A new English word “back office” has appeared in Russian everyday life. What it is? What functions does it perform? In which companies does it exist? Let's try to understand in more detail.
Back office. What it is?
These units exist in many organizations. A back office is a department or department of a company that has certain functions. It is about routine, administrative and service. Traditionally, the functions also include information technology (administration and support service), human resources and accounting.
In some organizations, additional directions of work that the back office should perform are separately prescribed. What is it? Often the employees of this department are engaged in statistical and analytical accounting of sales, purchases, inventory balances and maintaining the archive.
If this back office is a division of the bank, then the functions include clearing operations, current cash settlement services, and so on.
Back office history
At the initial stages of business development, the layout of any company’s premises was special. The foreground was occupied by the so-called front office. This was done so that clients had the opportunity to quickly and easily find the right employee. Naturally, the management invested heavily in this room, making expensive repairs, cleaning and furnishings. The front office should have made the best impression, since it is the “face” of any company.
His employees must also be consistent in the style of clothing and behavior. This is the public side of any company.
In the background, the back office has traditionally been located. This is such a place in which the production itself was carried out, there was a system of administrative premises, various departments, warehouses, etc.
Therefore, these territories have traditionally been dirty, gloomy and not very well-groomed. The presentability of these premises was not very watched, since customers never appeared in them. Naturally, no special requirements are imposed on the appearance of employees. More attention was paid to professional skills.
This division of the office into two large divisions that perform different functions has proven itself well and exists to this day.
Front office employees create a beautiful “picture” for the company. At the same time, it is thanks to the back-office staff that the company develops and flourishes. Why? Let's consider.
Significance and importance of back office for company development
Practice shows how great the role of this unit is for the organization.
Firstly, the back office helps maintain the company's reputation in a highly competitive environment. Naturally, if employees perform their duties well and clearly. Indeed, for any client, the main criterion for a good company is a quality service. Thanks to the back-office employees, a complete cycle of a particular operation is performed.
Secondly, risk management is also carried out by the back office. What does this bring to the company? It is the employees of this department who draw up reports, select data, factors and make calculations based on which management decisions are made. Therefore, their correctness and accuracy is very important for the future of the company. Employees do extremely responsible work, significantly reducing risks.
Thirdly, the back office service is also developing new methods of saving and rationalization proposals. Naturally, employees do not directly earn financial resources for the company. But they can indirectly influence this process.
Back office in the bank
It is an operational accounting unit. Thanks to his work, the activities of the main departments are ensured.
The back office is involved in accounting and registration of transactions with securities, management of liabilities and assets, as well as settlements with customers. But this is only the tip of the iceberg.
The back office performs loan processing operations. In addition, employees often engage in account opening, bookkeeping and risk management.
Back office. Documentary execution and support of a transaction in the securities market
In banks, the back office often consists of several divisions. Especially if the organization makes a large number of transactions in the securities market. The duties of employees include electronic and documentary processing, their support. Let us dwell on this in more detail.
Firstly, the back-office employee maintains a register of transactions, draws up a contract for the sale of securities of a particular issuer.
Next is the process of re-registration of securities. This is a transfer of ownership. To start this process, the back-office employee needs to issue a transfer order and legitimize the current transaction.
After re-registration is carried out and a supporting document is received, the employee controls the final settlement process.
The back office employee has a very big responsibility. If there is the slightest inaccuracy in the process of paperwork, the transaction is recognized as invalid. As a result, the client will suffer, and the company will suffer serious losses.
In addition, the back office is engaged in analytical (internal) transactions between departments in the organization in the system of redistribution of finances.
For the field of trade in recent years, they often use a variety of automation programs back-office.
Retail back office
When organizing a business, a manager faces many problems. It is necessary to provide the trading floor with goods, automate warehouse accounting at the enterprise, manage pricing, interact with suppliers and branches.
In order to solve these and many other problems, as was noted, there are special programs for the back office.
In the retail system, employees of such a unit will help to control the arrival and release of goods, write off and move, re-evaluate, make returns, cash and Bank operations, work with trade equipment.
The software package can have different configurations: non-food retail, convenience store, convenience store or supermarket. There is currently a choice.
Network back office
The main areas of work in network trading are:
- making changes and additions to a large range of goods;
- data exchange between departments;
- centralized accounting;
- obtaining operational reports on the functioning of branches, etc.
To facilitate the work and ensure the interaction of the office with a network of outlets, they often use an automated version of back-office. These programs allow the organization to work more efficiently and quickly.
Back office in catering
The work of the back-office catering staff is mainly ongoing operations. They traditionally include the following:
- committing routine mandatory operations;
- conducting commodity and warehouse accounting;
- the process of control over the production of dishes;
- data collection and analysis;
- making report.
Depending on the size and turnover of the organization, the back office in trade usually numbers from three to thirteen to fifteen people.
Currently, as was noted, there are automated systems to facilitate the implementation of operations that employees must perform. This, of course, is a positive moment for the head of the organization. But not always for workers. Practice shows that the acquisition of automated systems that perform most of the back-office work leads to a reduction in staff.
