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Back office support refers to the non-customer facing part of a business responsible for running it. Accounting and IT departments are almost always part of the back office, while sales departments can exist in a gray zone between front and back office. Different businesses have different definitions of what constitutes back office support.
Back office support refers to the part of a business that is responsible for running it rather than actually working with customers or making a profit. This is an old term referring to a time when it was common to have a showroom and sales area at the front of a store and accounting, manufacturing and administration areas at the back. Over time, this common design was replaced by all but the very small companies, but the term remained behind. Back office support is the opposite of front office work which refers to the most profitable part of a company.
Different businesses have different definitions of what constitutes back office support. In general, if one part of the business deals directly with customers, it’s at the front desk, and if not, at the back. In some companies, the definition is a little different; the parts of the company that really make money are in the front office and the parts that are not supported in the office. Both definitions are valid and come from the different business strategies employed in the early days of corporate development.
The different definition makes some areas exist in a gray zone. For example, in both definitions, a sales department is the front office; but any after sales support is more difficult to determine. Under a customer-based model, it would be the front office, as the company is still interacting directly with customers. On the other hand, it is part of the back office in the monetary model, as after-sales work is rarely done for profit.
Regardless of the definition used for administrative support, some departments are almost always part of the system. Accounting is pretty much always back office in every business except an accounting firm. The part of the business that pays the bills, payroll, and vendors, as well as handling the budget and cash allocation, does not work with customers or earn money directly.
In the same vein, the information technology (IT) department is almost always subordinate. This part of the company maintains the network, computers, and software for the business. This means that the IT department rarely makes money or deals directly with customers.
Under the profit-based model, one of the biggest points is direct profit. Even if one part of the company allows another area to earn money, it will still be managed. For example, if the accounting department figures out a way to increase efficiency and reduce overhead on the company’s manufacturing arm, it still won’t make money. The changes created by the new design might increase profits, but those profits would come from a different department.
Asset Smart.
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