Why do you need a back office for your business?
Why do you need a back office for your business?
It is impossible to smoothly run your primary and essential business functions like product design and quality, supply chain, etc., without the hassle-free functioning of the back-office department. It wouldn’t be wrong to quote that the effective working of the back office of your business plays a significant role in determining your business’s success rate and growth.
A well-competent back-office and its effective functioning allow you to focus on your core competencies instead of worrying about managing the internal structure, finances, or employees.
Elements of the strong accounting foundation of your business’s back office
Every department follows a layering structure to manage the functions well. Here we will learn about the four critical layers that build up the accounting foundation of the back office of your business.
1. Designing and optimization of the accounting systems
A fully integrated and functional accounting and bookkeeping system is necessary to manage and maintain all the payroll, bookkeeping, accounting, and streamlining financial reporting to aid the efficient working of each aspect of your business.
2. Policies and procedures
Maintaining, recording, analyzing, and reporting all the financial transactions related to your business must be organized and systematic. For that, you will require a pre-determined set of rules and regulations in the form of standardized policies and procedures to avoid cumbersome situations and consistency in the operations of the back office.
3. Compliance
Financial recording and reporting are an integral part of the accounting practices that involve maintaining accurate financial data, essential for tax compliances, regulatory filings, and audits, and enable you to keep track of the overall economic well-being of your business.
4. Hiring and staffing
Your business’s accounting service and bookkeeping service department will require a team of professionals to work effectively and efficiently. As the size and quality of operations grow, you will be required to hire more people to support the increasing volume of core operations. Further, with evolving regulations and market trends, you may also need to onboard domain experts to leverage the benefits of the technology and market developments.
To help you set up a comprehensive and effective back office, we have curated a list of primary roles and responsibilities of the back office to avoid chaos within the company and support your core business line.
Support expected from the back office of your business
Here are the tasks or roles that the back-office department of your business is responsible for:
1. Data Management
When running a business, a lot of data comes under. This data can be related to the people, products, processes, market, etc., related to your company. Proper and efficient analysis and consumption of this data can help you quickly make critical business decisions. The back-office department of your business effectively takes care of the data management need of your business so that you can leverage the power of the same at any given time to make crucial business decisions to support your growth.
2. Project Processing
Every business handle and manages many projects or has multiple production lines operating daily. Aspects like tracking the performance, progress, ordering, quantity, etc., fall under the responsibility of the back-office team, which will support the technical support in executing the project and running the show on the ground level.
3. Market Research
For any business to operate at maximum functionality and efficiency, it is critical to understand the market it operates in and its competitors. Market research helps your business identify unfavorable conditions for your business that might come into play shortly and helps you either avoid or eliminate them with the help of strategic policies. Conducting market research enables you to identify the taste and preferences of the consumer, changes in the government’s policies, latest trends, upcoming or probable price changes, positioning amongst the competitors, etc., so that you tweak your core business operations to stay relevant in the market.
4. Analysis
To understand the overall consumer and market trend, the back-office team will manage the entire data aspect, from gathering data to analyzing the same to decoding the trends and making informative dashboards for the management to make necessary data-driven decisions. In addition, the back-office team will provide insights about the upcoming challenges to prepare yourself in advance. For instance, the study of market data by the back office suggests that if the demand for a particular product rises in the coming days, then the back office will inform the Production Department to gear up for the same.
5. Accounting and Finance
Bookkeeping and accounting are considered one of the primary roles undertaken by team members of the back-office department of your business. Every business requires recording every financial transaction and maintaining the books of accounts. For taxation or audit or even at the time of decision making, one can always take the help of these records to know the facts and understand the financial results and position of the company at any point in time. The accounting and financing role of the back office is treated as the backbone of the entire business operations and the decision-making process.
Final Words
Not all businesses can have a dedicated back-office team as it is costly. However, with the growth of the business, you might notice the need to outsource all your back-office operations to experts. Outsourcing back-office functions is not only a cost-efficient option than hiring a dedicated in-house back-office team but also dramatically reduces the scope of manipulation and fraudulent activities while bringing in the benefit of diverse experience and enriched knowledge base.
CFO UAE is the one-stop solution for all your back-office, accounting, controlling, CFO services and bookkeeping requirements. You can completely trust CFO UAE with their services as they know their job well and have worked with clients from different industries.
