What are Reciprocal Services?

Reciprocal services occur when different service departments within an organization provide services to each other. For example, the information technology department provides software maintenance support to the janitorial services department, which in turn provides cleaning services to the information technology department. This back-and-forth swapping of services can be taken into consideration when calculating the allocation of overhead costs.

It is important to understand the cost of reciprocal services within a business, since this tangled web of costs can impact the overall cost of operations for a service department, and so may impact the decision to outsource one of them.