Front Office vs Back Office

Difference Between Front Office and Back Office

These terms are used to define different business processes within the organization where the primary responsibility of interacting with the customers is endowed to the front office and all the production and background processing of the tasks that are required to deliver a quality product or service lies with the back office hence both are pivotal parts of an organization

We often hear these terms while referring to the official works and different responsibilities. Both are different areas of the building area or the room where the employees of an office job. Both are those places where the employees perform clerical jobs or professional activities and other activities related to the smooth running of the business.

What is the Front Office?

The section of the office which takes on the responsibility of interacting with the clients of the company be it existing or new is known as a Front office. This section also handles the tasks of sales and marketing services along with providing after-sales services. The employees should possess good skills to be a part of this team.

The employees who are working in the front office directly interact and have dealings with the customers of the company. They are ones who have the duty of taking and placing orders on behalf of the customers and ensures that the customers are highly satisfied with the services provided. Since it handles customer satisfaction this section is highly responsible for the growth in revenues of the company.

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Front Office vs Back Office (wallstreetmojo.com)

What is the Back Office?

The back office section of a company mainly consists of the administration department. The employees in this section do not have direct interaction with the customers of the company. This section ensures that all the operations are performed seamlessly so that the daily business is run smoothly.

It helps in daily administration work along with the development and manufacturing of the products and services. The back office employees though have no direct contact with the customers are an integral part of the company as they are responsible for handling daily activities.

Front Office vs Back Office Infographics

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Front Office vs Back Office (wallstreetmojo.com)

Key Differences

The followings are the key differences:

  • The front office of a company handles direct communication with existing as well as new customers whereas the back office has no interaction with the customers.
  • The front office has sales and marketing departments whereas the back office has the admin department, finance and accounting departmentAccounting DepartmentThe accounting department looks after preparing financial statements, maintaining a general ledger, paying bills, preparing customer bills, payroll, and more. In other words, they are responsible for managing the overall economic front of the business.read more, HR department, warehousing, etc.
  • The main responsibility of the front office is to generate revenue and also increase the revenue of the company whereas the others’s duty is reducing the overall costs for the business.
  • The front office helps in developing the strategy to capture new deals whereas the back office helps in ensuring compliance management.
  • The front office tries to generate new deals so that the business increases whereas the back office focuses on the manufacturing of goods and services.
  • An important point of difference arises when salary comes into play. Since the front office employees are the ones who generate the revenue for the organization the salary earned by the front office employees are higher than employees in the back office.
  • Though the front office employees try to think that they are the ones who are doing the most important function, the reality is they are highly dependent on the workings of the other side as they ensure that all the processes are run well, be it admin, HR or IT. Moreover, over the years the roles of some function of the back office have evolved exponentially. For example earlier the role of IT was mostly confined to hardware’s but nowadays in investment banks, the IT team comprises people who develop important technical infrastructure which enables the core operation.

Comparative Table

BasisFront OfficeBack Office
DefinitionIt is a section which directly interacts with customers.It is a section that handles daily administration functions.
Customer Involvement It has direct involvement and interaction with customers. It has no direct involvement or interaction with the customers.
StrategyIt helps in strategy development. It is responsible for HR functions and compliance management.
Core functionIt helps in increasing demands and sales.It helps in the manufacturing of products and services.
Responsibility Its main function is to look after sales and marketing and the after-sales services. Its main function is to look after the daily admin processes so that the business runs smoothly.
SalarySince the front office employees are the ones who generate the revenue for the organization the salary earned by the front office employees are higherGenerally lower than front-office employees for most of the functions, though some functions are evolving now a day’s which can match the other side.
Focus AreaIt aims at increasing the revenue of the business. It aims at cost reduction.
Interactions Its main duty is selling and interacting with the clients of the company. It helps in support functions like IT management, Finance, and accounting, warehousing, etc.

Conclusion

Both play their important roles in order to grow the organization and also make sure all the operations within the organization are running seamlessly. Though traditionally it used to be that the front office employees are the ones who generate revenues and gets paid better, the gap is gradually and surely decreasing in most of the organization with the use of more and more technology over the years.

A lot of functions done by the clients are executed with the help of technology mainly for the whole BFSI sector. This led to the growing prominence of the back-office employees and also enabling them to contribute more in revenue generation part of the business.

Recommended Articles

This has been a guide to Front Office vs Back Office. Here we discuss the top differences between the front office and back office along with infographics and comparison table. You may also have a look at the following articles –

Reader Interactions

Leave a Reply

Your email address will not be published. Required fields are marked *