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How to Write Business Rules

How to Write Business Rules

Tips for Business Analysts on How to Write Business Rules

Throughout the years, the business rules experts at Sparkling Logic have provided tips on how to write business rules. This post consolidates some of the best of the best with example business rules. Note, the exact syntax you use for writing business rules will depend on the rules engine that you use. While there is no universal business rules language, there are common features (and pitfalls) that we will address. For those of you new to business rules, we recommend you start by reading our business rules FAQs .

Differentiate between Decisions and Process

Whether you’re an insurer, consumer lender, or healthcare provider, you’re probably using business rules to manage applicant eligibility. Requirements may include certain age, state of residency, and income requirements. Are you calculating age based on an applicant’s birthdate? Should you store state information as an abbreviation (CA instead of California)? How do you handle rounding with income? These data-processing steps are best addressed with procedural code instead of business rules. Save your business rules for what’s truly decisioning logic such as determining applicant eligibility.

IN is better than OR

Now let’s say a particular product is only available in CA and TX. You could write something like “IF the applicant is from California OR the applicant is from Texas…” However, using OR can get confusing very quickly, especially when you mix OR with AND. Let’s say for both states, the minimum age requirement is 21. You write: “IF the applicant is from California OR the applicant is from Texas AND the applicant is at least 21 years old…” Does 21 apply to Texas or both California and Texas? You would need to add parentheses to make the statement more clear. “IF (the applicant is from California OR the applicant is from Texas) AND the applicant is at least 21 years old…” The more you mix OR with AND, the more parentheses you will need to add to keep the order of operations correct.

Rather than using OR, use IN instead. IN allows you to create lists, which make it easier to keep track of each criterion. With IN, you could write something like “IF the state of the applicant is IN (California, Texas) AND the applicant is at least 21 years old…” IN makes it much clearer than an applicant has to meet both state and age requirements.

ELSE is one of those atomic words which works fine when you only have one criterion. If age was your only requirement, you could write “IF the applicant is at least 21, THEN applicant is Eligible. ELSE reject the application.” However, your business most likely has multiple eligibility criteria. In order to use ELSE, you would have to make sure you spell out every situation that would not be negated by ELSE.

Instead, think in terms of the default and exceptions. The default is what happens most of the time and the exceptions are the exceptions to the default. With that mindset, focus your rule writing on exceptions . Going back to our earlier example, the default would be that most applicants would be ineligible because the product is only available in 2 states. You could write something like “IF the state of the applicant is IN (California, Texas) AND the applicant is at least 21 years old, THEN the applicant is eligible.”

Execute Business Rules in a 2-Step Process

So how do you address business rules for the default? That depends on your rules engine. For example, SMARTS™ Business Rules and Decision Management Platform allows users to set a default action when none of the rules fire. If you don’t have that capability, then you can establish a 2-step process. In order to do so, you must write your default rules in reference to the action or outcome of the exception rules. Then, you can schedule the exception rules to fire first and then default rules to fire second.

For example, let’s say the action to take once an applicant is deemed eligible is to change their application status from “Applied” to “Eligible,” you could write your exception rules as ““IF the state of the applicant is IN (California, Texas) AND the applicant is at least 21 years old, THEN change the applicant status to Eligible.” You could then write a default rule “IF the applicant status has not changed (is still Applied), THEN change the applicant status to “Ineligible.”

Order instead of Prioritize

Priorities allow rules to jump ahead of all other rules and execute first. Outside of the Rete algorithm , you don’t really need to use priorities. That’s because rules typically execute in the order that they appear. Therefore, instead of using priorities, simply order your rules in the manner you want them to execute.

In complex cases, you can avoid priorities by decomposing your decision into steps. For example, let’s say applicants could be eligible for multiple products but you only want them to see one. You can create a rule set that determines eligibility for all products. This would execute as the first step. Then, you can create another set of rules that ranks the products and selects the best for an applicant. Best can be defined according to your goals such as maximizing profitability. This would execute as the second step.

How to Write Business Rules? Go For Simplicity

In summary, when in doubt, follow the KISS principle, “Keep it simple, stupid” (or the grade school English class version “Keep it Short and Sweet”). In addition, leverage technology that will make your job easier, not create more obstacles. For example, learn how Sparkling Logic is using generative AI to simplify business rule writing and other use cases for generative AI to simplify decision management for business analysts . Or learn how you can leverage business terms to further simplify rules authoring and maintenance. While simplicity will require more time in thinking through the design of your business rules, your future self along with your colleagues will thank you for it.

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What are business rules? (And how to implement them)

how to write up business rules

Every day, every employee in every department makes decisions.

Some are big, and some are small.

Without guidelines, these individual decisions are haphazard and sometimes at odds with each other. But it’s possible to ensure that each small action is aligned with the overall goals of your organization.

All you need are business rules.

And you need to implement them in a way that makes your business operations more efficient, not less.

This article introduces business rules, what they are, and how to do them right.

What are business rules?

Business rules are statements that define or restrict the activities of an organization.

Basically, they’re just what they sound like: rules for your business.

They exist to aid decision-making and ensure that the actions of every employee are in line with the overall business strategy. In some cases, they keep the business in compliance with regulations.

Business rules are specific and define individual actions.

“Always provide excellent customer service” isn’t a business rule, it’s a value. “When a customer joins the loyalty program, offer a 10% discount on their first purchase” could be a business rule though.

Business rules have no gray area.  

They’re clear about whether an action should be taken or not. This provides employees with clear guidance and saves them the time and effort of figuring out what to do.

What are some examples of business rules?

Business rules can exist in any industry or any part of the business. They can apply to individuals, departments, or the whole organization.

Here are a few examples of possible business rules:

  • If a customer spends more than $3,000 in a calendar year, offer a 20% discount on their next purchase.
  • An annual performance review must be completed in December for any employee continuously employed by the organization for at least 3 months.
  • Property cannot be rented to a tenant with a credit score below 600.
  • On website pages for products with a price less than $20, recommend only products that are also less than $20.

Business rules affect the steps of many business processes.

If an HR business rule states that every new employee receives a welcome email, then sending that email needs to be baked into the onboarding workflow.

Employee onboarding process management board

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Common types of business rules

Organizations categorize their business rules in a variety of ways.

Regardless of how rules are classified, they all serve the same purpose: defining acceptable business actions. Here are a few common categories of business rules.

Formula rule

A formula business rule defines how to calculate a value, like the price of a product.

Qualification rule

Qualification rules filter which subjects should be included and which ones should not. For example, the rule might say that vendors must be chosen from a particular list.

Timing rule

A timing business rule defines what will happen after a set time period.

For example, a timing business rule could be that if a customer support ticket isn’t resolved within 48 hours, it will be escalated to a higher priority group.

Trigger rule

A trigger rule contains a trigger and an action. If step 1 happens, then step 2 will happen.

Business rules automations  for HR

Are business rules important?

Ronald G. Ross writes in Business Rule Concepts: Getting to the Point of Knowledge  that “Without any exaggeration, good business rules are no less important to business operations than a robust, finely-tuned nervous system is to the human body.”

But why are they so important? And are there any downsides to having business rules?

Pros of business rules

With well-implemented business rules, processes will be more efficient and employees more productive. There are a few reasons for that:

Decision-making is consistent.

When you have clear business rules, no one can go rogue. The actions of the organization are predictable, which makes it more trustworthy to customers, partners, and employees.

Actions align with strategy.

The average cog in the wheel can’t see what the whole machine is doing. Business rules ensure that every action, no matter how large or small, is working toward the goals of the company.

Clear guidance saves time and improves productivity.

A decision has to be made. There are a number of stakeholders involved.

Here’s one idea: you hash it out in a 2-hour meeting until everyone’s on the same page.

Here’s a better idea: you skip the meeting and follow pre-established business rules. It’s easier to get things done efficiently when you know exactly what to do.

Cons of business rules

When business rules become a negative thing in an organization, it’s usually because of poor implementation.

Business rules are a problem when they’re disorganized, unclear, or involve too much extra manual work.

Consulting business rules takes time.

Ideally, business processes — and the rules that guide them — should be well-known by employees, properly documented, and automated when possible.

But if the business rules are hard to find, or worse, “tribal knowledge” that hasn’t been documented at all, they slow down the process rather than making it more efficient.

Employees spend more than 25%  of their time searching for the information they need to do their jobs. Don’t let your organization’s business rules be the thing they’re hunting for.

Changes are hard to implement.

Business rules need to be flexible. Company priorities could shift, team members could change, and regulations or corporate governance could be updated.

In an ideal world, none of that would slow down operations.

Unfortunately, in many companies, business rules are hard to change.

Sometimes that happens because they’re hard-coded into a process. For example, you might have rules dictating dynamic pricing — the price of your products changes daily based on various factors.

Suppose you want to change a few factors in this system, but that will be a big project involving software engineers recreating the whole process. It’s tempting to just stick with the old way.

Other times, change is slow because the rules aren’t properly documented. Employees know them as “the way we’ve always done things,” and it’s hard to spread the word that the workflow has changed.

How to create good business rules

Whether or not you’ve officially documented your business rules, you already have them. Any time you consistently do things a certain way or make a particular decision, that’s a business rule.

But as we discussed, rules should be official and documented. Here’s how you do that effectively.

Find the decision points in your processes

Analyze your existing processes and find the points where a decision has to be made.

This is where you’ll need business rules. Write rules that define each possible scenario and the decision that should be made.

Consider your business goals

Business rules are low-level and granular, but they exist to support company objectives. Each time you write down a business rule, make sure that it has a purpose in line with your overall strategy.

Document everything

Commit every rule to writing. Here are some tips for how to put business rules into words.

Clarity is key.

This is called your business vocabulary.

Take the word “customer.” Is a customer anyone who has ever spent money at your business or someone who is currently using your services?

Including an example of each business rule in your documentation can help with clarity.

Keep business rules in a central location.

Some companies keep a physical guidebook of business rules. Others use an electronic database.

Whatever method you choose, it’s important that there’s a central repository of business rules.

If an employee needs to check a rule, they should know where to look. There should never be a question about which version of the rules is the most up-to-date. And if a rule needs to be changed, it should be easy to do so.

Maintain rule independence through documentation.

Rule independence means that business rules are separate from business processes.

The 2 are closely related. However, rules apply across all processes and procedures. If a business process changes, your business rules should remain the same, and the same decisions should result.

Rule independence is lost when business rules are used to create processes but not documented separately.

Automate workflows if possible

Remembering and following every business rule is a lot to ask of employees.

Mistakes will be made. Time will be wasted.

Any time you can build an automated workflow to manage a business rule, you help keep work accurate and streamlined.

Automation examples

Business rule automation works best when:

  • Any business person can understand it. Programmers shouldn’t have to get involved every time a rule is used in a process.
  • The automation is easy to edit from an intuitive user interface.
  • User permissions are managed. You may want to limit who can change the automation while still allowing others to view and understand it.

How monday.com helps implement business rules

As a versatile Work OS that’s used across the business, monday.com can help you implement business rules in a practical way. Here’s how:

Automate workflows with built-in business rules

monday.com automations  could not be easier to set up.

The user interface is intuitive for everyone and uses natural language, just like you’ve used to write your business rules in the first place.

An automation on monday.com has 2 parts: a trigger and an action.

Both the trigger and the action could be anything that happens on a monday.com board. For example, let’s say you’re using the CRM template  to manage your in-progress deals.

Your business rule states that when a deal is worth more than $15,000, it’s prioritized above other deals.

