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Farm in this instance means an independent company that specializes in a particular service. A statistical service would be an example. When your firm is highly specialized, it often pays to have a particular segment of work done by a separate firm.

Such services as cleaning services, temp secretarial services, advertising marketing, and supply accounts can all be "farmed out" by a company whose main focus is something other than the ancillary services mentioned. It is more cost efficient to hire a service than to maintain a large staff.

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Q: What does Farm in Farm out mean in accounting?
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