Difference between Branch Accounts and Departmental Accounts
Branch Accounts and Departmental Accounts are two ways that a business can keep track of its money.
The Main difference is branch accounts are the financial records of a business’s different locations while departmental accounts are the financial records of different departments within the same location.
Before we move to the differences, let’s understand what are Branch Accounts and Departmental Accounts:
- Branch Accounts: Branch Accounts are the financial records of a business’s different locations. It keeps a track of the income and expenses of each location separately, so that the business can see how each location is doing financially.
- Departmental Accounts: Departmental Accounts are the financial records of different departments within the same location. It keeps track of the income and expenses of each department separately, so that the business can see how each department is doing financially.
Now, let’s move to Branch Accounts vs Departmental Accounts:
Major differences between Branch Accounts and Departmental Accounts
| Branch Accounts | Departmental Accounts |
|---|---|
| Branch Accounts is for different locations of a business. | Departmental Accounts is for different departments within the same location. |
| Branch Accounts keeps track of income and expenses separately for each location. | Departmental Accounts keeps track of income and expenses separately for each department. |
| Branch Accounts helps to monitor the financial performance of each location. | Departmental Accounts helps to monitor the financial performance of each department. |
| Branch Accounts can help identify the profitable and non-profitable locations. | Departmental Accounts can help identify the profitable and non-profitable departments. |
| Branch Accounts can help in the decision-making process for expansion or closing of a particular location. | Departmental Accounts can help in the decision-making process for restructuring or changing the focus of a particular department. |
That’s it.
Note that sometimes, the question might also be asked as “distinguish between Branch Accounts and Departmental Accounts”.
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Final words
Branch Accounts and Departmental Accounts are two important ways for a business to keep track of its money.
Branch Accounts tracks the financial performance of different locations separately, while Departmental Accounts tracks the financial performance of different departments separately. Having this information can help the business make better decisions and improve the overall performance of the company.
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