The Sales Pipeline board has columns for deal value and priority, so all you have to do is add an automation that says:

Automate priority change in CRM

When Deal Value is greater than 15,000, change Priority to High.

Easily manage changes to processes

Decided you want to make the priority threshold $20,000 instead? Or maybe you want to have multiple conditions triggering an action.

You can make those changes with a few keystrokes.

Automation with two trigger conditions

Transfer ownership of business rules

Ownership of your automations can be easily transferred. No information or function will be lost if someone leaves the team or roles change.

Manage business rules for multiple teams from one platform

At monday.com, we’re not a fan of silos.

Using a single platform to power teams across the company helps keep things consistent, efficient, and centralized — just like business rules ought to be.

Automate Zendesk from monday.com

If you have a team overseeing the organization’s business rules, monday.com will give them visibility into rules from HR to accounting.

You could even use a monday.com board to manage documentation of all of your business rules.

Business rules improve decision-making efficiency

Every business has its rules.

Whether they result in streamlined operations or extra work and confusion comes down to how you document and implement the rules.

monday.com has all the qualities that make automating business rules hassle-free: it’s easy to use, easy to edit, and can be used anywhere in the organization.

Business rules automation can be added to any monday.com template or customized board — and anyone can do it.

For a flexible board that can help you put together efficient business processes, try the process management template .

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how to write up business rules

Business Rules: The Ultimate Guide to Business Rules

What are business rules, how to create your business rules, business rules examples.

Organizations often rely on business rules to maintain efficient operations. Inaccurate business rules can quickly lead to variable outputs and low employee morale, hampering your business' growth. Companies that lack business rules may also have a disorganized business structure. Ultimately, these rules guide decision-making processes and affect how an organization will run its operations.

Essentially, business rules are guidelines that outline how organizations run their affairs and make decisions. These rules usually regulate business behavior and structure. Organizations use business rules to specify how their activities relate to their operations. Business rules help organizations to work steadily towards their goals.

Are you looking to verify compliance, manage expectations, and monitor job performance? Business rules combined with procedural standards minimize workplace chaos and boost client satisfaction. The rules also outline various definitions and organization limitations. They guide corporate behavior, processes, computer systems, and people, controlling the overall business operations.

Business rules can be in various forms, including regulations, policy, process description, or control documents. Following the set regulations is essential as they define an organization's aims and ideals. Proper documentation of business rules helps to streamline your business processes.

Business rules are essential in streamlining processes and maintaining the consistency of your outcomes. Your rules will address both human and technological behavior to enable automated decision-making. With the right strategies, human input will only come into play when creating the rules and handling exceptions. Here are essential steps to take when writing business rules:

Analyze your business processes

You'll need to determine points where you won't need human judgment. You can easily configure such issues into business rules that guide your operations.

Determine if you can access all the necessary data

Your teams will need all the required data and information in computer systems to make an informed decision. Work on making all the required data available in electronic format.

Record your rules

Use clear, concise language to record the laid-out controls. Avoid inconsistent terms to minimize ambiguity and enable transparent processes. Ensure that all the terms have the same meaning across every decision you take. Consider removing any redundant words, especially those that you use across multiple rules. While at it, try to minimize the length of the different regulations.

Configure the rules

Enter all your written business rules into your management system. You could also conduct unit and performance testing to guarantee the quality of your processes. The various tests occur at different stages, including the rule level, decision level, and the expected result.

Leave request

Your HR team usually verifies remaining leave requests before they approve any submissions. Business rules will create provisions that prevent gaps when specific individuals go on leave.

Business rules also specify the conditions necessary for promotions within your organization. You may need to assess your employee's skill set, accomplished targets, experience, and seniority.

Invoice processing

You can specify your invoice processing and determine who should make decisions for specific invoice requests.

Customer transactions

Comprehensive business rules monitor client behavior to determine which goods to sell. Organizations can also determine discounts and compute commissions based on the specified rules.

Bonuses provide an excellent avenue for rewarding high-performing clients. Businesses can specify their sales objectives and monitor the year's performance to determine which team members qualify to receive the bonuses.

Organizations and businesses require an agile platform to move rapidly and change direction with precision. Efficient process automation software enables your organization to model seamless business rules and enhance your business agility. Consider using business rule templates from reputable partners to streamline your processes.

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The 11 Secrets of Business Rules Success

The 11 Secrets of Business Rules Success

My firm, over decades of experience in developing decision management applications, has identified 11 steps to ensure your success with a BRMS. These steps can help you make the most of the system you select; they can also help you select the system with features that best support sensible business rules practices.

Following is a summary of the 11 steps. It addresses: picking the right decision application and development approach; writing rules effectively; monitoring and storing rules for best and long-term impact; and improving rules by operationalizing analytics.

The right application and development approach

Obviously, a BRMS is to be applied as a decision management application. But not every decision is appropriate for a BRMS. For example, decisions that are always made differently or only made occasionally are not likely to be good candidates. So how do you Select the Right Decisions to Apply Your BRMS (Step 1) ?

Here are some characteristics of a decision to look for. The decisions might:

  • Involve numerous rules.
  • Have rules that change frequently.
  • Require quick changes to meet short time-to-market windows.
  • Have rules that embody business domain knowledge best maintained by business people.
  • Involve symbolic reasoning, be complex or involve rules that interact in complex ways.
  • Require multiple levels of reasoning.

Good candidates have at least one of these characteristics and the best candidates have several.

Even after you’ve determined its application, a BRMS is not a solution that simply “starts working”—it needs to Follow a Sound Methodology (Step2) , in particular a delivery methodology. One popular delivery methodology that business rules work well with—among others—is the Rational Unified Process. It includes an iterative process that identifies risks early and often through the project. Regardless of your preferred systems development methodology, integrating activities for discovering, documenting, developing and maintaining rules maximizes your likelihood for BRMS success.

You also need to recognize the importance of Documenting Requirements (Step 3) . The first step is to document your business processes, then drill down into the details of your use cases. Use cases contain decisions—not business rules—and you need to identify all the decision points within your use cases. When drilling into the decisions, you need to document the business rules that make those de¬cisions, the terms used in those rules and other rule metadata, such as the rule’s source.

Managing traceability (Step 4) necessitates another documentation practice. Business rule updates are driven by real-world changes. Traceability to the original source helps you find the right rules and artifacts to update as you address changing business needs. Therefore you’ll need to document and maintain records of any source in¬formation you need—the law it came from, the business unit that defined it, owners and approvers, and more.  

Writing rules effectively

To write effective rules, you need to Manage Your Business Rule Quality (Step 5) in rule development using two important measures—rules must be concise and atomic.

Concise business rules only mention concepts that are absolutely necessary to decide upon an action or otherwise draw a conclusion. Consider, for example, the following rule:

If applicant’s gender is “Male” and applicant has a Criminal Record and applicant’s number of accidents is greater than or equal to 2 and applicant’s age is less than 25 then set applicant’s risk to HIGH

Are all four conditions needed for this rule? Would an applicant be high risk if they were a male under 25 years who had two or more accidents? If so, the criminal record check is redundant and should be removed.

Atomic business rules keep the concepts addressed by the rule as simple as possible. An atomic rule should be focused on one concept or outcome. Consider this business rule with two outcomes:

If the Customer is Platinum then the customer’s order qualifies for a 10% discount and the customer’s order qualifies for free next-day shipping

Two different business changes would require us to change this rule—any change to the discount policy or to the free shipping policy. However, when written atomically it would be easy to modify if the criteria for free shipping changed, for example:

If the Customer is Platinum then the customer’s order qualifies for a 10% discount If the Customer is Platinum and the Customer’s order total is greater than 50 dollars then the customer’s order qualifies for free next-day shipping

In addition to being concise and atomic, you need to Choose the Right Metaphor (Step 6) in your rule development. It’s critical to consider how rules will be authored and edited—what elements can be changed and in what ways. Flexibility in authoring should be part of a BRMS.

As shown in Figure 1 below, you might start with a simple text rule (1). To help a business user edit this rule safely and easily, you could establish edit styles—let them select the state and enter a value, for in¬stance (2). Over time you might decide to also specify exception rules, such as “does” and “does not” live in the specified state. You might also allow different comparisons (not just “less than”) and allow rules to specify Accept or Re¬ject, not just Reject (3). Ultimately you might allow the rule to be applied only to one of your defined customer segments (4) or give users complete flexibility to create and edit rules (5).

Various Degress of Editing Flexibility

While the “if … then” style is the “classic” business rule style, it’s not the only style. Many situations call for writing sets of rules such as in a decision table, exemplified in Figure 2.

Decision tables may not be appropriate for all sets of rules, however. If the rule set is very sparse or if the condition action pairs are not symmetrical, then a decision tree as shown in Figure 3 is more appropriate.

A Decision Table

So now that business rules are written, and even edited, business users can’t just start using them. Instead they need to Verify the Business Rules (Step 7) to make sure that the rules they’ve written don’t have structural problems. A BRMS should include a tool that analyzes all the rules and other artifacts to find potential prob¬lems. While this automated support for verification is important, it should not be a “black box.” In many cases automated verification can only identify potential problems. Effective verification must combine automation with manual consideration of potential problems.

Once verified, you want your business users to Validate the Business Rules (Step 8) they author and edit to ensure that they work. Typically this validation is divided into unit testing—checking that a change to a specific set of rules behaves correctly—and regression testing to confirm that the system as a whole behaves as expected.

Monitoring and storing rules for best and long-term impact

Simulating the Business Impact (Step 9) of a verified and validated set of changes is a critical requirement. After all, everything may work, but the business result may be undesirable. To do this properly, BRMS users need to employ decision simulation technology. This allows a user to understand the impact of a set of rule changes before deploying them—in business, not technical, terms—avoiding costly strategy errors.

Now, with verified, validated, impactful rules in hand, you can manage your decisions as a corporate asset. But this requires rules storage in a repository Structure for Reuse and Governance (Step 10) . The repository design must support your decision service lifecycle as well as your organization’s governance policies, access controls and more. A well-designed repository reduces development time and increases speed to market. Best practices in repository design should divide it into Technical, Business, Decision Services and Testing Libraries.

Improving rules by operationalizing analytics

Business rules underpin your operational decisions, ensuring that decisions are made appropriately, legally and as intended. But you also want to improve your decisions, which is where predictive analytics come in. Business rules define decisions but Operationalizing Analytics (Step 11) makes them smarter.

Today predictive analytic models can be brought into business rules-based decisions auto-matically using either a “black box” or a “white box” approach.

The black box approach involves code generation that implements the analytic model and the automatic integration of this code in the BRMS. Rules can use the result of the predictive model exactly as they use other attributes or data elements. While this is a common approach, it is not generally as effective as a white box approach which imports models and enables rule developers and authorized users to see and even modify models.

Author : Amede Hungerford, Senior Director, Decision Management Solutions, FICO

For more detailed information on this topic request a free copy of FICO’s whitepaper, The 11 Secrets of Business Rules Success or contact FICO at [email protected] .

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MindManager Blog

What are business rules? Your introductory guide

June 15, 2021 by MindManager Blog

By: Leanne Armstrong

Rules come in many forms. Some tell us what is or isn’t allowed during specific types of interactions or when we carry out certain tasks. Others govern what will happen as different processes or systems play out. There are even rules that serve as stand-ins for best practices and expert advice.

In every case however, these rules exist for a reason: not only are they critical to providing common ground, they help streamline various activities. And that’s especially important when the rules are built into the fabric of your business.

