Back Office
Candlefocus EditorBack office refers to the portion of a company made up of support personnel and administrators that do not directly interact with customers. Originally, the term "back office" was used to describe when companies designed offices so that the front portion contained associates that dealt with customers, while the back portion contained associates who never interfaced with the customer.
The back office is usually behind the scenes and is generally not seen by the public. The back office includes internal departments such as accounts, settlements, clearances, record maintenance and other internal support functions such as IT services and regulatory compliance.
Back-office functions are often complex, resource-intensive and time-consuming tasks. Operating and managing a back office is an expensive exercise, as a company typically needs an entire team of specialised personnel, as well as necessary technology infrastructure and tools to achieve a challenging goal.
Settlements involve the corporate payment process such as handling the necessary forms, income, expenses and transfers. Clearances involve all of the paperwork associated with the financial transaction, such as compliance with applicable laws and regulations, processing checks and verifying all of the details related to the transaction. Record maintenance involves maintaining records such as spreadsheets, databases and financial reports which need to be updated on a regular basis.
Regulatory compliance involves ensuring that all financial operations and reporting are in accordance with applicable law, regulations and standards. Accounting typically involves financial transactions that must be recorded, analyzed and reported to internal and external stakeholders. Finally, IT services involve the necessary infrastructure and tools required to meet the goal from the back office operations.
Therefore, a back office typically serves a vital role in any business, providing data entry and filing, record keeping and financial analysis of the company operations. Without back-end personnel and operations, most businesses would suffer serious financial and operational challenges. They are, therefore, an essential part of the corporate functioning.