Front and Back Offices -Differences

The terms ‘Front’ and ‘Back Office’ are used in business to refer to the form of office work conducted. In general the front office interacts with customers/clients and handles the day-to-day activity. The back office is where management leads the organization and handles the underlying financial affairs.

The two following sections explain in more detail the associated functions and tasks for each type of office. Later on this article illustrates the most common businesses separating the office environment into the two halves. Sprinkled throughout these sections are comments illustrating the advantages of having two separate office functions.

Front Office

There is one unique factor separating the front office from the back; it is customer interaction. Think about your dentist. The front office takes your phone call, schedules the appointment, greets the patient, ensures proper check-in and documentation. When the patient departs, the front office collects the fee, reschedule the patient and coordinates any pharmaceutical needs.

The following is a short list of front office duties and corresponding tasks:

* Provide customer/client/patient service

– Receive phone calls from all parties, redirect as appropriate
– Answer inquiries, explain policies and procedures
– Address emergency situations including physical injuries
– Ensure any documentation dealing with customers is correct and complete

* Handle Deliveries

– Receive incoming packages and mail
– Process and outgoing mail
– Direct and coordinate deliveries

* Address Employee Issues

– Direct employee questions to the appropriate supervisor
– Answer employee questions related to timing of pay, holidays etc., redirect to human resources if needed

* Communications

– Ensure proper dissemination of important information and use a notification system for long-term items
– Maintain a list of contacts with phone numbers, addresses, electronic addresses, web-sites etc. for all third parties

* Scheduling

– Maintain a master schedule for the entire company including management, office staff, programs and physical facilities
– Update the annual schedule for activities and production deadlines

* Office Maintenance

– Coordinate cleaning and maintenance
– Order and ensure all supplies for office operations are available

In most offices the primary person in the front office responsible for the above is the office manager. This individual may be responsible for up to seven or eight staff to complete the above duties and tasks. Under the office manager’s authority are receptionists, clerks and sometimes interns.

The best advantage the front office provides is a shield to prevent customers from consuming or ‘Bending the ear’ of management and professional staff customarily located in the back office.

Back Office

The back office gets its name from the historical physical attribute. In most small business environments management and the professional staff are secluded from the noise customarily located near the front door.

It is in the back office where the management team spends their time planning, organizing and controlling the operations of the company. The following is a short list of the back office responsibilities:

Senior Management – includes the owner, senior managers and respective department heads; their primary responsibility is to set goals and lead the company.
Human Resources – required to match company employment needs to available manpower.
Finance – held responsible for the availability of working capital.
Engineering – if applicable, this department is accountable for design and upgrades to the production process.
Sales – often in the front office (customer interaction) but sometimes is located in the back office depending on the nature of the business.
Legal – often subcontracted to an outside firm.

The back office is generally separated from the front primarily to minimize disruptions from customers and employees. Most of the back office personnel are paid significantly more per hour than front office staff. Reduced delays allow for maximum efficiency of time.

* Medical Practices
* Legal Firms
* Accounting Firms
* Schools
* Engineering Firms
* Manufacturing Operations
* Social Service Companies
* Non-Profit Organizations
* Dealerships

Summary – Front and Back Offices

The terms ‘Front’ and ‘Back Office’ are a historical reflection of the physical proximity to the front door of the business. In modern use it also refers to the general tasks associated with the respective office. The front office regularly addresses customer and employee issues. The back office harbors the management team and the professional support staff. ACT ON KNOWLEDGE.

Value Investing

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Then learn about Value Investing. Value investing in the simplest of terms means to buy low and sell high. Value investing is defined as a systematic process of buying high quality stock at an undervalued market price quantified by intrinsic value and justified via financial analysis; then selling the stock in a timely manner upon market price recovery.

There are four key principles used with value investing. Each is required. They are:

  1. Risk Reduction – Buy only high quality stocks;
  2. Intrinsic Value – The underlying assets and operations are of good quality and performance;
  3. Financial Analysis – Use core financial information, business ratios and key performance indicators to create a high level of confidence that recovery is just a matter of time;
  4. Patience – Allow time to work for the investor.

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Value Investment Club

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