Without clear business rules in place, organizations would be littered with:

  • Inconsistent outcomes
  • Unhappy clients, and
  • Disengaged staff

Establishing certain rules is essential for both governing conduct and for laying out the criteria and conditions that enable effective decision-making.

To give you an idea of how successful companies wield business rules, this introductory guide will walk you through a high-level overview of what they are, why they’re so important, and where they typically get used in the workplace.

What are business rules?

Business rules are a set of principles, directions, or instructions that describe – and sometimes limit or restrict – certain business activities. Because their main purpose is to advance efficient, consistent decisions , they’re mostly set in place to ensure better business operations can happen.

In general, business rules:

  • Help guarantee reliability, compliance, and predictability across an organization
  • Are used to inform company policies, systems, and processes
  • Can reflect both internal procedures and external (industry or government-driven) regulations

If you’ve ever been involved with the financial side of an organization, one example of a business rule you may be familiar with is the need to follow GAAP – generally accepted accounting principles – in all your accounting procedures.

But while external guidelines like GAAP are widely available for reference, some companies make the mistake of relying on internal business rules that are simply “understood”.

Taking the time to clarify, document, and share key business rules provides an enormous advantage when it comes to producing high quality work, generating predictable results, and encouraging repeatable performance.

The importance of business rules

Now that we’ve answered the question of what are business rules, it’s time to dive into why they’re so important.

Suffice it to say that without a well-thought-out set of rules in place, both a company’s structure and effectiveness would soon crumble.

Business rules are vital, for example, for determining if or when it’s okay to follow a designated course of action in the workplace. And by providing a set of norms or standards for certain choices, they also help ensure agreement across different teams and departments.

When you establish a firm set of expectations where they truly matter:

  • Your team will find it easier to collaborate
  • Your business will be better positioned for growth, and
  • You’ll be less likely to experience financial loss, reputational damage, or legal repercussions (especially where external business rules are concerned)

Consider, for example, what would happen to a company’s revenue if client onboarding teams were simply permitted to use their best judgement when evaluating new customers instead of having to adhere to established credit approval procedures.

As we’ve said, rules exist for a reason.

And by implementing meaningful business rules, your company stands to gain a wide range of meaningful benefits, including:

  • Increased process efficiency
  • Better workflow consistency
  • Improved employee productivity
  • Less effortful compliance
  • Greater clarity in complex decision-making environments

The right business rules can even contribute to workplace safety and aid in conflict resolution.

Using business rules to stay agile

Business rules are also important for giving companies a level of agility that can help them meet their goals as quickly as possible. To do that however, they need to be created outside any new process design.

In other words, if you’re putting together a new way for your team to do something – and it’s going to mean following a couple of new rules – it’s better to establish those regulations separately.

Here’s an example.

Say you wanted to develop a more disciplined approach to collecting unpaid customer invoices. You might use a process map , flowchart, or workflow diagram to design a multi-faceted collections process that incorporates this new set of business rules:

  • If an outstanding invoice is due, email a friendly reminder to the client
  • If an outstanding invoice is 10 days past due, send a second email and follow up with a phone call
  • If an outstanding invoice is 30 days past due, make another phone call and follow up with a formal letter outlining the consequences for unpaid balances

By laying these policies out separately – and simply inserting a step into any relevant processes that directs users to them – you can stay more flexible by quickly updating your business rules whenever change needs to happen (like if you modify your payment terms, for example) instead of continuously redesigning all your process documentation .

Remember: clear, distinct business rules help teams stay aligned and make it easier for businesses to respond to shifting workplace requirements.

Where do business rules get used?

The importance of business rules becomes even more obvious when we consider where and when they tend to get used.

Business rules of all types play a key role in:

  • Preparing high-level operational systems
  • Automating work platforms
  • Carrying out business requirements gathering
  • Overseeing change management
  • The everyday launch of new company projects, products, processes, and plans

There are 3 main areas where business rules frequently get used to save time, prevent errors, and keep work moving forward.

  • Processes where one or more conditions must be met . This might include a company’s purchase order process, for example, where employee requests for specific office supplies or equipment must be signed off by a supervisor at a certain point along the way.
  • Evaluations that require a decision . If your product development team were testing and evaluating a new prototype, they might have to follow an established set of rules in deciding whether to approve, reject, or rework it.
  • Procedures designed to filter results . Thinking back to the example of our wayward client onboarding team, new customer accounts are often qualified or disqualified based on credit check rules and results.

No matter where or how you plan to use them, it’s also important that you find a reliable way to document and communicate your business rules to everyone who’s required to follow them. Like all company knowledge , business rules are only truly useful when they’re easy to access and understand.    

Real-world examples of business rules

Now let’s take what we’ve learned about business rules out of the classroom and into the wild for a look at some real-world examples.

In this first example of a business rule, the company involved has set a goal to improve sales outcomes by establishing a hierarchy around the way incoming sales calls are handled.

To that end, all calls are initially answered by a dedicated customer agent, who must then follow a clear set of rules to move the potential sale forward.

Rule #1 . If the caller is inquiring about a product or service within a specified dollar range – in this case, up to $500 – the customer agent will handle their questions personally.

Rule #2 . If the potential sale dollar value is above $500, the agent must either:

  • Forward the call to a sales account representative (for product valued between $500 and $5000), or
  • Forward the call to a sales manager (for product valued above $5000)

In this second example, the company is a successful manufacturer that’s learned through experience how much work they can handle and when they need to outsource.

As a result, they’ve established the following workflow rule to ensure their efficiency:

  • Customer orders below a certain volume are dealt with in-house
  • Customer orders above a specific threshold are entrusted to a proven third party

Here are some more examples of different types of business rules you might find in the workplace. In each case, the directives are set in place to help companies meet certain business objectives.

  • Policies for approving customer payment methods or credit-based accounts
  • Yes-or-no questions that determine which vendors a business will or won’t partner with
  • Hierarchy regulations that determine who must approve an internal purchase order or supplier invoice based on specific dollar amounts
  • Calculations that sales managers must use to tally bonus payments for personnel
  • A directed series of client questions that allow venue booking companies to check rates and availability
  • Externally sourced mathematical formulas or metrics that calculate revenue and expenses or measure financial performance
  • Lists that dictate which suppliers or third-party businesses an employee may contract with to carry out company projects
  • Federal or regional tax laws

As you move forward from the question of what are business rules to ensuring they get put into practice, remember that versatile knowledge mapping software like MindManager is ideal for laying out and sharing all kinds of company information, including fundamental business rules.

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How to Document Business Rules: A Comprehensive Guide

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The necessity of how to document business rules is essential for SMEs that are aiming to optimize their operations and augment decision-making. In this blog post, we will delve into sophisticated methods to help you become an expert in how to document business rules.

We will begin by discussing the importance of using concise language and maintaining an atomic structure when writing business rules. This approach ensures clarity and consistency throughout your documentation.

Next, we will delve into the world of visual representation with Unified Modeling Language (UML) diagrams, which can greatly enhance understanding of complex processes while learning how to document business rules.

Lastly, our exploration into decision simulation technology validation methods highlights the role Business Rules Management Systems (BRMS) play in refining decision-making processes as well as stressing the significance of validating your documented business rules through these technologies.

How to Document Business Rules

Business rules are the foundation of any successful organization. They provide structure and guidance for employees, customers, and stakeholders alike. Documenting business rules is essential to ensure everyone understands what’s expected of them in order to achieve success.

How do you document Business Rules?

The first step in documenting business rules is to define them clearly. This means understanding exactly what each rule entails and how it will be enforced within the organization. For business rules examples, if a company has a policy that all employees must wear uniforms while on duty, this should be documented with specific details about the type of uniform required and when it must be worn.

Once you have defined how your business rules work, you need to create a system for tracking them. This could include an online database or spreadsheet where each rule can be stored along with its associated information such as who needs to follow it and when they need to do so by.

It's also important that these records are regularly updated so that everyone knows which version of the rule applies at any given time — after all, no one wants their hard work going down the drain because someone forgot about an outdated regulation!

Finally, make sure your team is aware of these policies by providing training sessions or workshops on how they should adhere to each rule.

You may even want to consider incentivizing compliance by offering rewards for those who consistently follow regulations — think “employee of the month” awards or special discounts for customers who abide by certain standards set forth in your documentation process!

By taking these steps towards how to document business rules, organizations can ensure their teams understand expectations while avoiding costly mistakes due to miscommunication or lack thereof altogether — talk about killing two birds with one stone!

how to write up business rules

Utilizing Concise Language and Atomic Structure

When learning how to document business rules, it's crucial to use concise language and maintain an atomic structure. This means addressing a single issue without being dependent on other rules, which helps reduce complexity and ensures clarity when implementing guidelines across various departments. By focusing on clear communication, businesses can better understand the importance of each rule while avoiding confusion or misinterpretation.

Importance of concise language in documentation

The key to effective documentation is simplicity — keeping your content straightforward allows readers to easily comprehend the information presented. Plain language principles advocate for using everyday words, short sentences, and an active voice throughout your writing process.

Benefits of maintaining atomic structure for business rules

An atomic approach focuses on breaking down processes into their most basic components — individual tasks or steps that are independent of one another yet contribute towards achieving a common goal. In the context of documenting business rules, this translates into creating standalone guidelines that don't rely heavily on other existing policies but still fit within the overall framework of company operations. Maintaining an atomic structure offers several advantages such as easier comprehension, greater flexibility, and better scalability.

Simplified instructions lead to fewer misunderstandings among team members who need to follow the rules. Independent rules can be updated or modified without affecting other parts of the system, allowing for smoother adjustments as your business evolves. As your company grows, an atomic structure makes it easier to onboard new employees and integrate them into existing workflows with minimal disruption.

By utilizing concise language and atomic structure when documenting business rules, organizations can ensure that the information is clear and organized. Visual representation with UML diagrams further enhances understanding of complex processes by providing a visual aid to help comprehend them more easily.

Visual Representation with UML Diagrams

Unified Modeling Language (UML) diagrams provide an effective method for visually representing business rules. These visual aids provide clear overviews at different levels within the organization while allowing easy cross-referencing between related elements. Implementing these diagrams will help your team quickly grasp complex concepts by offering simplified illustrations that highlight essential information.

Types of UML diagrams used in documenting business rules

State Machine Diagrams capture the behavior of an object or system as it transitions through various states based on specific events and conditions. Activity Diagrams illustrate workflows and processes, showing how activities are coordinated across multiple actors or components. Use Case Diagrams depict interactions between users (actors) and systems, highlighting functional requirements from a user perspective.

All three types offer unique insights into your business operations, making them invaluable tools when it comes to documenting your company's policies and procedures.

Advantages of using visual representations for understanding complex processes

Our brains process visuals much faster than text — think about how quickly you can recognize a familiar logo versus reading its name. By using UML diagrams, you can convey complex ideas more efficiently and effectively.

Visuals make it easier for team members to discuss and understand business rules, fostering better communication across departments. When you have a clear visual representation of your processes, it becomes much easier to spot inconsistencies or gaps in the system. This leads to fewer mistakes during implementation and ultimately saves time (and headaches) down the line.

Using visual representations such as UML diagrams can help to better understand complex processes and ensure you business rules are documented accurately.

Decision Simulation Technology Validation Methods

Accurately and swiftly deciding is paramount in the ever-shifting business climate. BRMS can be used to aid businesses in rapidly and accurately deciding by incorporating predictive models into automated decisions. By incorporating predictive analytic models into rule-based decisions automatically, BRMS can assist organizations in improving overall decision quality while speeding up the process.

