What Are Back Office Services?

Tally Solutions | Updated on: April 19, 2022

• What is a back office?
• Why do businesses choose to outsource back office services?
• What are the problems of outsourcing back office services?
• Is outsourcing back office services the right fit for your business?
• How TallyPrime software can help

What is a back office?

You might have often heard the terms back office support and back office services often. What do they actually mean? Let us begin by what a back office means. A back office is the part of your business that isn’t directly involved in dealing with customers. That is, think of the back office as those functions which aren’t about interacting with your customers but are vital for the proper functioning of your business. Examples of back office functions include payroll, accounting, operations, HR, and logistics. Back office doesn’t directly generate any revenue for your business because it is working in the background. Front office, on the other hand, includes direct customer interaction activities such as marketing and sales which require communication.

Back office includes HR, accounting, and payroll

Back office is as important and even more so in some cases than the front office. Business owners often believe that they should only focus on front office operations but that isn’t true. Equal focus should be given to both as they work alongside each other for your business’s success. Without a proper functioning foundation, your business cannot work to its full potential. Even though the back office isn’t directly related to revenue generation, it impacts the business' bottom line. For example, if you don’t allocate enough resources to the back office, then you can experience lags and problems in running your business.

Back office operations are often quite complex. This is why they always need to be performed by people with proper expertise. For example, accounting should be done by a knowledgeable individual who has worked in the accounting department before and has the qualifications of performing complex calculations correctly. If back office operations are done by people who don’t possess the right expertise then it can wreak havoc for your business and can cause a lot of problems in the short and long term. It is necessary that you have the resources for proper back office services.

Why do businesses choose to outsource back office services?

Many businesses prefer to outsource their back office services such as payroll, CFO functions, and accounting. The reason is that they believe that back office operations are complex. This is true because back office operations entail a lot of activities that must be done correctly. If not, it can negatively impact the entire business. Another major reason why people tend to outsource is because they think it takes time to generate financial statements, manage payroll, and perform accounting on a daily basis. Businesses also tend to outsource because they feel like a lot of resources will get tied up if they manage back office operations on their own.

What are the problems of outsourcing back office services?

While outsourcing back office services sounds like a fantastic idea, it is riddled with problems. First, you will be trusting someone else with all your business information. This can lead to security risks and confidentiality risks. This is particularly true when you are outsourcing functions such as accounting. Secondly, you have to trust what the company says about the expertise of the individual or individuals. You can be kept in the dark about that and this can be problematic in the future because you cannot be sure of the quality. Thirdly, outsourcing back office operations can mean the quality is much lower than your expectation. This can lead to greater lags and inconsistencies.

Business owners often assume that outsourcing back office services can reduce costs. While it can be cheaper than hiring an expert initially, this doesn’t always hold true. Let us say you outsourced to a company. If the company caused more problems than providing solutions, it means you lost your precious time, effort, and resources. This means it proved costlier than simply hiring an expert for the job. Although outsourcing may mean lower costs, they don’t always guarantee it because you are still taking a lot of risks when you are outsourcing function such as CFO functions, accounting, and payroll.

Outsourcing can also add challenges because it is not necessary that you will get the work you need submitted on time. The individuals will probably be working from elsewhere and so there is a lack of control from your end. You have minimal control in outsourcing because your job is to tell them what to do and then let them complete the tasks. In an on-premise setting, you can directly communicate with your employees which can get your point across better. If the company you are outsourcing to has any changes or faces any problems, then your business will suffer as a result because you will have to face the consequences. In short, outsourcing can get pretty messy.

Is outsourcing back office services the right fit for your business?

Not all businesses should outsource back office functions because it is not for everyone. However, think of whether you can hire someone for the job who has the expertise you need. Hiring an expert who has experience and qualification is better than outsourcing. However, if that doesn’t sound like a viable option then think of software solutions and if they can help. Many business management software solutions that provide back office services are easy to be used by first-timers. The right solution can eliminate the need to hire experienced individuals for back office operations as the software can perform the tasks automatically. An easy and intuitive accounting software package such as TallyPrime makes managing your business simple.

How TallyPrime software can help

TallyPrime is a powerful software that contains features such as payroll, invoicing and billing, inventory management, tax, bank reconciliation, cash flow management, and more. It is an easy to learn software tool that makes business management a simple task for MSMEs. You don’t need to be an expert to use TallyPrime because it has an easy-to-use interface. You can even find tutorials and help from the TallyPrime website for all you need so you can use the software fully and enhance your business operations. You can easily manage your business with this software solution. It is also often known as an accounting software because it contains all features of a robust accounting software.

TallyPrime provides cash flow management

TallyPrime provides insights which can drive your business decisions. It lets you generate reports which you can slice and dice as per your convenience and requirement. It can generate more than 400 unique business reports. You can generate a budget report to see whether you were close to the budget you set or not. You can generate financial reports such as ratio analysis, profit and loss statement, balance sheet, and trial balance. If you need inventory-related reports, then you can generate those too with ease. TallyPrime ensures you can make sense of your data so you can make informed decisions based on that.

The software solution is also highly secure which makes it an excellent choice for businesses that care about their data. TallyPrime has numerous net capabilities. It enables you to view business reports when you need to and from wherever you need to. This means you can make decisions before you even reach your business premises. TallyPrime has feature-based security levels and provides multiple user access control. This gives you the ultimate choice of what restrictions need to be placed and on which employee or employees. With all the control in your hands, you get to choose how you want the business to work for you according to your requirements.

It provides payroll capabilities too which are often an essential part of back office services. The payroll module of the software enables you to process salaries on time, track attendance and leaves, group employees, and much more. TallyPrime is developed to scale with your growing business. This makes it highly suitable for MSMEs which are constantly growing. As there are more complexities, a software like TallyPrime can easily handle that and ensure the transition from one stage to the next is smooth. When you use TallyPrime, you get quality technical customer support to ensure you always have an expert to help you if you have questions.

You can even try the free trial version of TallyPrime to experience the software at your pace and see how that goes for you. Opting for a software solution rather than risking to outsource is a better option when you want to ensure back office operations are taking place correctly.

Read more:

• Invoicing And Billing Software in USA That Best Suits Your Business
• 5 Things in TallyPrime for Enhanced Business Efficiency
• Best Accounting Software in USA