Business Rules vs. Custom Code: Which Approach is Right for You?

Introduction

Every organization using Microsoft Dynamics 365 Business Central eventually faces the same decision: how should we implement custom business logic? You need validations that go beyond standard functionality. You need approval workflows specific to your business processes. You need automatic calculations, data quality controls, and integration logic unique to your operations.

Two fundamental approaches exist: custom AL code development and business rules management. Each has strengths, limitations, ideal use cases, and total cost implications. This comprehensive guide helps you understand both approaches, evaluate trade-offs, and make informed decisions about which path serves your organization best.

The answer isn't always "one or the other." Many organizations benefit from a hybrid approach—using custom code where it excels and business rules where they excel. Understanding when to use each approach is the key to optimizing your Business Central investment.

Understanding the Two Approaches

Custom AL Code Development

Custom AL code means writing program code in Microsoft's AL language to extend Business Central functionality. Developers create codeunits, table extensions, page extensions, and event subscribers that execute when specific conditions occur.

Example: Enforcing credit limits with custom code

[EventSubscriber(ObjectType::Table, Database::"Sales Header", 'OnBeforeInsertEvent', '', false, false)]
local procedure CheckCreditLimit(var Rec: Record "Sales Header")
var
    Customer: Record Customer;
    CreditLimitExceeded: Boolean;
begin
    if Rec."Document Type" <> Rec."Document Type"::Order then
        exit;
        
    if Customer.Get(Rec."Sell-to Customer No.") then begin
        if (Customer."Balance (LCY)" + Rec."Amount Including VAT") > Customer."Credit Limit (LCY)" then
            Error('Credit limit exceeded. Customer %1 has credit limit %2 but current balance %3 plus order %4 exceeds limit.',
                Customer.Name,
                Customer."Credit Limit (LCY)",
                Customer."Balance (LCY)",
                Rec."Amount Including VAT");
    end;
end;

This code subscribes to the Sales Header insert event and prevents order creation when credit limits would be exceeded.

Business Rules Management

Business rules means configuring logic through a visual, no-code interface. Business analysts define rules by selecting tables, entering formulas, and configuring actions without writing program code.

Example: Enforcing credit limits with business rules

Rule Set: SALES-CREDIT-CHECK
Trigger Table: Sales Header (36)
Trigger Type: Before Insert

Scenario 1: [36:1] is 'Order'  // Document Type is Order

Rule 1: Credit Limit Validation
  Condition: {[36:109] + [18:61]} is >[18:59]
  // Order Amount + Customer Balance > Credit Limit
  
  Action: Error Message
  Text: "Credit limit exceeded. Customer [18:2] has credit limit [18:59] but current balance [18:61] plus order [36:109]

This rule configuration achieves the same result without writing code.

Detailed Comparison Matrix

Implementation Speed

Custom Code:

• Requirements gathering and specification: 2-4 hours

• Development: 4-8 hours

• Unit testing: 2-4 hours

• Integration testing: 4-8 hours

• Deployment: 1-2 hours

• Total: 2-4 days for a medium-complexity business rule

• Skills required: AL programming, Business Central architecture, development tools

Business Rules:

• Requirements gathering: 1-2 hours

• Rule configuration: 30 minutes - 2 hours

• Testing: 30 minutes - 2 hours

• Activation: Immediate

• Total: 4-8 hours for the same rule

• Skills required: Business Central user knowledge, basic logic understanding

Winner: Business Rules (5-10x faster implementation)

Modification Speed

Custom Code:

• Locate relevant code: 30 minutes - 2 hours

• Understand existing logic: 30 minutes - 4 hours

• Modify code: 30 minutes - 2 hours

• Test changes: 1-4 hours

• Deploy update: 1-2 hours

• Total: 1-3 days for a typical modification

• Risk: Code changes can introduce regressions

Business Rules:

• Locate relevant rule: 2-5 minutes

• Understand existing rule: 2-10 minutes (self-documenting)

• Modify rule: 5-30 minutes

• Test changes: 15-60 minutes

• Activate: Immediate

• Total: 30 minutes - 2 hours for typical modification

• Risk: Minimal—rules test in isolation, activation is instant, rollback is instant

Winner: Business Rules (10-20x faster modification)

Cost per Implementation

Custom Code (typical medium-complexity business rule):

• Senior developer: 16 hours @ $150/hour = $2,400

• QA testing: 8 hours @ $100/hour = $800

• Project management: 4 hours @ $125/hour = $500

• Deployment overhead: $300

• Total: $4,000 per rule implementation

Business Rules (same complexity):