Role of BRMS in Improving Decision-Making Processes

A solid Business Rules Management Systems implementation allows businesses to maintain consistency across various departments by standardizing rules and processes and allow them to easily update or modify rules without affecting other parts of the system. It also reduces human error by automating complex calculations and logic evaluations. BRMS helps analyze data patterns to make informed predictions about future outcomes.

To ensure that your documented business rules are practical and efficient, it's essential to validate them against real-world scenarios using decision simulation technology. This will give you confidence that your team has covered all bases when implementing these guidelines throughout your organization.

Importance of Validating Business Rules through Decision Simulation Technology

Decision simulation technology, as its name suggests, simulates different situations based on input parameters provided by users or generated from historical data. It then evaluates how well documented business rules perform under those conditions before actual implementation takes place. One key benefit is identifying inconsistencies or errors within documented business rules early on helps avoid costly mistakes during implementation.

Also, by testing different rule combinations, decision simulation technology can help you identify the most efficient and effective rules for your organization's specific needs. Running simulations allows businesses to anticipate potential risks or challenges that may arise from implementing new business rules. This proactive approach helps organizations prepare for any unforeseen obstacles in advance.

Incorporating decision simulation technology into your validation process ensures that your documented business rules work and are not only accurate but also practical and efficient. So go ahead, and embrace this cutting-edge method of validating your company's guidelines - because when it comes to making smart decisions, there's no room for error.

The key to "how to document business rules" successfully is to use concise language and atomic structure, visually represent with UML diagrams, document user interfaces through wireframes, and validate decisions using simulation technology. Doing so can help entrepreneurs create a scalable system that streamlines processes/policies while providing an effective onboarding experience. Having the correct tools can allow for the optimization of effectiveness without reducing quality or precision, guaranteeing that your company stays agile as it develops.

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Business Analysis Templates

How to write business rules for agile projects.

This tutorial describes how to write business rules for a software development project. These guidelines also apply to software testing, business analysis, and other scenarios where you need to define business rules for an IT system.

Download Business Rules Templates (MS Word/Excel) .

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Learn More about this Business Rules template

What is a Business Rule?

A business rule is a rule that defines a specific constraint within the context of a business.

Business Rule Examples

Let’s say you’re developing an IT system for a bank. In addition to gathering technical requirements (the hardware, hosting, platform etc.) and user requirements (how customers will apply for loans, credit cards, etc.), you also need to consider the bank’s business rules.

Here’s an example.

When John applies for a credit card, the bank offers him a credit card application form, if he meets certain criteria.

In other words:

If the customer is over 18, has a valid identity, and has completed the application form correctly

Then give the customer a credit card

Else explain why they have been refused.

So, the structure of the business rule is essentially.

  • If this is True
  • Then do this
  • Else do the other
  • If, Then, Else are the three elements to consider when writing a business rule.

Business Rule Groups

Most business rules are part of a larger body of work, typically an overarching process model.

Think of a business rule as one rule in a large rule book.

The name of the rule book changes depending on the project management or business analysis methodology you’re using, but the idea is the same.

It’s also worth noting that business rules often overlap, cross-reference each other, and form part of larger business rule groups.

For example, you might have a business rule group for Credit Cards, another for Pensions.

Business Rule Structure

To create business rules , first specify the vocabulary that is required to express the policy, then represent the logic of the business policy as “if-then” statements.

Source: IBM

The typical structure of a business rule is as follows:

Constraint/Action:

Define the business rule using a single sentence as a declaration.Each business rule must have a Subject, Verb and an Object.

Write the business rule in language that is unambiguous and accurate.

Use words that have specific meaning within the business domain.

For example, in the banking world ‘online’ means that system is up and running, whereas for someone else, it might mean the internet.

Use Nouns for business entities or attributes.Use Verbs define the relationships between entities.If you have no Business Data Model, then create a Glossary.

Use unique Numbers to identify the rule.For sub-rules, use hierarchic numbering, such as 2.1, 2.2, 2.3 and so on.

Each rule sentence should begin with one of Constraint/Computation/Action:

BR 1.1 Constraint/Computation/Action: xxxxxxxxx

BR 2 Constraint/Computation/Action: xxxxxxxxx

BR 2.1 Constraint/Computation/Action: xxxxxxxxxA business rule typically consists of the following information, in the order specified:

Definitions

At the beginning of the rule, set parameters that identify business terms by using easy to understand names.

The conditions section of the rule contains the “if” statements.These statements define the conditions under which actions are completed. If the condition is true, the action is completed.A business rule can contain one or more condition statements.

The actions section of the rule contains the “then” statements.These statements define the actions that are taken when the conditions that are represented by the “if” statements are met. If the actions section contains more than one action, the actions are taken in the order in which they are written.

You can also include “else” statements in the actions section. These statements define what actions to take if the conditions are not met.

Download Business Rules Templates in Excel and Word .

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Implementing business rules to improve operational efficiency

What Are Business Rules (and How to Implement Them)

Assign a task to two people without any guidelines and you can expect completely different results. This can work for projects that have some degree of creative leeway. 

But having employees perform tasks their own way on more critical activities can affect project outcomes and lead to inconsistent customer experiences.

So how can you set expectations and ensure consistent results across your organization?

Implementing business rules is a good place to start.

This article will look at what business rules are and how implementing them can change how you work. We’ll also look at how you can incorporate business rules into your workflows to make them more efficient.

Click the links below to jump ahead:

What Are Business Rules?

What are the benefits of business rules, how to implement business rules into an automated workflow, 7 examples of business rules.

Business rules are a set of instructions that determine how specific processes are performed. They provide guidelines on critical activities and help ensure compliance with company policies.

Employees having a lack of clarity or understanding of their roles is more common than you may think. Nearly 50% of employees across all sectors lack role clarity in the workplace.

Using business rules across your organization can help employees understand their roles and what they need to do to carry out certain tasks.

You can write these rules down in a handbook for employees or automate them using workflow automation software. The software often includes a business rules engine that guides decision-making based on preset rules.

Let’s say you want to automatically approve purchase requests that are below $5,000 but require approval from a manager above that amount.

With a workflow engine , you can create a business rule based on the example above and implement it in your approval process for purchase orders to automate this decision-making.

Here’s an example of a purchase order with a business rule:

Example of a purchase order workflow with a business rule

Workflow routing is just one example of how you can apply business rules.

Other examples include using rules for data entry. For example, you can make certain fields on a form required depending on which department is filling them out.

Later in this article, we’ll take a closer look at how you can use workflow software to implement business rules. For now, let’s look at why you should use them in your organization.

It’s not uncommon for a business to make decisions on the fly in its early years. But taking this approach isn’t practical in the long term.

Organizations that want to scale their operations without sacrificing efficiency must implement automation technology like business rules. 

Here’s why.

Increases Efficiency

Unwritten rules create a lack of clarity, which affects efficiency. 

Imagine you assign similar tasks to a group of new hires. Without clear guidelines and rules, your new hires will likely complete the task to a different standard. Some may even waste time figuring out how to perform a certain step.

Employee figuring out how to perform a task

Business rules make your workflows more efficient, especially when you use business process automation software to automate them.

Take document routing as an example. 

Chasing down signatures to get a document approved is time-consuming. By applying business rules to document routing, you can make approvals more efficient.

Improves Consistency

Many organizations have rules that are informal or undocumented. 

For example, a manager may offer discounts to customers who spend a certain amount. It’s a common strategy that retailers use to boost sales and increase loyalty.

However, if this rule isn’t documented, employees are likely to apply the discount differently — some customers may receive a discount, while others may not. This can lead to inconsistent customer experiences and even hurt your brand.

Applying business rules to a process can improve consistency. They ensure that employees uniformly carry out certain tasks once specific criteria are met.

Ensures Compliance

Ensuring compliance with company policies is difficult without well-defined rules.

Consider the expense approval process , which allows employees to claim back any costs they’ve personally incurred on behalf of their employer.

However, one challenge that finance teams face is maintaining compliance. Only 27% of companies have a system that automatically flags out-of-policy expenses.

Companies with automated systems that flag out-of-policy expenses

Employees may include out-of-policy items (or forget to attach receipts) when submitting expense claims, which can lead to financial losses if the errors are not caught.

Ensuring compliance can prove challenging, and mistakes are bound to occur if there are volumes of expense claims to process.

Finance departments try to improve compliance by including a list of items that are covered and placeholders with detailed instructions for submitting expense claims. But, this is a manual and error-prone approach.

A business rules engine can enforce compliance so that ineligible expense items are automatically rejected and claims cannot be submitted without the proper receipts.

Streamlines Decision Making

Companies make hundreds of decisions on a daily basis. Implementing business rules can help streamline these decisions.

For example, let’s say your company assigns customer support tickets to certain representatives based on specific criteria. While an employee can make these decisions, you can use business rules to automatically assign those tickets.

74% of business leaders and employees believe that parts of their jobs can be automated. 

Business leaders who believe their jobs can be automated

By leveraging business rules to automate decisions like routing, you can speed up certain processes and free up employees for higher-value work.

With the benefits of business rules described above, it’s no surprise that 93% of business decision-makers plan to incorporate automation across more areas of their organization.

Let’s look at how you can get started with business rules in the next section.

The easiest way to implement business rules is to write them down in a handbook. But their application relies on every individual reading them and following through. 

Inevitably, different individuals will interpret the instructions differently. It’s almost impossible to obtain consistency and uniformity with this type of manual approach.

Using workflow automation software like frevvo can help your company enforce business rules in a consistent manner thereby streamlining operations. Here’s how to get started.

1. Pick a Workflow

Business rules are more effective when you apply them to workflows that employees perform on a regular basis.

Start with a workflow that follows a repeatable set of steps (with clear start and endpoints). It should also accomplish a specific objective for your company and be performed reasonably often.

Here are some example workflows you can apply business rules to:

  • Employee onboarding
  • Purchase orders
  • Contract approvals
  • Invoice approvals
  • Expense claims
  • Travel requests
  • Time-off requests
  • Timesheet approvals

Your company may have dozens or even hundreds of workflows. 

To avoid becoming overwhelmed, simply choose one to start with. You can also narrow down your list by choosing a workflow that generates a high return on investment (ROI) when completed.

2. Create a Workflow Diagram

Once you’ve picked a workflow, the next step is to understand how it works today.

What is the exact sequence of steps? Who’s involved in each step, and what decisions do they need to make? Do employees need any tools or resources?

Walk through the exact workflow yourself and get input from those who are directly involved.

Use the information you’ve gathered to create a workflow diagram — a graphical model that lets you visualize each step of a workflow from start to finish.

Here’s an example of a workflow diagram for invoice approvals:

Example of a workflow diagram for invoice approvals

Creating a workflow diagram is useful because it helps you identify where you can add business rules to your workflows.

3. Add Your Business Rules

The next step is to add your business rules.

Let’s say you want to make invoice approvals more efficient. Senior executives are currently reviewing each invoice, but this policy is slowing approvals down.

To speed things up, one business rule you can create is to route invoices to a senior executive only if their value is $10,000 or more.

frevvo’s Visual Rule Builder walks you through the following steps when adding a rule to your workflows:

frevvo's Visual Rule Builder

There’s no coding required, so even non-technical users can create their own business rules.

Here’s what our new invoice approval workflow looks like with a business rule: 

Invoice approval workflow with a business rule

Invoices below $10,000 are automatically routed to the finance department for payment.

