires extensive preparation, with testers developing functional test plans as soon as documentation becomes available. Conducting these tests can be time-consuming, highly detailed, and overwhelming, particularly for organizations with limited resources or tight deadlines.