• Business analyst: 4 hours @ $75/hour = $300

• Testing: 2 hours @ $75/hour = $150

• Total: $450 per rule implementation

Cost difference: $3,550 savings per rule (89% reduction)

For 10 business rules: $35,500 savings For 50 business rules: $177,500 savings

Winner: Business Rules (significant cost advantage)

Complexity Handling

Custom Code:

• Strengths:

  • Handles any level of complexity

  • Can implement sophisticated algorithms

  • Access to entire Business Central codebase

  • Can integrate with external systems at deep levels

  • Optimal performance for complex calculations

• Ideal for:

  • Complex mathematical algorithms

  • Sophisticated data transformations

  • Deep integration requirements

  • Multi-step processes with complex state management

  • Performance-critical calculations

Business Rules:

• Strengths:

  • Excellent for conditional logic

  • Well-suited for data validation

  • Good for approval routing

  • Handles multi-table comparisons effectively

  • Sufficient for 80% of typical business logic needs

• Ideal for:

  • Conditional validations

  • Threshold-based approvals

  • Required field enforcement

  • Credit/risk checks

  • Pattern matching and data quality

  • Automatic field population based on conditions

Winner: Depends on complexity—code for sophisticated algorithms, rules for conditional logic

Maintainability

Custom Code:

• Challenges:

  • Requires developer expertise to maintain

  • Knowledge concentrated in developers

  • Knowledge loss when developers leave

  • Documentation often becomes outdated

  • Business users can't read or understand code

  • Finding specific logic requires code search

• Maintenance costs: High ongoing developer time

Business Rules:

• Advantages:

  • Business users can understand rules without technical expertise

  • Self-documenting (configuration IS the documentation)

  • Transferable between rule authors

  • Central catalog of all rules

  • Visual inspection shows what's implemented

  • No special tools required to view rules

• Maintenance costs: Low—business analyst time occasionally

Winner: Business Rules (dramatically better maintainability)

Testability

Custom Code:

• Requires comprehensive regression testing

• Code changes can have unintended side effects

• Full test suite execution needed for each change

• Test automation requires investment

• Testing requires technical expertise

• Deployment risk with every code change

Business Rules:

• Rules test in isolation

• Changes don't affect other rules

• No compilation or deployment risk

• Business users can test rules

• Instant rollback if issues found

• Can disable problematic rules immediately without deployment

Winner: Business Rules (safer, faster testing)

Performance

Custom Code:

• Compiled to native code

• Optimized by AL compiler

• Minimal runtime overhead

• Can be optimized for specific scenarios

• Ideal for high-volume batch processing

Business Rules:

• Interpreted at runtime

• Small overhead for formula evaluation

• Scenarios provide performance optimization

• Adequate for transactional processing

• May not be ideal for processing millions of records

Performance comparison:

• Single transaction evaluation: Negligible difference

• High-volume batch: Custom code may be faster

• Interactive transactions: Both perform well

Winner: Slight advantage to custom code for high-volume batch operations

Transparency and Auditability

Custom Code:

• Logic hidden in compiled code

• Requires code review to understand implementation

• Audit trail limited to what developer explicitly logs

• Demonstrating policy enforcement requires code analysis

• Business users can't verify implementation

Business Rules:

• Rules visible to business users

• Plain-language configuration shows what's enforced

• Complete audit log of every rule execution

• Easy to demonstrate policy enforcement

• Compliance documentation built-in

Winner: Business Rules (far superior transparency)

Version Control and Deployment

Custom Code:

• Source control in git or Azure DevOps

• Formal deployment processes

• Environment progression (dev → test → prod)

• Deployment can fail or cause issues

• Rollback requires redeployment

Business Rules:

• Rules stored in Business Central database

• Activation/deactivation instant

• Can test in sandbox before production

• No deployment failures

• Rollback is instant (disable rule)

Winner: Business Rules (simpler deployment, safer rollback)

Skills Required

Custom Code:

• AL programming language expertise

• Business Central architecture knowledge

• Visual Studio Code and development tools

• Understanding of event subscribers

• Knowledge of Business Central table structure

• Debugging and troubleshooting skills

Typical skill acquisition time: 3-6 months for Business Central developers

Business Rules:

• Business Central user knowledge

• Basic logical thinking

• Understanding of formulas (similar to Excel)

• Knowledge of business requirements

• No programming required

Typical skill acquisition time: 1-2 days for business analysts

Winner: Business Rules (much lower skill barrier)

When to Use Custom Code

Despite business rules' advantages, custom code remains the right choice for specific scenarios:

1. Complex Algorithms and Calculations

Example: Calculating commissions based on complex tiered structures, product mix, customer tenure, regional factors, and performance bonuses.