This is just one example of a business rule you can add to a workflow. Here are others that you can create with the Visual Rules Builder:

  • Validate that the data in a field fits the requirement (e.g., valid email addresses)
  • Make additional fields required depending on which department is filling them out
  • Populate fields with data based on certain selections
  • Show/hide form controls like buttons and text areas 
  • Automatically and consistently apply discounts (e.g., depending on region)
  • Ensure all required information is provided before allowing the workflow to advance to the next step

Adding these and other rules to your workflows can help your company improve efficiency, minimize errors, and speed up approvals.

4. Test Your Workflow

Leaving out a key step in a workflow can delay work and cause confusion. That’s why it’s important to run a few tests before you deploy a new workflow. 

In frevvo, you can test your workflow right from the workflow designer. You can even preview how the dynamic forms you create will look on mobile devices.

Here’s an example of a mobile preview for invoice approval forms:

Mobile preview for invoice approval forms in frevvo

Run through the test to make sure everything is working properly. It’s also a good idea to get feedback from your team, as they’ll likely have valuable insights to share. When users have a chance to impact the system, they’re also far more likely to enthusiastically adopt it.

5. Deploy Your Workflow and Monitor Key Metrics

Deploy your workflow and provide guidance so that your team knows how to use it. 

Be sure to also track key performance indicators (KPIs) like cycle times — the time it takes to complete a workflow from start to finish. The analytics data you gather will prove especially helpful to continue improving your business processes . 

Now that you understand what business rules are and how to create them, let’s look at how you can apply them across your organization. Here are some examples.

Read more : 10 Examples of Business Rules That Make Work More Efficient

1. Routing Documents

Forms like contracts and invoices typically go through an approval process. However, having a senior executive review each one may not be the best use of their time.

You can create a rule like, “Route a VP for additional approval if the invoice amount is above $10,000” to improve turnaround times.

Implementing a business rule using frevvo's Rule Builder Wizard

2. Performing Calculations

Manual data entry is time-consuming and prone to errors. You can add a business rule to your forms to automatically calculate totals from other values.

Here’s an example:

Calculating subtotals on a form with a business rule

This cuts down on manual data entry and reduces the risk of human error.

3. Applying Discounts

You can create business rules to apply discounts on accounts that spend a certain amount. An example could be something like, “Give 5% off if a customer spends more than $5,000.”

Using business rules to apply company discounts

4. Requiring Signatures 

Receiving an important form without a signature can be frustrating — you’d have to send the form back and review it again.

To avoid wasting time on constant back-and-forth trips, you can make signature fields required on forms like expense claims and display an error if a signature is missing.

Requiring signatures on important forms

5. Enforcing Data Validation

You can also create business rules to specify custom formats for fields. An example is ensuring that users enter social security numbers or bank account numbers in the correct format.

Specifying a custom format with a business rule

6. Approving or Rejecting Applications

Lenders often use specific criteria to approve or reject loan applications.

You can apply similar rules to processes like contract approvals. For example, you can create a rule that declines a contract if certain criteria aren’t met, saving employees the time it would take to unnecessarily review something that does not make business sense.

Contracts can also have extremely complex and dynamic approval chains depending on the information entered, the departments involved, and ad-hoc changes made along the way by approvers. 

Business rules put guidelines around these approval chains making sure that necessary approvals aren’t skipped, while still affording the flexibility to change things on the fly.

7. Improving Compliance With Internal Policies

Business rules can help improve compliance. 

For expense claims, you can make certain fields required (e.g., image attachments for receipts) and have employees check a box confirming they’ve read the company’s expense policy. 

You can enforce constraints on per diem charges, mileage reimbursements, and business meals automatically without the need to manually verify.

Business rules can also allocate expenses automatically to GL categories or budget accounts depending on data entered in the form. This reduces the need to manually reconcile later.

You can also apply business rules to other internal policies, such as vacation and time-off requests with similar productivity-enhancing automation.

Business rules are powerful tools that can help your organization improve its processes. They use business logic to guide and automate everyday decisions.

The good news is you don’t need a team of developers. frevvo’s workflow automation software comes with a powerful business rules engine. It has a fully visual user interface, so there’s no coding required.

How to create dynamic forms with frevvo's Visual Rule Builder

Related posts:

  • 10 Examples of Business Rules That Make Work More Efficient
  • How Sales Order Form Templates Help Improve Business Efficiency
  • Automated Form Processing: A Tactical Guide

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Business Rules in 2024: Benefits, Examples & Best Practices

how to write up business rules

Digital first is already a business model most companies follow, and hyperautomation is becoming the next step in enterprise digital transformation. However, companies must establish robust decision management practices to optimize human decision-making and achieve decision automation to automate as many business processes as possible. 

Business rules are integral to decision management, and this article explores their importance, types, examples, and best practices for incorporating them into your business processes.

What are business rules?

A business rule is an instruction or a directive that describes, defines, or restricts how a certain business activity or task should be performed. Such rules assist employees in business decision-making under specific conditions. They’re often expressed with conditional logic statements such as “If-then”, “When”, “Only if”, “If-else”, etc.

For instance, “If a product’s stock level reaches the minimum stock level, then reorder the product” is a business rule. As you can see, business rules already exist in every business environment, whether or not they are formally defined and written down. However, formally defining and collecting these business rules provides several benefits as we’ll discuss below.

Why are business rules important?

Converting business activities into business logic by establishing and documenting business rules provides the following benefits:

It paves the way for process automation

Business rules formally defined with conditional statements can be incorporated into process automation systems. An automation system, such as an RPA or an intelligent automation bot , can use these rules to take action when it comes to a point where it needs to make a decision in order to continue the workflow.

It helps capture unwritten / tribal knowledge

Employees spend 3.6 hours searching for information every day, and 31% of them feel burned out because they cannot find the necessary information. Tribal knowledge, also called hidden knowledge, is one of the reasons for this problem. It’s the knowledge needed to accomplish a task but not documented and only known by certain individuals within an organization. 

If undocumented, tribal knowledge leads to inefficiencies, errors, and poor employee experiences. Business rules ensure that all the knowledge of subject matter experts is captured and shared across the organization.

It improves decision-making

Business rules ensure employees know how to perform specific business activities and enable them to make better and more consistent decisions. For instance, an operations manager of a telco company can make accurate and timely decisions once the firm applies business rules to operator-alarm categorization.

It aligns individual actions with broader business strategy

It is estimated that 80% of the performance differences between organizations are due to their level of strategic alignment. Companies can use business rules to determine how individual actions can contribute to their overall business strategy and ensure that each action is aligned with it.

It saves time, reduces errors, and increases efficiency

Whether or not they are combined with automation tools, business rules increase overall productivity as they predetermine who will do what, when, and how. When combined with automation technologies and redesigned processes, it can reduce operational costs by 30% .

Types of business rules

Different sources categorize business rules in different groups, but it’s common to classify them as constraint rules and derivation rules, both having several subcategories: 1

Constraint rules

Constraint rules, as the name suggests, specify conditions that restrict behavior. There are three types of constraint rules:

  • Stimulus and response rules define the action to be taken (response) based on a specific condition (stimulus). For instance, the example above regarding the stock level of a product is a stimulus and response rule which specifies a response (reorder) based on a stimulus (inventory level reaches the minimum).
  • Operation constraint rules specify the conditions that must hold both before and after an operation. For instance, “An employee can achieve the senior title only if they have worked for the company for at least three years. They are then eligible to receive a yearly bonus” is an operation constraint rule that defines the precondition and postcondition of an operation.
  • Structure constraint rules specify the conditions that cannot be violated in any case. For example, “The number of employees in the sales team cannot be greater than 10” is a structure constraint rule.

Derivation rules

Derivation rules specify conditions for deriving or inferring facts from other information. There are two types of derivation rules:

  • Inference rules specify that a particular conclusion can be drawn if certain conditions are met. For instance, “Bank accounts that haven’t been used for two years are considered dormant accounts and treated as such” is an inference rule.
  • Computation rules are similar to inference rules but they use a computational algorithm to make the inference. For instance, “An applicant is considered loan eligible if their credit score is above the threshold” is a computational rule where the system can compute the applicant’s credit score using other data.

This is only one way to categorize business rules. Different categories can be used by different companies according to their needs, and certain business rules may not fit into any of these categories. For instance, business rules may include definitions of fundamental business terms that are used in other rules. So, this classification should be considered a guideline rather than a strict classification.

Examples of business rules

Some examples of business rules include:

  • Insurance underwriting : A business rule can be employed to determine whether the applicant is eligible based on specified criteria and calculate the premium based on other business rules.
  • Lead qualification : Leads can be qualified or unqualified based on a set of business rules, and then qualified leads can be contacted based on other business rules.
  • Customer discounts : Marketing teams can offer customers discounts based on business rules such as “If a customer spends more than $5,000 within a year, then offer a 25% discount on their next purchase.”

These are just a few examples. For more, check our comprehensive article on different examples of business rules .

Incorporating business rules into your processes

Business rules can be defined manually for each business process and then hard-coded into these processes for automation. However, like any other manual process, manual business rules management:

  • Is not scalable, as you’ll have to manage many interrelated business rules as your company grows.
  • Slows the pace of change in your company because when you hard-code business rules into your business process, you have to rely on technical staff to update them.

A more agile approach is to use a decision management tool such as a business rules management system (BRMS) . A BRMS:

  • Helps organizations define, implement, manage, monitor, store, update, and automate business rules across their organization from a central platform.
  • Enables non-technical users to create and implement business rules.
  • Provides a business rules engine that allows other enterprise applications to access business rules and execute them when necessary.

These features make a BRMS an integral part of enterprise-wide automation initiatives.

If you have other questions about business rules or want to get started with business rules management systems, we can help:

External Links

  • 1. This categorization is based on James Odell’s 1998 book Advanced Object-Oriented Analysis and Design Using UML

how to write up business rules

Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month. Cem's work has been cited by leading global publications including Business Insider , Forbes, Washington Post , global firms like Deloitte , HPE, NGOs like World Economic Forum and supranational organizations like European Commission . You can see more reputable companies and media that referenced AIMultiple. Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization. He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider . Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.

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What Are Business Rules and What Is Their Importance?

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No time to read? Sit back and listen to this post.

Without clear business rules and procedural definitions, a chaotic workplace will often have inconsistent outcomes, poor morale amongst employees, and dissatisfied customers.

Introduction

Suppose you've been a long-term business owner or even a leader in an established business. In that case, you know how chaotic things can get when most decisions are left to fully autonomous employees.

While there is a role for autonomy as it promotes job satisfaction and can help employees grow as they learn to make decisions to better the business, in most cases, at least a core set of understood business rules is critical to help the organization function.

“If you don’t have time to do it right, you must have time to do it over.” -Unknown

In their simplest definition, business rules are directives that define (or constrain) business activities. Designed to help an organization achieve its goals, those without clear business rules and procedural definitions will often find a chaotic workplace with inconsistent outcomes, poor employee morale, and dissatisfied customers.

The concept of business rules was not born out of the technology era. Instead, business rules were developed or invented through a grass-roots effort to provide the best possible approach to business operations. But, adopting business rules as a broad concept for organizations didn't occur until the early 1990s.

Business rules are now accepted as an underlying requirement of most organizations. They are often used to help prepare system flows or procedural flow charts that outline how a business will operate.

When business rules are made right, they provide efficiency, consistency, predictability, and benefits. They also ensure that work can continue to move forward.

