What Are Back Office Services?

Posted by Ruby Sahiwal

4-minute read (800 words)

If you recently launched a company, you may have seen information about how to handle your back office services. But in some cases, entrepreneurs aren’t sure what this term means, since offices don’t necessarily have a front and back area in these days of open office layouts and remote work. Check out the following descriptions to determine what back offices services are, and whether you might need them at your company.

Essential to Your Business’ Function

Back office services are essential to the operation of your business, but they aren’t typically client-facing. For instance, your receptionist, your sales team and your customer service staff members are usually considered front office because they face clients directly. On the other hand, your accountant, human resources staff, payroll employees and IT managers are considered back office staff because they don’t interact directly with customers, but they’re still essential to how your company operates.

In many cases, it’s the people in the back office who provide the resources for those in the front office to thrive. If a customer asks a sales rep at your company whether it’s possible for them to get a particular part in 24 hours, the sales rep may not know the answer. However, someone in the back office, such as your inventory management rep or your supply chain expert, can help the sales rep find the part and get it to the client quickly. This is an example of how the front and back office staff members work together to support your business’ operations.

Here’s a look at several of the back-office services that are essential to maintaining a company.

Accounting, Tax and Finance

When you think about all the bills your company generates and pays in a week, the number may be dizzying. Your back office staff works to ensure that your accounts payable, invoicing, cash flow management and year-end reporting are all integrated into the business so you never miss a payment and that you follow up on all the money owed to the business. They also confirm that you are meeting regulatory guidelines when it comes to how your ledgers must be maintained.

In addition, the accounting department will ensure that your taxes are filed on time and in accordance with all laws, while maximizing every possible deduction that you’re allowed to claim.

Your finance team will ensure that your business is navigating its strategic financial plans appropriately. They’ll perform all forecasting and planning, cash flow analyses and management reporting so your business will be able to benchmark where it is and where it’s going.

Insurance

Once you build a business, you want to make sure you can keep it protected, and that’s where insurance staff members are essential. Your insurance experts will ensure that you have the commercial policies in place that will keep you in line with local requirements (such as worker’s compensation) and that will keep you protected from lawsuits (such as business liability insurance). The peace of mind you’ll get by knowing your business is well covered is very important to every entrepreneur.

HR, Benefits, Recruiting and Payroll

Once your business has employees or contractors in place, then it’s time to ensure that your human resources, benefits and payroll policies are perfectly managed. No business can afford to run afoul of wage and labor laws, and companies certainly can’t forget to pay staff members. Your back office staff members will ensure that your HR and payroll processes run smoothly and that your employees are consistently happy with the level of service delivered.

In addition, your recruiters will ensure that your business is well staffed, bringing on the right people and onboarding them so they’re well trained and ready for a long-term career with your company.

IT and TechOps

Your tech department might consist of one data entry support staff member, or it may go all the way to a 100-plus-person coding department. These staff members are essential to ensuring that your digital operations continue running smoothly and that you (and your customers) don’t encounter any glitches when navigating your platforms, programs, apps or websites. In addition, members of this department can provide IT support to your internal staff members, confirm that your cybersecurity programs are strong and maintain the integrity of all storage programs, both physically and in the cloud.

Although every business will agree that back office services are essential to operation, not every company has the staff on hand to provide these functions. In some cases, entrepreneurs choose to outsource these back office positions so they can leave the responsibility to offsite experts. This often results in saving time and money because the business only pays for the support it needs, rather than having full time employees on staff to take care of these responsibilities.

If you've recently launched a business, take a look at which back office functions you've got in place and which you may need in the future to ensure that your company thrives.

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