DEFINITION of 'Business Logic'
Custom rules or algorithms that handle the exchange of information between a database and user interface. Business logic essentially consists of business rules, which are policies that govern various aspects of a business, and workflows, which are sequences of steps that specify in detail the flow of information or data. Also known as business rules or domain logic.
BREAKING DOWN 'Business Logic'
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 today's economy.
For 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. 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.