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Examples of Business Rules

A broad range of approaches can develop business rules, but the following few points provide fundamental examples to help you understand what we’re getting at:

  • A decision-making hierarchy for invoice processing, where the values of specific invoices are tiered to determine which managers can approve.
  • Calculations to determine bonus potential and payouts for sales personnel.
  • A series of required questions that, if an answer is no, a specific vendor is excluded from a particular partnership opportunity.
  • A set of questions and answers for a guest booking a hotel room to determine availability and rates.

Why Are Business Rules So Important?

Effective business rules help set expectations and guide how work will be conducted. Business rules must also ensure an organization abides by local, state, and federal regulatory requirements and guidelines or may address the governance of a specific project .

Organizational leaders often leverage business rules to establish safety in times of conflict resolution, decrease errors, and prevent the need for litigation.

Briefly: Combining Rules with Automation

Business rules alone rely on individuals to follow and enforce them. Combining these rules with an automation platform allows organizations to apply them transparently as part of standard business workflows. For instance, rather than Bob in accounting reviewing invoice amounts and then escalating them manually when a threshold is exceeded, the digitized invoices automatically flow to the appropriate people. This can be applied to any existing business rule part of a business process. We'll cover more on this below.

The Challenge of “Tribal Knowledge” with Business Rules

Most companies have tribal knowledge , which is undocumented information, processes, and rules that exist only in the minds of certain employees. When business rules are not shared widely across an organization and are unwritten, it creates inconsistency in production, processes, quality, and customer/employee experiences. When business rules are not made commonly available to all interested parties, the business subjects itself to a degradation in performance.

Take this example that well outlines the importance of ensuring tribal knowledge is not limited to a select few:

  • Imagine an organization with seasonal spikes in business. This could be a retailer that needs to ramp up store staff and customer relations support or even a tax office that needs to bring in additional help to get through the months leading up to April 15.
  • Your trainer works to train all of these new resources in short order so that they can hit the floor or workspace and start bringing value.
  • But, let’s say a new regulatory requirement about the sales of a specific product to those only over 18 in a particular state. This information is known by the Legal or Regulatory staff who prepare for the change, but it's never communicated to the trainer and thus not passed down to all the new seasonal employees.
  • This organization, lacking standardized and well-communicated business rules, could be liable for not following proper rules and regulations when employees fail to screen customers at checkout properly.

In this example, having a central channel to document and, as importantly, communicate rules is the core issue. In many other cases, the problem is simply that only one person knows a rule, and it's taken for granted they'll always be there to provide critical guidance.

But when critical organization-wide information is known to one individual, it can be dangerous. This is the “if you get hit by a bus tomorrow, what would we do?" scenario. Unfortunately, there are unexpected employee vacancies, and businesses must transition from tribal knowledge to documented knowledge and ensure it is put into practice for any business rules that need to inform critical business decisions.

Types of Business Rules

When defining the types of business rules that most organizations rely upon, it is essential to understand various assertions:

  • A structural assertion is one where a fact expresses some aspect of the structure of an enterprise that determines how decisions are made.
  • An action assertion outlines a constraint or set of conditions that have some form of control over the actions of the enterprise.
  • A derivation is simply an additional element of knowledge that comes from other critical knowledge about the business.

Read more about the history of business rules .

Within the assertions explained above, rules are further defined as one of three types when part of a process:

  • Coordination rules— Coordination rules put forward a general requirement that must be met for a process to continue. General statements like "A request must include the department's billing code." These rules help keep a process moving without rework.
  • Qualification/ disqualification rules— A set of qualification/ disqualification rules is used when determining if a particular subject should be included or excluded in a process. Think of this as a filtering rule that prevents a lot of wasted time and effort.
  • Decision rules— A decision rule is used when a subject needs to be evaluated and assigned the next step. (e.g., approved, rejected, sent back for more information).

Video: What Are Business Rules?

Business Rules Complement Business Processes and Automation

Organizations can often incorporate their business rules into a workflow automation platform that can generate final decisions and offers as part of a workflow. An excellent example of this is in the hotel industry.

When a guest goes online (or even contacts the reservations department by phone), they must provide certain pieces of information to determine if a room is available and to get the rate. The critical information requested is generally the length of stay, the number of guests, and dates for a visit.

Another critical but secondary piece of information is whether or not that guest belongs to that chain's loyalty program and, if so, their history and current loyalty tier. Obviously, the presence of a discount code for a deal package will also impact the rate.

Once the hotel's reservation system has all this information, it can better provide a list of available rooms and at what rate. All of the guest's data feeds the business rules for that hotel chain. These rules are an excellent blend of how decision and qualification rules are used parallel with coordination rules to generate a decision.

Incorporating Business Rules into Your Organization

Organizations have to remember that technology is only part of the solution in today’s workplace, where there are seemingly no limits to the amount of impressive technology designed to improve productivity and efficiency. More important than any piece of technology you decide to purchase is the work that individuals and teams must do to codify the business rules and processes that run the business. Once these rules and procedures are determined and accepted, you can begin to transform the enterprise through automation digitally.

Additional Resources

  • What Are Business Rules? (with examples)
  • How to write business rules in 7 simple steps
  • Wikipedia on Business Rules
  • An Overview of Business Rules (Video)

how to write up business rules

Categories Business Ideas   Workflow Ideas  

how to write up business rules

Marketing the world's best workflow automation software and drinking way too much coffee. Connect with me on LinkedIn at  https://www.linkedin.com/in/michaelraia/

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10 Examples of Business Rules and Logic

Michael eisner january 15, 2021 business process automation (bpa) workflow automation.

Table of Contents

Business rules and logic play a critical role in the efficient operation of an organization. They set expectations, provide guidelines on work performance, ensure compliance, and help organizations automate their processes.

In this article, we will look at 10 common business rules examples to illustrate their potential real-world applications.

What are business rules?

Business rules are directives that define an organization’s business activities. They are important because they clarify an organization’s objectives and detail how processes will be performed. Business rules can be informal, written, or automated.

When it comes to automating rules, a business rules management system (BRMS) plays an incredibly important role. A BRMS is a software solution that is used to define, deploy, execute, monitor, and manage business rules.  There are a broad range of business rules systems available, but they all have three key components.

First, business rules are stored in a repository. A repository is a database infrastructure that collects, manages, and stores data rather than embedding rules within an application’s code. Second, a BRMS provides easy to use development tools that allow users to define and manage business rules without the need to write code.

Finally, a runtime environment allows applications to invoke the applicable business rules and execute them using a business rules engine . Note that a business rules engine can also be purchased independently of a BRMS .

Organizations that stand to benefit from a BRMS include:

  • Organizations that are governed by defined business rules or internal policies.
  • Organizations seeking to improve efficiency while making more informed decisions.
  • Organizations that are concerned about compliance issues and want to reduce the possibility of legal and regulatory actions.
  • Organizations that prioritize flexibility to adapt to changing market conditions.

Common business rules examples

Customer discount rules.

Business rules are commonly used to offer customers discounts. For example, an organization may have a policy to give customers that spend $5,000 in a calendar year a discount on purchases once that threshold is reached. The rule could be: “If a customer spends more than $5,000 in any calendar year, then offer a 15% discount on each item.”

Subscription service auto-suspension

Subscription fee models are common in nearly every industry. Yet manually managing subscription billing and service eats away at your bottom line. To make it easy, may automate suspension of service for nonpayment. So, an organization could create a business rule that cancels service for any customer that fails to make a payment (i.e., more than 30 days past due).

Automated sales commissions

Many employees are compensated on a commission basis or awarded bonuses based on performance. To simplify the process, accounting might create a rule that: “If an employee sells more than $50,000 worth of products within a calendar year, he or she will be awarded a $5,000 bonus.” This rule ensures that an employee is paid as agreed without the need to manually track sales.

Assigning assets to new employees

Employee onboarding is a time-consuming process. Employees must be trained, granted system access, and assigned assets, among other things. An example of a common onboarding business rule might be that all new employees are assigned an email address. Credentials would be automatically created allowing the employee to access the system and choose a new password.

Home loan interest rate business rules

Banks are required to collect a lot of data when originating a mortgage, like information about the home being purchased and the borrower’s credit history. Business logic plays an important role in automating manual loan processes. For instance, a bank can specify a minimum credit score to qualify for a specific interest rate.

Suspicious transaction triggers

To mitigate fraud financial institutions rely on automation to flag suspicious transactions. With these rules, banks can specify charges that trigger authentication. For example, out-of-state credit card transactions over $1,000 could require that a representative contact the cardholder to verify the transaction.

Generating student ID numbers

Admissions Offices are also tasked with collecting and reviewing a lot of information. Business rules can help streamline the application process as well as enrollment. For example, once a student is accepted the system can automatically generate student ID numbers. Rules could determine both the prefix and the required number of characters.

Declined applications based on scores

Landlords and property management companies are tasked with reviewing rental applications. Creating rules to approve or reject applications can streamline the process. For instance, an organization could create a rule that declines a rental application for an applicant with a credit score lower than a specified threshold.

Auto calculating shipping rates

Clearly defining shipping rates helps organizations to provide good customer service and ensure that each sale is profitable. Business logic is commonly used to calculate rates. For example, “The basic rate is $2 per pound but is reduced to $1.50 per pound for excess over 10 pounds.”

Purchase requests by amount

Manual approval processes are inefficient and often lead to delays while employees chase down supervisors for signatures. With a BRMS, an organization might automatically approve purchase requests under a certain amount, say $2,000. For purchase requests over $2,000, the rule may require that the request is reviewed by a supervisor.

ProcessMaker is a low-code intelligent business process management software that makes it easy for organizations to automate processes with business rules and logic.  Learn more about our award-winning platform that has a native integration with OpenRules , a decision management and business rules system.

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How to Write Policies: A Beginner's Guide to Policy Writing for Businesses

Introduction.

Building a policy document is one of an organization's most important tasks.

No, really. Whether you're writing for an enterprise or SMB, policy documents are essential to making sure you can effectively run your business. Though often overlooked, they're necessary to make sure everything operates as it should.

Want to know how to write effective, accurate policies? You're in the right place.

1. Introduction to policies

Before you can start writing policies, you should first have a basic understanding of what they are.

For that reason, we will start by defining policies!

What is a policy?

A policy is a set of guidelines, or rules, put in place by an organization or individual to ensure efficient operations.

They provide a framework for decision-making by outlining the protocols that must be followed in certain situations, and they help ensure consistency and compliance in the workplace.

Policies should be:

  • Clear and easy to understand. Policies should be written in terms that are easy to understand and easily summarized
  • Consistent. When crafting policies, you should ensure that the language is the same throughout and that your policies align with any existing company guidelines
  • Compliant. All of your policies should comply with any relevant laws and regulations

Why are policies important for businesses?

So why should businesses write policies?

Policies can:

  • Provide guidance on how to handle issues that may arise in the workplace
  • Help ensure compliance with laws and regulations
  • Create a culture of transparency, accountability and fairness in the organization
  • Provide employees with clear expectations and guidance around their roles and responsibilities
  • Help reduce the risk of disputes or costly legal action taken against an organization

2. Researching policies

Regardless of the type of policy you're developing, conducting thorough research is essential.

This will help you identify best practices and find examples or templates to guide your policy writing.

You can do both internal and external research .

Internal in a way that you can interview employees, look through past documentation, and identify any existing policies or procedures that can be used as guidance.

📌 How to build HR procedures: A step-by-step guide

External research includes looking at industry standards, legal requirements, policy templates, and different types of processes and policies. It's important to know what policies would be beneficial for your specific business.

