What is a Business Day?

Business days are a time unit that is widely used to describe any day during which business operations are carried out. This is usually Monday through Friday, 9 a.m. to five p.m. (local time), and does not include weekends or public holidays. Any day that the financial markets are open to trading is considered a business day in the securities industry.

Understanding Business Days

When depositing a check, consumers often face the problem of a business-day delay. It can take up to two to three business days for a check that is larger than the one being deposited to clear. This does not include weekends and observed holidays which could increase the amount of time a depositor must wait before they can access the funds.

International transactions can be complicated for companies and individuals. This is due to differences in public holidays.

KEY TAKEAWAYS

• The hours during which normal business operations are conducted is called a business day.
• Business days are normally Monday through Friday from 9 a.m. until 5 p.m. (excluding holidays).
• Customers often face business days when they need to settle or clear financial transactions or deliver goods or services.
• International transactions should be considered.

Although most countries work 40 hours per week, there are enough variations to ensure that international businessmen should confirm the days of business in each country. When doing business with Middle Eastern nations, for example, remember that most of them have a Sunday-through-Thursday work week. Some countries, such as India, Mexico, and Columbia, have a Monday-through-Saturday work week.

When a delivery or service is to be performed, business days are often used. A piece of mail might be guaranteed to arrive within three business days. This can be a big difference. A package that is guaranteed to arrive within four business days may not arrive until seven working days after it has been sent if the weekend falls on a weekend.

Take Note

Multinational entities may also need to consider other business day considerations when they engage in international transactions. These transactions typically take longer business days than routine domestic transactions. This is especially true if different workdays are used.

Different financial instruments and contracts have different settlement times. Some may require three days or T+1 (in financial parlance) while others might need up to three days. Market sophistication and liquidity are often factors that determine the settlement time period for transactions.

Many aspects of the business day have been blurred by technological advances in communication and technology. Businesses and individuals can conduct business virtually 24/7 via electronic means.