Retail back-office software is used to manage business operations that are not related to direct sales efforts and interfaces that are not seen by consumers. Typically, the business processes managed with back-office software include some combination of

inventory control Inventory control or stock control can be broadly defined as "the activity of checking a shop's stock". It is the process of ensuring that the right amount of supply is available within a business. However, a more focused definition takes into acco ...

price book Economics In economics, a price book is a book in which the normal prices of an item are listed for all suppliers. This allows one to determine the lowest price possible. If a group of suppliers adhere to a particular price book, in other words, ...

management,

manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a r ...

, and

supply chain management In commerce, supply chain management (SCM) is the management of the flow of goods and services including all processes that transform raw materials into final products between businesses and locations. This can include the movement and stor ...

(SCM). Back-office software is distinct from front-office software, which typically refers to

customer relationship management Customer relationship management (CRM) is a process in which a business or other organization administers its interactions with customers, typically using data analysis to study large amounts of information. CRM systems compile data from a ra ...

(CRM) software used for managing sales, marketing, and other customer-centric activities. Back-office software solutions have evolved with the emergence of cloud-based

software as a service Software as a service (SaaS ) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. SaaS is also known as "on-demand software" and Web-based/Web-hosted software. SaaS is con ...

(SaaS). Several back-office software providers offer cloud-based services that simplify and streamline back-office management functions, particularly for companies with multiple locations. These simplified platforms have given companies an alternative to

business process outsourcing Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity which otherwise is or could be carried out internally, i.e. in-house, and sometimes involves transferring employees and ...

(BPO), which involves handing over the management of a company's back-office to a third-party service provider. With back-office software, companies can derive actionable intelligence from the system without any particular expertise.

Cloud-based back-office software

Cloud-based back-office software provides the functionality necessary to manage numerous back-office functions from a single web-based interface. Many back-office software platforms can be accessed from both mobile and desktop devices, and are cross compatible with back-office accounting software such as

Quickbooks QuickBooks is an accounting software package developed and marketed by Intuit. First introduced in 1983, QuickBooks products are geared mainly toward Small and medium-sized enterprises, small and medium-sized businesses and offer On-premises sof ...

. Some of the most common back-office software functionality options include: * Item-level

inventory management Field inventory management commonly known as inventory management is the function of understanding the stock mix of a company and the different demands on that stock. The demands are influenced by both external and internal factors and are balan ...

Cash register A cash register, sometimes called a till or automated money handling system, is a mechanical or electronic device for registering and calculating transactions at a point of sale. It is usually attached to a drawer for storing cash and other v ...

management/

point of sale The point of sale (POS) or point of purchase (POP) is the time and place at which a retail transaction is completed. At the point of sale, the merchant calculates the amount owed by the customer, indicates that amount, may prepare an invoice f ...

(POS) management *

Price book Economics In economics, a price book is a book in which the normal prices of an item are listed for all suppliers. This allows one to determine the lowest price possible. If a group of suppliers adhere to a particular price book, in other words, ...

management *

Loyalty program A loyalty program is a marketing strategy designed to encourage customers to continue to shop at or use the services of a business associated with the program. Today, such programs cover most types of commerce, each having varying features and ...

management *

Sales promotion Sales promotion is one of the elements of the promotional mix. The primary elements in the promotional mix are advertising, personal selling, direct marketing and publicity/public relations. Sales promotion uses both media and non-media marketing ...

Sales forecasting Sales operations is a set of business activities and processes that help a sales organization run effectively, efficiently and in support of business strategies and objectives. Sales operations may also be referred to as sales, sales support, or b ...

Data exchange Data exchange is the process of taking data structured under a ''source'' schema and transforming it into a ''target'' schema, so that the target data is an accurate representation of the source data.A. Doan, A. Halevy, and Z. Ives.Principles of da ...

(e.g. electronic data interchange (EDI)) *

Invoice processing Invoice Processing : involves the handling of incoming invoices from arrival to payment. Invoices have many variations and types. In general, invoices are grouped into two types: 1. Invoices associated with a company's internal request or purchas ...

Key performance indicator A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it en ...

(KPI) monitoring (e.g.

gross margin Gross margin is the difference between revenue and cost of goods sold (COGS), divided by revenue. Gross margin is expressed as a percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold (e. g. production ...

profit margin Profit margin is a measure of profitability. It is calculated by finding the profit as a percentage of the revenue. \text = = There are 3 types of profit margins: gross profit margin, operating profit margin and net profit margin. * Gross Prof ...

) *

Workflow management A workflow consists of an orchestrated and repeatable pattern of activity, enabled by the systematic organization of resources into processes that transform materials, provide services, or process information. It can be depicted as a sequence of ...

Business reporting Business reporting or enterprise reporting refers to both "the public reporting of operating and financial data by a business enterprise," and "the regular provision of information to decision-makers within an organization to support them in their ...

Applications

Franchises

Cloud-based back-office solutions are used by franchisors for sales, inventory, and price book management. Franchisors can control inventory prices, optimize inventory supply based on projections, manage company-wide promotions, and monitor sales performance at each franchisee location from one centralized platform.