Why code is better: Complex algorithms with multiple nested conditions, loops, and state management are more naturally expressed in code than in rule formulas.

2. Deep System Integration

Example: Real-time integration with a third-party inventory optimization system requiring bidirectional data synchronization, complex error handling, and retry logic.

Why code is better: Integration requiring sophisticated communication patterns, state management, and error recovery benefits from code's full capabilities.

3. High-Volume Batch Processing

Example: End-of-month processing that calculates depreciation for 100,000 fixed assets using complex formulas.

Why code is better: When processing millions of records in batch, compiled code's performance advantage becomes significant.

4. User Interface Modifications

Example: Creating a custom page with unique layout, specialized controls, and interactive behaviors.

Why code is better: UI modifications require code—business rules don't create pages or modify page layouts.

5. New Business Central Features

Example: Adding entirely new functionality like a custom scheduling engine or advanced analytics module.

Why code is better: Building new features requires code. Business rules extend existing features but don't create fundamentally new capabilities.

6. Background Processes and Jobs

Example: Nightly automated processes that generate reports, send batch emails, synchronize data with external systems.

Why code is better: Scheduled background processes with complex orchestration are better suited to code.

When to Use Business Rules

Business rules excel for common business logic scenarios:

1. Data Validation

Examples:

• "Customer email address must be in valid format"

• "Order quantity must be positive"

• "Ship date must be in the future"

• "Customer tax ID must be provided for EU customers"

Why rules are better: Validation logic changes frequently, needs business user control, benefits from instant modification.

2. Threshold-Based Approvals

Examples:

• "Orders over $50,000 require VP approval"

• "Discounts over 15% need manager approval"

• "Purchase orders over $25,000 require dual approval"

• "Journal entries over $100,000 need controller review"

Why rules are better: Approval thresholds change with business conditions, policies, and organizational structure.

3. Credit and Risk Management

Examples:

• "Block orders exceeding customer credit limits"

• "Warn when customer balance reaches 80% of credit limit"

• "Require prepayment for customers with overdue invoices"

• "Flag high-risk transactions for review"

Why rules are better: Credit policies adjust based on economic conditions, risk tolerance, and business strategy.

4. Automatic Field Population

Examples:

• "Assign payment terms based on customer country"

• "Set default shipping method by customer category"

• "Populate salesperson based on customer territory"

• "Auto-assign GL accounts based on item category"

Why rules are better: Default value logic varies by region, customer type, and business policy.

5. Required Field Enforcement

Examples:

• "PO number required for customers in government segment"

• "Requested delivery date required for B2B orders"

• "Project code required for service items"

• "License number required for controlled substance sales"

Why rules are better: Required fields vary by customer type, product category, and regulatory requirements.

6. Compliance and Regulatory Requirements

Examples:

• "Verify license before selling age-restricted products"

• "Block transactions with sanctioned countries"

• "Enforce transaction limits for cash sales (AML)"

• "Require additional documentation for international shipments"

Why rules are better: Regulations change with specific effective dates requiring immediate implementation.

The Hybrid Approach: Best of Both Worlds

Most organizations benefit from using both approaches strategically:

Strategic Architecture

Custom Code Foundation:

• Core business processes

• Complex algorithms

• Deep integrations

• New feature development

• High-volume batch processing

Business Rules Layer:

• Business policy enforcement

• Data validations

• Approval routing

• Credit/risk checks

• Compliance requirements

• Conditional logic

Example: Sales Order Processing

Custom Code Handles:

• Inventory allocation algorithms

• Complex pricing calculations

• Integration with warehouse management system

• Document printing and formatting

• Background posting processes

Business Rules Handle:

• Credit limit validation

• Required field enforcement

• Approval routing based on amount/discount

• Customer-specific validations

• Order completeness checks

Migration Strategy

Phase 1: Use custom code for everything (current state for many organizations)

Phase 2: Implement business rules for new policy requirements while leaving existing custom code unchanged

Phase 3: As custom code requires updates or maintenance, evaluate whether to refactor as business rules

Phase 4: Optimize architecture with strategic mix of code (for complexity) and rules (for policies)

Total Cost of Ownership Analysis

5-Year TCO Comparison: Managing 30 Business Rules

Scenario: Organization needs 30 distinct business rules for validations, approvals, and compliance

Custom Code Approach

Year 1 (Initial Development):

• Development: 30 rules × $4,000 = $120,000

• Testing: $20,000

• Deployment: $5,000

• Year 1 Total: $145,000

Years 2-5 (Maintenance):

