What is a Support Department?

A support department, also known as a service department, is a functional area within an organization that provides support services or resources to other departments or units within the organization. Support departments do not directly generate revenue but play a critical role in enabling the operations of other departments.

Here are some key points about support departments:

  1. Purpose: The primary purpose of a support department is to provide specialized services, resources, or expertise that assist other departments in carrying out their core activities. Support departments focus on activities that facilitate the smooth functioning of the organization as a whole, rather than directly producing goods or services for customers.
  2. Examples of Support Departments: Support departments can vary depending on the nature of the organization and its industry. Common examples of support departments include human resources, information technology, accounting and finance, legal, marketing, facilities management, maintenance, research and development, quality control, and customer service.
  3. Services and Resources: Support departments provide a range of services, resources, and assistance to other departments. For example, the human resources department may provide recruitment, training, and employee benefits services. The information technology department may offer technical support, network infrastructure, and software solutions. Accounting and finance departments may handle financial reporting, budgeting, and cost analysis for the organization.
  4. Internal Chargebacks: In some organizations, support departments allocate their costs to other departments through internal chargebacks. These chargebacks involve assigning a portion of the support department’s costs to the benefiting departments based on predetermined allocation methods. This helps ensure that the costs of support services are distributed across the organization in a fair and equitable manner.
  5. Cost Centers: Support departments are often considered cost centers within the organization’s cost accounting system. This means that their costs are tracked and reported separately from revenue-generating departments. Cost centers allow organizations to evaluate the efficiency and effectiveness of support services, identify areas for improvement, and control costs.
  6. Interdepartmental Relationships: Support departments have interdepartmental relationships with other units within the organization. They collaborate, coordinate, and provide assistance to ensure the smooth flow of operations. Effective communication and coordination between support departments and other departments are crucial for achieving organizational objectives.

Support departments play a crucial role in supporting the overall functioning of an organization by providing specialized services, resources, and expertise. While they may not directly generate revenue, their contributions are essential for the efficient and effective operation of revenue-generating departments. Proper management and coordination of support departments are important for optimizing organizational performance and achieving strategic goals.

For information about how support costs are allocated, visit these articles:

Caroline Grimm

Caroline Grimm is an accounting educator and a small business enthusiast. She holds Masters and Bachelor degrees in Business Administration. She is the author of 13 books and the creator of Accounting How To YouTube channel and blog. For more information visit: https://accountinghowto.com/about/

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