What are functional requirements? In-depth guide with examples

In software development, requirements are the North Star for every project – no exceptions.

Getting them right is absolutely critical if you want successful development.

And functional requirements are some of the most important requirements and your project’s success hinges on nailing them from the start.

So, if this is your first time hearing about them and you’re panicking a little bit, don’t worry, we’ve got you covered.

Here, we’ll discuss functional requirements in detail – what they are, why they’re important, how to write them and much more.

Let’s dive in!

What are functional requirements and why are they important?

Functional requirements describe and define your product’s features and functionalities, i.e. the specific operations it needs to perform to fulfill its intended purpose.

Without them, you risk your product turning into a vague collection of features that don’t meet users’ needs. 

Functional requirements provide a measurable structure, so that every feature serves a purpose.

They’re a key part of every software requirements specification (SRS) document.

SRS documents are like blueprints, but for software development – they show you everything you need to build your software product.

Getting your requirements right is absolutely critical for success – 37% of projects fail because of unclear or wrong requirements.

Having clearly defined functional requirements reduces the risk of miscommunication between stakeholders and your development team.

This will help you align everyone involved and keep development on track and on budget.

And that’s exactly what you should want.

Functional vs. non-functional requirements – what’s the difference?

Functional and non-functional requirements might sound similar, but they play very different roles in software development. 

Functional requirements describe specific actions your product must perform, while non-functional requirements describe specific metrics it needs to hit, like performance and security metrics.

In simple terms, functional requirements describe what your software does while non-functional requirements describe how it does it.

Here’s a more detailed comparison:

Functional vs. non-functional requirements: comparison

Functional and non-functional requirements are two sides of the same coin. 

And together, they create software that’s complete and usable. 

Examples of functional requirements

Now that we’ve covered what functional requirements are in detail, we’ll give you some specific examples.

Let’s say you’re building an e-commerce app.

Here are some examples of functional requirements you might write:

• Users must be able to register and create an account with an email address and password.
• The app should allow users to log in and log out securely.
• Users should be able to browse products by category, price, and brand filters.
• Users must be able to add products to a shopping cart and view cart contents.
• Users must be able to remove items from the cart or adjust quantities.
• The checkout process should allow users to enter shipping and billing information.
• The app must support various payment methods, including credit cards, PayPal, and digital wallets.
• Users should receive an order confirmation email with a summary of their purchase.
• The system must display real-time inventory levels for each product.
• The app should allow users to save items to a wishlist for future purchases.
• Users must be able to track order status (e.g., pending, shipped, delivered) from their account page.
• Users must be able to view and edit their account information, such as address and payment methods.
• Users should be able to leave reviews and ratings on products they’ve purchased.
• The system must allow users to apply discount codes or promotions at checkout.

Your functional requirements should accurately and concisely describe each feature and functionality you want your product to have.

And that’s the best way to avoid misunderstandings down the road.

Types of functional requirements

Functional requirements aren’t one-size-fits-all.

They will vary based on the type of software you’re building.

But, there are some general types of functional requirements you should know about, which we’ll cover next.

We’ll use a stock trading app as an example to make them easier to understand.

• User interface (UI) requirements

UI requirements specify how your users will interact with your product. They define design elements that make navigation intuitive.

In a stock trading app, a UI requirement might be: “The dashboard must display account balance, available buying power, and top stock movers of the day.”

• Data management requirements

Data requirements define how data should be created, stored, modified, and deleted. They’re especially important if your product handles sensitive user data.

For a stock trading app, a data management requirement could be: “The system must store and update the latest stock prices in real-time and retain historical price data for at least one year.”

• Business rules

Business rules define the logic or constraints behind specific processes in your product. They ensure it aligns with your internal policies and industry regulations.

A business rule in a stock trading app might be: “Users with a portfolio value under $25,000 are limited to three day trades within five business days.”

• Compliance and security requirements

Compliance and security requirements focus on protecting user data and meeting legal standards. They’re especially important if you’re building a product that handles sensitive data.

For a trading app, this could be: “The system must use encryption for all data transmissions and store sensitive data according to SEC regulations.”

• Integration requirements

Integration requirements define how your product will interact with other systems or services.

In our stock trading example, one integration requirement could be: “The app must connect to financial data feeds in real-time to display stock prices and market trends.”

• Reporting requirements

Reporting requirements are about insights you can get from system data. They’re key for products that have data analysis or show performance metrics.

So, in a trading app, a reporting requirement might be: “The system must generate monthly portfolio performance reports that detail returns, risk metrics, and asset allocations.”

Next, we’ll cover some best practices you should follow when writing functional requirements.

Best practices for writing functional requirements

Good functional requirements are clear, actionable, and align with users’ expectations. 

And everyone on your team should easily understand each requirement without any extra effort.

But, how do you get there?

Here’s what you need to do if you want to write clear, easily understandable functional requirements:

• Be clear and concise

Ambiguity is the enemy of good requirements. 

Requirements should be clear, simple, and to the point – you should avoid technical jargon and use straightforward language.

Ambiguity will lead to misunderstandings and cause unnecessary delays and confusion down the line.

For example, a requirement like “The system should allow users to enter personal details” is too vague and broad. 

Instead, you should be more specific, like: “The system should allow users to enter their first name, last name, date of birth, and email address in designated fields.”

•  Use user stories to describe requirements

User stories describe a requirement from the end user’s perspective – this ensures your product is aligned with real user needs.

If you’re building a messaging app, a user story could be: “As a user, I want to receive notifications for new messages so that I can immediately respond.”

They’ll help you translate dry functional requirements into relatable scenarios that your team can more easily follow and understand.

• Prioritize requirements based on value

Not all requirements are created equal.

If you prioritize critical requirements, you’ll make it easier for your team to understand which features they’ll need to build first.

For example, if you’re developing a travel booking app, requirements for booking and payment should take priority over the ability to leave reviews.

You should rank requirements by importance (e.g., must-have vs. nice-to-have) to keep the development process efficient.

• Use visuals for complex requirements

If your product has complex requirements, you should include visual aids in your SRS document.

Diagrams, flowcharts, and mockups will provide a clearer picture of system workflows. Here’s an example:

source: Sparx Systems

Visuals like these will make your requirements easier to understand, especially multi-step processes or complex integrations.

And that will help your team be more efficient when they actually start building your product.

• Involve stakeholders in the requirements gathering process

Involving stakeholders during requirements gathering is a crucial step you shouldn’t skip.

Their input will help you build a product that’s aligned with both business goals and user needs.

For example, if you’re building an HR management system, you should talk to your HR team to make sure you’ve nailed its core requirements.

And getting feedback from stakeholders will prevent misunderstandings that can derail your project.

• Document any changes you make

Project requirements often due to new data, market conditions, or changing priorities. 

You should document any and all changes you make to the original requirements to keep everyone on the same page.

You can use version control for requirement documents and you should meet with your team after you make changes so that everyone’s in the loop.

To wrap things up, here’s a key takeaway – functional requirements are the foundation of every successful software project. 

When done well, they’ll help you make development more efficient, minimize errors, and build a product that truly meets your users’ needs.

And these best practices are key to getting there.

Functional requirements: FAQs

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