To make your research easier, here are some of the most common business-related policies:

  • Customer service policies.
  • Vacation and time-off policies.
  • Policies regarding employee complaints.
  • Data and privacy policy.
  • Health and safety policies.
  • Working from home policies.

For all of these policy examples , a simple Google search can offer a lot of inspiration. Google "customer service policy" for a lot of ideas and even templates you can use on your own policies.

When doing research, make sure to consult with stakeholders who the policy may impact. This can help ensure that your policy accurately reflects the organization's actual needs.

Once you've gathered the necessary information, you can start writing your policy.

3. Drafting policy

When it comes to writing the actual policy, it can be hard to get started. We've put together a step-by-step guide to help you craft effective and understandable policies.

1. Define the purpose & scope of the policy

Everything starts with why you’re creating the policy in the first place.

For example, a policy for HR will have a very different goal than a policy for Customer Success. Clearly state the purpose of the policy, as well as its boundaries. This will give the policy context and make it easier for everyone to understand.

Make sure to include any details that are important such as who the policy applies to, what it covers, and how long it will remain in effect.

2. Identify responsibilities & procedures

As you write the policy, make sure to include all the relevant details. If there are specific tasks or procedures that need to be followed, make sure to include those as well.

🎓 Related resource: How to write procedures — a step-by-step guide .

And make sure to list who is responsible for what, as this will help ensure that everyone knows their role and can take action when needed.

3. Create a standard policy template

Creating a standard policy template makes writing policies now and in the future easier. This means creating a standard format that applies to all policies.

We've listed some ideas:

1. Use a professional font

Policies are formal documents and should be written using a professional, easy-to-read font.

Regularly used and professional fonts like Arial, Georgia, Times New Roman, and Calibri are all great for policies.

2. Keep the font size consistent

You should also keep the font size consistent across all your policies. Typically, 12 pt. is a good size for policies, making them easy to scan and comprehend. This is different for headings; you should use larger sizes to make them stand out.

3. Avoid bright colors

Policies should be professional documents, so it's important to use colors that reflect this. Avoid bright and flashy colors and stick with more subtle tones, like black and white.

You can also use colors to differentiate sections or highlight essential points when appropriate.

4. Be clear

When writing policies, clarity should be your number one priority. The goal is to ensure that everyone understands the policy, which means using simple language and avoiding long, wordy sentences.

As a baseline for all of your policies, avoid jargon or technical terms that may be difficult to understand.

4. Start writing the policy

With all the research and preparation done, it's time to start drafting the policy.

To help you, here are some things to include in the policy:

  • Header: By only reading the header, it should be clear what the policy is about. Include the policy title, date, and any other key information.
  • Introduction: Provide a brief overview of the policy and what it covers. The introduction line should help set the tone for what follows.
  • Purpose of the policy: If you didn't already do it in the introduction, go into more detail about why this policy exists and how it will benefit your organization.
  • Body text: This is where you will include any procedures, responsibilities or exceptions related to the policy. Break up these points into smaller paragraphs, as this will make it easier to read and understand.
  • Conclusion: Wrap up the policy by summarizing the points you made.
  • Signature: Include a signature or date line at the end of the policy to indicate when it was written and approved.
  • References: Include any documents, resources, or links to websites that were used in the policy.

There are obviously more things that you can include in the policy, but this should give you a good starting point. Think of what’s essential in your company's own individual context and include those details.

4. Reviewing policies

Once the policy is written, it's important to keep reviewing and revising it regularly. This helps ensure that the policy remains relevant and up-to-date with changes in regulations and customer needs.

To do this, you can conduct operational improvements , such as gap analysis, to identify gaps in the policy and see where improvements can be made. Again here, you should also seek feedback from stakeholders, as this will help ensure that their needs and concerns are taken into account.

Incorporate any changes based on feedback and compliance requirements, and don’t forget small things like updating the policy's header with the new version date. This will make it easier for everyone to know when the policy was last updated.

5. Use Scribe & Pages for procedure writing

Without efficient tools, policy writing can take way too much manual work. Cut it in half by capturing procedures that will inform your policies with Scribe.

Scribe and Pages provide features that can help streamline the process of creating and managing policies, from start to finish.

1. Scribe Writing up docs and how-to guides used to take up so much time, but not anymore! @ScribeHow creates auto-generated step-by-step guides, cutting down hours of work to minutes. It's a must-have tool if you're working solo or in a team. 👉 https://t.co/HL8WC7WBUs pic.twitter.com/Qmkrw4Uour — Nikki Siapno (@NikkiSiapno) January 12, 2023

With Scribe and Pages, you can easily create templates for policy development, share policies with stakeholders, automate document sharing, and more.

These tools also allow you to quickly and easily manage your policy revisions, ensuring that everyone involved is kept up-to-date on the latest version.

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Creating and maintaining effective policies is an important part of running a successful business. However, it can be difficult to know where to start.

By following the steps outlined above, you can create a compelling policy that meets all your needs and is easy for everyone to understand. If you want to speed things up — using Scribe and Pages can make everything so much easier.

By capturing your screen, Scribe turns your processes into step-by-step guides. And with Pages, you can format and create the actual policies. Combining these two tools make it easy for every team member to access and understand policies.

🆓 Steal these Free Policy and Procedure Templates you can use today!

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How to Write a Business Requirements Document (BRD)

ProjectManager

It’s easy to get lost in the weeds when you’re managing a project. There are day-to-day operations that the project manager obsesses over, but they also need to see the big picture. That’s why a business requirements document is so important.

To prove this point, let’s define what a business requirements document (BRD) is and what its components are. Plus, we’ll give you tips on how to write a better one before showing how project management software can make the process even more efficient.

What Is a Business Requirements Document?

A business requirements document offers an overview of what a business does and why it needs the project deliverable to be undertaken. It outlines the business solutions for project requirements that are necessary for the project to deliver value and becomes the foundation of the project’s life cycle.

The business requirements document highlights what the end result of the project should be. When a change request is introduced to the project, the business requirements document must be revised to reflect this change.

The main purpose of a BRD is to show what the system will look like from a business perspective. It includes both the business solution and the technical solution to the project. The business requirements document helps answer the question of what is needed for the business. It also answers how the project will be delivered and contains a prioritized list of features and business requirements that the delivered software, product or service must provide.

Think of the business requirements document as the defined steps you should follow to reach a result that serves both the customers and stakeholders for the delivered product, system or service. The project team is involved in this process to help determine how to implement the delivery of the project and fulfill what the business needs. Stakeholders are also involved and must agree on the plan before it’s implemented.

how to write up business rules

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Business Requirements Document Template

Use this free Business Requirements Document Template for Word to manage your projects better.

Business Requirements vs. Functional Requirements

It’s common to confuse business requirements with functional requirements. They’re both requirements, but they serve different purposes. To review, business requirements explain the final results of a business goal in the project and why the organization should initiate that project.

A business requirement isn’t about offering or proposing a solution, only defining the task at hand. This includes defining the short and long-term goals, the company vision and the scope of the business problem.

On the other hand, the functional requirement is about how a system needs to operate in order to achieve its business goal. It proposes subjective solutions based on the organization’s strengths and limitations as well as being technically focused. A functional requirement is also presented with a use case.

It’s not always easy to tell the difference between a business requirement and a functional requirement. Project activities can be both a business requirement and a functional requirement or even neither.

To accomplish this, you’ll need project management software that can organize tasks and connect the entire project team. ProjectManager is online project management software that delivers real-time data across multiple project views that lets everyone work how they want. Our interactive Gantt chart can be shared with teams and stakeholders as tasks are organized on a timeline. You can link dependent tasks, add milestones and filter for the critical path. Then, set a baseline and track your business requirements document in real time over the life cycle of the project. Get started with ProjectManager today for free.

ProjectManager's Gantt chart

What Should Be Included in a BRD?

Why should you create a business requirements document? It reduces the chances that your project will fail due to misalignment with business requirements and connects the organization’s business goals with the project. It brings stakeholders and the team together and saves costs that accrue due to change requests, training, etc.

You’ll want to create a business requirement document, and even though it’s an involved process, it can be broken down into seven key steps. They are as followed.

1. Executive Summary

To begin, you’ll need to create an executive summary that provides an overview of the organization and the challenges facing the business. You’ll explain the issues and what the organization is trying to achieve to ensure everyone is on the same page. This section should be short, like an elevator pitch, summarizing the rest of the business requirements document.

2. Project Objectives

After summarizing the issue you plan to address in the project, you’ll want to clearly define the project’s objective . This helps define the project phases, creates a way to identify solutions for the requirements of the business and the customer, gains consensus from stakeholders and the project team and describes how you arrived at the objectives.

3. Project Scope

The project scope should define in detail what is covered in the project and what would make it run out of scope. This creates a clear boundary for the project and allows stakeholders and teams to agree on the business goals and high-level outcomes. Note what problems are being addressed, the boundaries for implementing the project and the expected return on investment (ROI).

4. Business Requirements

Here you’ll want to list the business requirements or critical activities that must be completed to meet the organization’s objectives. These business requirements should meet both stakeholder and customer needs. This can include a process that must be completed, a piece of data that is needed for the process or a business rule that governs that process and data.

Related: Free Requirements Gathering Template for Word

5. Key Stakeholders

Now you’ll want to identify and list the key stakeholders in the project. Once you have that list, assign roles and responsibilities to each. These might be people outside of your department so you should define their role in the success of the project. This information needs to be distributed in order for everyone to know what’s expected of them in the project. You can even use this section to assign tasks.

6. Project Constraints

At this point, you’ll want to explore the project constraints . Define the limitations of the project and share those with the project team so they know of any obstacles earlier than later. In order for them to clear those hurdles, you’ll want to provide any necessary training or allocate resources to help the project stay on track.

7. Cost-Benefit Analysis

You’ll also want to do a cost-benefit analysis to determine if the costs associated with the project are worth the benefits you’ll get. This requires first determining the associated costs of the project, such as upfront development costs, unexpected costs, future operating costs and tangible and intangible costs. You’ll also need to figure out what benefits derive from the project.

3 Key Tips to Write a Business Requirements Document

As noted, the best way to begin writing a business requirements document is to meet with your stakeholders and team to get a clear picture of their expectations. But that’s only the start. There are many other best practices for writing a BRD. Here are a few.

1. Start With Thorough Requirements Gathering

Requirements gathering is the process of identifying all requirements necessary for the project. That means everything from the start of the project to the end of the project. You’ll want to address the length of the project, who will be involved and what risks are possible.

2. Differentiate Between Business Requirements and Functional Requirements

Remember, business requirements are what needs to be done, such as the project goals, and why that’s important for the organization. Functional requirements are how the processes, be they a system or person, need to work in order to achieve the project goals.

3. Use a Stakeholder Matrix

An important aspect of any business requirements document is identifying stakeholders . In fact, this should be done early in the process and a stakeholder matrix can help you analyze those stakeholders. It helps you understand the needs and expectations of your stakeholder in terms of their power or influence and the level of interest in your project.

ProjectManager Helps You Track Business Requirements

Once you have your business requirements document, the real work begins. There are many project management software tools that can help you plan and measure your project. ProjectManager is unique in that it adds real-time tracking to make sure your business requirements are being met.

Monitor Project With Real-Time Dashboards

When you make your plan on our interactive Gantt charts , the last thing is to set the baseline. Now you can track project variance across many of our features. Keeping projects on time and under budget is critical to meeting the business requirements of your stakeholders. To get a high-level view of the project, simply toggle to the dashboard where you can view six project metrics. Get live data on costs to tasks, and workload to health, all in easy-to-read graphs and charts. Unlike other tools that offer dashboards, you don’t have to waste time setting ours up. It’s plug-and-play.

