What Is Business Logic?

Business logic is the custom rules or algorithms that handle the exchange of information between
a database and user interface. Business logic is essentially the part of a computer program that
contains the information (in the form of business rules) that defines or constrains how a business
operates. Such business rules are operational policies that are usually expressed in true or false
binaries. Business logic can be seen in the workflows that they support, such as in sequences
or steps that specify in detail the proper flow of information or data, and therefore decision-
making. Business logic is also known as "domain logic."

KEY TAKEAWAYS

 Business logic refers to the logic and algorithms serving as the foundation of code in
business software.
 Business logic can be seen in the workflows that they support, such as in sequences
or steps that specify in detail the proper flow of information or data
 Business logic exists at a higher level than the type of code that is used to maintain basic
computer infrastructure.
Understanding Business Logic
Put another way, business logic is real-world business rules put into computer code and shown in
a computer program via a user interface. Business logic is most evident in its role in creating
workflows that pass data between users and software systems. Business logic determines how
data may be shown, stored, created, and altered. It provides a system of rules that guides how
business objects (parts of software that control how data is transported) work with one another.
Business logic also guides how business objects within software are accessed and updated. It
exists at a higher level than the type of code that is used to maintain basic computer
infrastructure, such as how a database is displayed to a user or as basic system infrastructure. 

The algorithms involved in business logic perform behind-the-scenes data processing that is
invisible to the user but is critical to keeping things running smoothly in a modern economy. 

Business Logic vs. Business Rules

Business rules are useless without business logic to determine how data is calculated, changed,
and transmitted to users and software. But without business rules to create a framework, business
logic cannot exist. Business logic is any part of a business enterprise that makes up a system of
processes and procedures, whereas anything else is an example of a business rule. 

Business Logic Example

A credit card issuer's business logic may specify that out-of-state credit card transactions above a
certain limit, say $500, be flagged as suspicious and the issuer contacted as soon as possible to
confirm the authenticity of the transaction. The policy of flagging such a transaction is an
example of a business rule; the actual process of flagging the transaction is an example of
business logic. Given that millions of credit card transactions are conducted every single day,
business logic enables such transactions to be checked and processed in an efficient and timely
manner.