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What is Back Office Outsourcing?

Updated on March 20, 2013

What is Back Office Outsourcing

definition of back office processes

Assuming that most people know the definition of the outsourcing part of the title is basically the transfer of a business function to an external service provider. So what then exactly is the back office part of the title, precisely what does that term encompass when talking about business processes? Well as pehpas implied by the name, back office functions are those tasks that are required to keep a business running smoothly and efficiently but that do not actually make up the core of the company business, for instance a blue widget manufacturer has a core business that consists of manufacturing and supplying blue widgets, however the company simply could not function without people to do the accounts, people to hire the right workers, people to make sure the workers get paid and a host of other things that help the company run, these are back office functions.

The Back office is the engine room

Back office outsourcing has developed

In recent years there has been a growth in outsourcing these functions to other specialist companies rather than have people in house to do it, there are reasons for this growth with advantages and disadvantages in deciding whether to outsource or not, there is more on this at this Hub that lists the benefits of back office outsourcing and also the downsides.

So a list of back office jobs would look something like this..

  • managing payroll
  • human resources departments
  • accounting services
  • pay & bill
  • managing IT
  • data entry
  • administration

There are other back office jobs but these are the most common ones, basically these tasks are non productive but are absolutely vital to the running of the company so when considering outsourcing them it is important to employ service providers with integrity and a proven track record, a safe pair of hands is needed to look after the back office of an organisation, even a small one.

The most common functions that are outsourced are payroll and invoicing which can be useful to small and medium sized businesses as much as a large organisation, payroll is a task that is complex with many viariables like holidays, sickness and overtime to deal with, probably this is why so many firms opt for a payroll outsourcing company. Invoicing can be outsourced in several ways, including factoring which can help a company's cash flow, this is not quite as popular as using a payroll bureau as many business owners like to keep invoicing to themselves, however more and more they are recognising the benefits and contracting out invoicing and accounts departments as well.

What is easy to outsource

Human resources outsourcing is also an area where organisations are taking advantage of outsourcing, often an area of conflict between employers and employees it can be useful to have an expert HR company dealing with employees rather than personalities within the same company.  Nearly all IT sevices in companies are being contracted out on an ever more regular basis, there are people who think this is central to their business so would rather keep it in house but each business needs to decide for themselves whether this is appropriate for them or not.

A recent but growing area for outsourcing is admin and data entry, for instance recritment agencies usually have a datbase to enter all their candidates details into, however there are times when that task is not quite so intensive and other times when it becomes very busy, outsourcing the data entry jobs in this situation is probably very attractive.

Small businesses need to consider outsourcing too

With the move to smaller premises to save costs, better IT infrastructure around the country then it is becoming more and more essential to that back office outsourcing is considered by all organisations from very small to very large.

Agree, Disagree, I want to know - Leave a comment

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    • profile image

      Abid Rahman 3 years ago

      Best of view, Many arising company refers this kinds of planning of working, Now a days start the demand of back office work.

    • profile image

      Monica 4 years ago

      I like your hub and its very helpful in future. if you want to more information about Back office outsourcing click more on

    • profile image

      Monica 4 years ago

      I like your hub and its very helpful in future. if you want to more information about Back office outsourcing click more on

    • khushichoudhary profile image

      khushichoudhary 5 years ago

      nice topics and good information....i like it .

    • nabeelplus profile image

      nabeelplus 6 years ago from Karachi

      nice info, this is how large enterprises will operate in future

    • Conor Kindel profile image

      Conor Kindel 6 years ago from United Kingdom

      Your hub is very informative. I too have wrote few hubs on outsourcing. Take a look at my profile. You will enjoy!!!