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What Is a Back Office?

Employees working in the back office.
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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 04 November 2014
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The back office is a collective term that refers to the portion of a business operation which is focused on handling the tasks necessary to keep a company functioning. This designation comes about from the tradition of housing these functions in the rear of a business facility, away from the general public. An arrangement of this type was once very common with all types of businesses, and still holds true for the layout of many different types of business operations such as retail stores and other sites where customers are likely to visit the facilities.

The traditional arrangement for a place of business called for three distinct areas in the general operations architecture. First, the front office provided an area where customers could interact with sales staff and others. The middle office was often the site of clerical and administrative functions, as well as the area where company officers have office space. A back office housed functions that help to keep the other two sections in perfect working order, making it essentially the heart of the business process.

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Today, a back office is likely to include space for the performance of three key departments in the overall company structure. The accounting department is part of this group, and is responsible for accurately recording the financial transactions that take place as the ongoing operation of the business. Among the many functions handled by this department, personnel working in this area will handle such issues as making sure payrolls are prepared in a timely fashion, payments to vendors are made on a regular basis, and that payments received from customers are accurately posted to each customer’s account.

The human resources department of the company is also part of the back office structure. This area is responsible for working with managers to secure employees for open positions, develop and oversee the relationship between the company and each employee, create hiring, disciplinary, and termination procedures, and intervene when there is an issue between any two employees of the business. The efforts of the human resources department have a direct impact on both the middle and front office, and the personnel who staff those areas.

A more recent addition to the back office is the information technology department. This area is often responsible for any type of electronic network that operates within the company, as well as managing telecommunications functions for the business. An IT department is also often involved in the selection and installation of various types of communication equipment, including computers, phone systems, and other equipment related to the communications process.

The designation of a back office does not mean the functions managed in this area are of little importance to the well-being of the company. In fact, back office functions make it possible for the remaining components of the business to function properly. For this reason, many businesses consider the back office to actually be the operational foundation of the company, and go to great lengths to make sure it is functioning at maximum efficiency.

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