Business Rules: Definition With Examples

  1. What are business rules?
  2. Business rules examples
  3. How should you create business rules?
  4. How to automate business rules?

What are business rules?

Business rules are a set of instructions, requirements, or criteria that define how a task should be performed. These “criteria” often restricts who, what, when and where a task should be executed.

The most common types of business rules include:

  • Calculation rules – These predefine specific formula for calculations involved in budgeting, employee bonus, customer discounts and more.
  • If-then logic rules – Even in a single business process, many different scenarios can play out. That’s when companies often dictate that “If this happens, let’s do this. Otherwise, let’s do that.”
  • Decision rules – As an application of the if-then logic rules, decision rules are extremely common in approval processes. When a supervisor approves a request, the process moves on to the default next step. When the supervisor rejects the request, the process would likely take on a different path. 

Business rules examples

To give you a better understanding, here’re some applications of business rules across different functions and industries.

Human Resource (HR):  Leave Management

When an employee submits a vacation request form, you can set business rules to route each employee’s requests to their respective managers for approval. 

For example, looking at the workflow below, we’ve set the criteria that:

  • If the employee is from the Finance Department, the Finance Manager will review the leave request.
  • If the employee is from the IT Department, the IT Manager will review the leave request.
  • If the employee is from the Marketing Department, the Marketing Manager will review the leave request.

Finance:  Expense Reimbursement

If your employee submits an expense reimbursement form, you can set a criteria to determine who are the stakeholders that need to be informed about this request.

As you can see in the workflow below, we’ve set the business rules that:

  • If the expense claim amount is less than $1,000, only the employee’s supervisor needs to review the request.

  • If the expense claim amount is equal or more than $1,000, the Finance Manager is also required to step in as the 2nd approver.

Marketing:  Content Approval

Here’s an example of a decision business rule – when a writer submits an editorial piece to the content strategist, the next steps that follow will depend on the content strategist’s decision outcome.

In the workflow below, we’ve defined the following decision rules: 

  • If the content strategist approves the work, the writer will notify the graphic designer to work on the graphics.
  • If the content strategist disapproves of the work, the writer will need to redo the piece.

Supply Management:  Purchase Orders

Another example of a decision rule is that for purchase orders. This is a process that often requires multiple stages of approval.

According to the workflow below, these are a few of the decision rules that we’ve defined:

  • If the supervisor approves a purchase requisition, employee(s) can proceed to generate a purchase order form.
  • If the vendor rejects a purchase order, the employee(s) will be notified.

Medical Industry:  Patient Appointments

As mentioned earlier, processes often have multiple case scenarios that companies have to consider. For clinics and hospitals, an unintended situation could arise when a customer doesn’t turn up for his/her appointment.

So from the workflow below, we’ve set the rule that:

  • If a customer doesn’t turn up for their appointment, the customer service personnel will have to inform him/her to reschedule.

How should you create business rules?

Some companies document business rules statements to officialise them. 

Some use unwritten informal rules, of which everyone is obliged to follow anyway. 

But what about a method where you don’t have to write, remember or even execute business rules?

Yes, the optimal solution we’d say, is to automate business rules. One way to achieve this is to leverage on a workflow software to automate your business rules and processes. 

How to automate business rules?

The methods will differ depending on the workflow software you use. But here at Forma, our workflow builder has:

Let’s walk through this with an expense reimbursement example.

1. Create a workflow

With Forma’s no-code Workflow Builder, we’ve created a workflow that follows this if-then business rule: “If the claim amount is equal or more than $1,000, the CFO will have to review the request”.

2. Configure if-then rules with Conditions Plugin

Double-click on the Conditions plugin to configure your if-then rule.

3. Configure decision rules with Approval Plugin

You can control the next steps of an approval decision with the purple connectors of the approval plugin:

  • If the request is rejected: use the left purple connector of the approval plugin to connect to the next step.

  • If the request is approved: use the right purple connector of the approval plugin to connect to the next step.

4. Publish your workflow

Once you click on Publish Changes, your workflow will be automatically activated and executed by the Forma platform. There’ll be no interference needed from your end.

If you’re keen to execute business rules more efficiently and easily, you can automate it for free with Forma.