Share Progress Reports With Stakeholders

Being able to view your progress and performance in real time is important for stakeholders and project managers. We have customizable reports that can be generated with a keystroke. As stakeholders don’t need all of the details, filters make it easy to focus on only the data they need to see. Then, easily share the report as a PDF or print it out, whichever delivery method your stakeholders prefer. We have reports on status and portfolio status, time, cost, timesheets and more. It’s a great way for project managers to dig into the data and keep stakeholders updated.

ProjectManager's status report filter

ProjectManager is award-winning project management software that helps you plan, schedule and track your project in real time. Use our tool to make sure you’re meeting all the business requirements in your BRD. Our collaborative platform makes it easy to connect with teams to help them work more productively and stakeholders to keep them up-to-date. Get started with ProjectManager today for free.

Click here to browse ProjectManager's free templates

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IRS begins audits of corporate jet usage; part of larger effort to ensure high-income groups don’t fly under the radar on tax responsibilities

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IR-2024-46, Feb. 21, 2024

WASHINGTON — Using Inflation Reduction Act funding and as part of ongoing efforts to improve tax compliance in high-income categories, the Internal Revenue Service announced today plans to begin dozens of audits on business aircraft involving personal use.

The audits will be focused on aircraft usage by large corporations, large partnerships and high-income taxpayers and whether for tax purposes the use of jets is being properly allocated between business and personal reasons.

The IRS will be using advanced analytics and resources from the Inflation Reduction Act to more closely examine this area, which has not been closely scrutinized during the past decade as agency resources fell sharply. The number of audits related to aircraft usage could increase in the future following initial results and as the IRS continues hiring additional examiners.

“During tax season, millions of people are doing the right thing by filing and paying their taxes, and they should have confidence that everyone is also following the law,” said IRS Commissioner Danny Werfel. “Personal use of corporate jets and other aircraft by executives and others have tax implications, and it’s a complex area where IRS work has been stretched thin. With expanded resources, IRS work in this area will take off. These aircraft audits will help ensure high-income groups aren’t flying under the radar with their tax responsibilities.”

Business aircraft are often used for both business and personal reasons by officers, executives, other employees, shareholders and partners. In general, the tax code passed by Congress allows a business deduction for expenses of maintaining an asset, such as a corporate jet, if that asset is utilized for a business purpose. However, the use of a company aircraft must be allocated between business use and personal use. This is a complex area of tax law, and record-keeping can be challenging.

For someone such as an executive using the company jet for personal travel, the amount of personal usage impacts eligibility for certain business deductions. Use of the company jet for personal travel typically results in income inclusion by the individual using the jet for personal travel and could also impact the business’s eligibility to deduct costs related to the personal travel.

The examination of corporate jet usage is part of the IRS Large Business and International division’s “campaign” program. Campaigns apply different compliance streams to help address areas with a high risk of non-compliance. These efforts include issue-focused examinations, taxpayer outreach and education, tax form changes and focusing on particular issues that present a high risk of noncompliance.

The IRS will begin conducting examinations in the near future as part of the agency’s commitment to ensuring fairness in tax administration.

This is part of a larger effort  the IRS is taking to ensure large corporate, large partnerships and high-income individual filers pay the taxes they owe. Prior to the Inflation Reduction Act, more than a decade of budget cuts prevented the IRS from keeping pace with the increasingly complicated set of tools that the wealthiest taxpayers use to shelter or manipulate their income to avoid taxes. The IRS is now taking swift and aggressive action to close this gap.

In addition to work on corporate jets, the IRS has a variety of efforts underway to improve tax compliance in complex, overlooked high-dollar areas where the agency did not have adequate resources prior to Inflation Reduction Act funding.

For example, the IRS is continuing to pursue millionaires that have not paid hundreds of millions of dollars in tax debt. The IRS has already collected $482 million in ongoing efforts to recoup taxes owed by 1,600 millionaires with action continuing in this area. Elsewhere, the IRS is pursuing multi-million-dollar partnership balance sheet discrepancies, ramping up audits of more than 75 of the largest partnerships using artificial intelligence (AI) as well as other areas .

"The IRS continues to increase scrutiny on high-income taxpayers as we work to reverse the historic low audit rates and limited focus that the wealthiest individuals and organizations faced in the years that predated the Inflation Reduction Act,” Werfel said. “We are adding staff and technology to ensure that the taxpayers with the highest income, including partnerships, large corporations and millionaires and billionaires, pay what is legally owed under federal law. The IRS will have more announcements to make in this important area."

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COMMENTS

  1. How to write business rules in 7 simple steps

    Step #3: Lay out a clear, plain-language description of each rule that also highlights its purpose. Step #4: Include an example of your rule in action as it pertains to your business (for best results, you may want to use a flowchart diagram or visual map to lay out your rule graphically). Step #5: Note the source (person, department, or ...

  2. What Is a Business Rule? (With Types and Examples)

    Here are the general steps you can take to write a business rule: 1. Name the rules. Assign a title for each business rule. A title is a short description between three to five words that can help readers understand what the rule means. For example, a business rule that states a time to arrive can be "arrive on time."

  3. How to Write Business Rules

    Name - Give each business rule a unique identifier. Make it meaningful to the reader. Description - Describe the purpose of the business rule. Use active verbs, remove ambiguous text and strive for clarity. Use flowcharts or UML diagrams to describe complex rules. Example - If possible, include an example of the rule.

  4. How to Write Business Rules

    Business rules can add up fast. Learn practical tips on how to write business rules that are easy to understand and manage. ... Note, the exact syntax you use for writing business rules will depend on the rules engine that you use. While there is no universal business rules language, there are common features (and pitfalls) that we will address

  5. What are business rules?

    Write rules that define each possible scenario and the decision that should be made. Consider your business goals. Business rules are low-level and granular, but they exist to support company objectives. Each time you write down a business rule, make sure that it has a purpose in line with your overall strategy. Document everything

  6. 10 Examples of Business Rules That Make Work More Efficient

    10 Examples of Business Rules. Conditionally Routing Documents. Auto-Populating Fields in a Form. Applying Customer Discounts. Creating Dynamic Picklist Options. Routing Customer Service Tickets. Assigning Company Assets. Performing Calculations Automatically. Validating Data Fields.

  7. How to write business rules in 7 simple steps

    Step #4: Include to example of our rule in promotional as it pertains to is business (for best results, you may want to use a flowchart diagram or visual view up lay outside the rule graphically). Step #5 : Note of reference (person, department, or stakeholder) a anywhere rule for easier follow-up and clarification.

  8. Business Rules: The Ultimate Guide

    Essentially, business rules are guidelines that outline how organizations run their affairs and make decisions. These rules usually regulate business behavior and structure. Organizations use business rules to specify how their activities relate to their operations. Business rules help organizations to work steadily towards their goals.

  9. The 11 Secrets of Business Rules Success

    The decisions might: Involve numerous rules. Have rules that change frequently. Require quick changes to meet short time-to-market windows. Have rules that embody business domain knowledge best maintained by business people. Involve symbolic reasoning, be complex or involve rules that interact in complex ways.

  10. What are business rules? Your introductory guide

    Business rules are a set of principles, directions, or instructions that describe - and sometimes limit or restrict - certain business activities. Because their main purpose is to advance efficient, consistent decisions, they're mostly set in place to ensure better business operations can happen. In general, business rules:

  11. How to Document Business Rules: A Comprehensive Guide

    Conclusion. The key to "how to document business rules" successfully is to use concise language and atomic structure, visually represent with UML diagrams, document user interfaces through wireframes, and validate decisions using simulation technology. Doing so can help entrepreneurs create a scalable system that streamlines processes/policies ...

  12. How to Write Business Rules for Agile Projects

    To create business rules, first specify the vocabulary that is required to express the policy, then represent the logic of the business policy as "if-then" statements. Source: IBM. The typical structure of a business rule is as follows: Constraint/Action: Define the business rule using a single sentence as a declaration.Each business rule ...

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  14. What Are Business Rules (and How to Implement Them)

    You can write these rules down in a handbook for employees or automate them using workflow automation software. The software often includes a business rules engine that guides decision-making based on preset rules. ... To speed things up, one business rule you can create is to route invoices to a senior executive only if their value is $10,000 ...

  15. What Are Business Rules and How Can People Apply Them?

    A business rule is a regulation that restricts or defines the actions of an organization's employees, contractors, and executives. It guides behavior and lets people know when, why, where, and how to complete specific tasks. Companies can enforce rules informally or formally. They can record them digitally or on paper, and business rules can ...

  16. Business Rules in 2023: Benefits, Examples & Best Practices

    A business rule is an instruction or a directive that describes, defines, or restricts how a certain business activity or task should be performed. Such rules assist employees in business decision-making under specific conditions. They're often expressed with conditional logic statements such as "If-then", "When", "Only if", "If ...

  17. What Are Business Rules and What Is Their Importance?

    Business rules are now accepted as an underlying requirement of most organizations. They are often used to help prepare system flows or procedural flow charts that outline how a business will operate. When business rules are made right, they provide efficiency, consistency, predictability, and benefits. They also ensure that work can continue ...

  18. 10 Examples of Business Rules and Logic

    Assigning assets to new employees. Home loan interest rate business rules. Suspicious transaction triggers. Generating student ID numbers. Declined applications based on scores. Auto calculating shipping rates. Purchase requests by amount. Business rules and logic play a critical role in the efficient operation of an organization.

  19. How to Create Effective Business Rules: Interview with Graham Witt

    When tackling Data Quality you need to understand and manage the thousands of business rules that can exist across your organisation. To help you understand some of the core methods involved we asked Graham Witt, author of "Writing Effective Business Rules", to share a range of practical tips and techniques to learn this vital skill. Dylan ...

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    Be clear. When writing policies, clarity should be your number one priority. The goal is to ensure that everyone understands the policy, which means using simple language and avoiding long, wordy sentences. As a baseline for all of your policies, avoid jargon or technical terms that may be difficult to understand. 4.

  21. What is a business rule? (With types and examples)

    Business regulations can apply to any aspect of a company, such as the operational processes or guidelines for staff. It provides staff with a framework to work from, which means there's no requirement to wait for instructions from a manager to work. This can improve efficiency across the company and save staff time.

  22. How to Write a Business Requirements Document (BRD)

    These business requirements should meet both stakeholder and customer needs. This can include a process that must be completed, a piece of data that is needed for the process or a business rule that governs that process and data. Related: Free Requirements Gathering Template for Word. 5. Key Stakeholders.

  23. How To Write A Business Plan (2024 Guide)

    Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...

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    IR-2024-45, Feb. 21, 2024. WASHINGTON — During the busiest time of the tax filing season, the Internal Revenue Service kicked off its 2024 Tax Time Guide series to help remind taxpayers of key items they'll need to file a 2023 tax return. As part of its four-part, weekly Tax Time Guide series, the IRS continues to provide new and updated ...

  26. IRS begins audits of corporate jet usage; part of larger effort to

    Business aircraft are often used for both business and personal reasons by officers, executives, other employees, shareholders and partners. In general, the tax code passed by Congress allows a business deduction for expenses of maintaining an asset, such as a corporate jet, if that asset is utilized for a business purpose.

  27. The mathematical muddle created by leap years

    But there are exceptions to this rule. For example, at the turn of every century we miss a leap year. Even though the year is divisible by four, we don't add a leap day in the years that end in 00.