Convenience and retail stores

Companies in the convenience and retail industries use back-office software to manage inventory and identify opportunities to improve

s by keeping popular items in stock, preventing spoilage and shrink, as well as reducing overstock of unpopular items (by offering discounts and promotions, for example). Software allows back-office store operators to forecast inventory levels based on sales volumes and therefore optimize the store's turnover ratios (the ratio of how many times inventory is sold and replaced over a given period). Moreover, the measurement of inventory performance data allows store operators to benchmark their performance with published industry averages (e.g. from the

National Association of Convenience Stores The Association For Convenience & Fuel Retailing (NACS) was founded August 14, 1961, as the National Association of Convenience Stores. Today it is an international trade association representing more than 2,100 retail and 1,600 supplier compan ...

). Though turnover ratios depend on demand-side factors such as how desirable a product is, they can be increased through efficient back-office management. For instance, a case study involving a Pittsburgh-based convenience store operator showed that the company was able to achieve an average turnover ratio of 16.12 (compared to the 2013 US convenience store average of 11.36) by using cloud-based back-office software for inventory management. Back-office software can also be used to account for the effects of demand substitution and subsequently determine the optimal inventory level for each item stocked. Researchers have attempted to predict the increases in demand for complementary items (resulting from demand substitution) using a

probabilistic model A statistical model is a mathematical model that embodies a set of statistical assumptions concerning the generation of sample data (and similar data from a larger population). A statistical model represents, often in considerably idealized form, ...

for selecting item inventory levels in order to maximize expected profit. Another study employed a

stochastic model In probability theory and related fields, a stochastic () or random process is a mathematical object usually defined as a family of random variables. Stochastic processes are widely used as mathematical models of systems and phenomena that appea ...

to optimize the inventory management process at Spain-based retailer Zara: the new model increased sales by $275 million (3–4%) in 2007 and Zara continues to use the process for all of its products and at all retail locations.

Accounting

According to research from IDC Industry Insights, more than half of all small businesses in the US use

Intuit Intuit Inc. is an American business software company that specializes in financial software. The company is headquartered in Mountain View, California, and the CEO is Sasan Goodarzi. Intuit's products include the tax preparation application Tu ...

software (

) for accounting. But with the growth of the

SaaS Software as a service (SaaS ) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. SaaS is also known as "on-demand software" and Web-based/Web-hosted software. SaaS is cons ...

market, Quickbooks along with other emerging online accounting options such a
BIM CALC
or

Outright Outright was an accounting and bookkeeping application that assists small businesses and sole proprietors with managing their business's income and expenses. It also provided them with a means to organize and categorize expenses for filing a ...

and

Mint.com Mint, also known as Intuit Mint (styled in its logo as intuit mint with dotted 't' characters in "intuit" and undotted 'i' characters) and formerly known as Mint.com, is a personal financial management website and mobile app for the US and Canada ...

are now being adopted. These options are simple to use, but may have limited functionality compared to desktop accounting solutions. Accounting software is often integrated into or connected to back-office software for inventory management to simplify the exchange of store data between operational and other retail systems.

Supply chain

Supply chain managers use back-office software to match sales data with supply chain data and to streamline product ordering. All of the steps in

(SCM), including procurement, conversion, transportation, distribution, and partner coordination/collaboration can be controlled via back-office software. This process of enhanced information sharing and supply chain streamlining has been demonstrated to decrease supply chain costs by an average of 2.2%. Though back-office software reduces the likelihood of inventory record inaccuracies, they can still occur if items are not properly tracked as they enter/exit the retail space. One way to limit the impact of record inaccuracy is to use a

Bayesian belief network A Bayesian network (also known as a Bayes network, Bayes net, belief network, or decision network) is a probabilistic graphical model that represents a set of variables and their conditional dependencies via a directed acyclic graph (DAG). Bay ...

of the physical inventory,{{Cite journal, title = Retail Inventory Management When Records Are Inaccurate, journal = Manufacturing & Service Operations Management, date = 2008-03-11, issn = 1523-4614, pages = 257–277, volume = 10, issue = 2, doi = 10.1287/msom.1070.0203, first = Nicole, last = DeHoratius, first2 = Adam J., last2 = Mersereau, first3 = Linus, last3 = Schrage, citeseerx = 10.1.1.135.2297 creating a

probability distribution In probability theory and statistics, a probability distribution is the mathematical function that gives the probabilities of occurrence of different possible outcomes for an experiment. It is a mathematical description of a random phenomenon i ...

that is updated as inventory inaccuracies are discovered. The application of Bayesian principles to inventories can avoid instances of inventory freezing (when physical inventory levels reach zero but records indicate otherwise).

Human resources

There are many cloud-based HR solutions available for payroll management, timesheet tracking, and hiring. Using cloud-based HR software for payroll management is particularly advantageous because the software usually has up-to-date information on local tax rules, which otherwise require specialized tax knowledge. HR departments use back-office software to match labor supply with demand based on sales forecasts.

References

Information technology consulting Enterprise software