April 11, 2023
The ever-growing global market has enabled various organizations to have different working divisions which are geographically separated from the main office. When the business plans for expansion to multiple branches, it is essential to keep track of accounting for each branch along with the head office. This is where branch accounting comes in aid. Let’s look into branch accounting and some significant factors connected to it in detail.
Branch accounting is defined as a bookkeeping system or an accounting system that is maintained in each branch of an organization. These accounts are designated for a particular period and thereby, it is temporary. Also, the bookkeeping system of each branch is sent to the head office to integrate with other units. With branch accounting, the performance of each branch can be tracked very closely as the firms are transparent about all transactions, and cashflows, and financially accountable. Moreover, this bookkeeping system provides different methods to maintain records properly and prepare financials for business. Accoxi is reliable cloud-based accounting software that comes with branch accounting and all its essential features can aid in managing different branches of the organization effectively.
The history of branch accounting goes way back to Venetian banks which were formed as early as the 14th century. During the period around1410, the ledgers of a firm of Venetian merchants also made use of accounts for home and overseas accounts. The first accounting textbook named Summa de Arithmetica by Luca Pacioli (1494) already consists of a chapter which is devoted to it. German counting-houses and other businesses made use of branch accounting widely by the 17th century. During mid-1700, Moravian settlements also used it throughout the thirteen original colonies.
Branch accounting can be helpful in making better decisions on each branch of an organization. It helps evaluate a branch's profitability and examine the possibility of expanding the business. With branch accounting, a company can understand whether to shut down the business in a particular brand or scale up the business for success. Also, separate accountability gives us the operating cost of the branch in the particular region which enables us to make optimal strategies for enhancing business performances.
The key features in Accoxi branch accounting make the creation, managing, and switching of branches much easier. Also, it is helpful in multiple branch handling along with separation of both branch and head office reports effectively which ensures streamlining workflows in organizations.
Some of the objectives of branch accounting are as follows:
With Accoxi branch management, it is possible to stay current with information on financials, allocate users and customers to branches, manage stock transfers, and have centralized control on inventory management.
When businesses have multiple branches, it is inevitable to have bookkeeping systems and branch accounting facilities. As branch accounting ascertains the income, expenses, assets, and liabilities of each branch, this bookkeeping system is essential to know whether profitability is achieved in each branch or not. This is crucial to determine the performance of branches and scale up the business growth effectively.
Looking to experience a hassle-free branch management system? Register yourself for a free trial of Accoxi now.