• Modifications: 20 changes/year × $1,500 = $30,000/year

• Enhancements: 5 new rules/year × $4,000 = $20,000/year

• Bug fixes and support: $10,000/year

• Annual maintenance: $60,000

• Years 2-5 Total: $240,000

5-Year TCO Custom Code: $385,000

Business Rules Approach

Year 1 (Initial Implementation):

• QUALIA Rule Engine license: $15,000

• Initial rule configuration: 30 rules × $450 = $13,500

• Training: $3,000

• Year 1 Total: $31,500

Years 2-5 (Maintenance):

• Annual license: $5,000/year

• Modifications: 20 changes/year × $150 = $3,000/year

• Enhancements: 5 new rules/year × $450 = $2,250/year

• Annual costs: $10,250

• Years 2-5 Total: $41,000

5-Year TCO Business Rules: $72,500

Total 5-Year Savings: $312,500 (81% reduction)

ROI Calculation

Investment in Rules Engine: $31,500 5-Year Savings: $312,500 Net Return: $281,000 ROI: 892% Payback Period: 3.7 months

Decision Framework

Use this framework to evaluate which approach suits specific requirements:

Custom Code Score

Give 1 point for each YES:

• Requires complex algorithms or calculations

• Involves deep system integration

• Processes very high data volumes (millions of records)

• Requires new UI components or pages

• Implements entirely new Business Central functionality

• Needs optimal performance for batch processing

• Changes infrequently (stable for years)

• Requires sophisticated state management

Score 5+: Custom code likely better

Business Rules Score

Give 1 point for each YES:

• Primarily conditional logic and validations

• Changes frequently (monthly or more)

• Needs business user control and modification

• Threshold-based or policy-driven

• Compliance or regulatory requirement

• Needs immediate implementation capability

• Requires complete audit trail

• Should be visible to business users

Score 5+: Business rules likely better

Both Approaches Score

Give 1 point for each YES:

• Part is complex algorithm, part is conditional logic

• Core process needs code, policies need rules

• Some stable requirements, some changing frequently

• Mix of batch processing and transactional validation

Score 3+: Hybrid approach likely best

Common Myths and Misconceptions

Myth 1: "Business rules are less powerful than code"

Reality: Business rules handle 80% of typical business logic requirements effectively. They're not designed to replace all code, but for conditional logic, validations, and policy enforcement, they're equally capable and more maintainable.

Myth 2: "Only non-technical users benefit from business rules"

Reality: Developers also benefit—they can focus on complex challenges rather than trivial policy adjustments. Business rules reduce maintenance burden for development teams.

Myth 3: "Custom code provides better performance"

Reality: For individual transaction processing (the vast majority of Business Central operations), performance difference is negligible. For batch operations on millions of records, code has an advantage.

Myth 4: "Business rules mean loss of control"

Reality: Business rules are governed through permissions and approval processes just like any other Business Central capability. IT retains architectural control while business gains policy control.

Myth 5: "You must choose one approach for everything"

Reality: The most effective strategy uses both approaches where each excels. This isn't either/or—it's both/and.

Conclusion

The choice between custom code and business rules isn't about which is "better" in absolute terms—it's about which approach best fits specific requirements.

Custom code excels when you need complex algorithms, deep integrations, high-volume batch performance, new UI components, or entirely new functionality.

Business rules excel when you need conditional validations, policy enforcement, threshold-based approvals, data quality controls, or compliance requirements—especially when these change frequently.

The hybrid approach leverages each method's strengths: custom code for complex stable processes, business rules for dynamic policies and validations.

For most Business Central organizations, the optimal architecture includes both:

• Custom code forming a stable foundation for core processes

• Business rules providing an agile policy layer that business users control

This combination delivers the best of both worlds: the power and flexibility of code where needed, the agility and maintainability of rules where appropriate.

Action Items:

1. Inventory your current custom code: Identify which logic could be better managed as business rules

2. Categorize requirements: Determine which need code, which need rules, which need both

3. Calculate your TCO: Compare custom code costs vs. business rules for your specific situation

4. Pilot the hybrid approach: Implement new policies as rules while maintaining existing code

5. Measure results: Track implementation speed, modification frequency, and cost savings

Related Reading:

• What is Business Rules Management and Why Your Business Needs It

• 5 Signs Your Business Central Environment Needs a Rules Engine

• The ROI of Business Rules Automation: A Financial Analysis Framework

• How to Implement Credit Limit Validation in 10 Minutes (Business Rules Example)