When an enterprise, whether for profit or non-profit, grows or Buy Verified Binance Accounts expansion, it usually opens additional locations. Banks, coffee shops, supermarkets, department stores, restaurants, beauty salons, airlines, and even government offices may operate in more than one location, domestic or foreign, to cater to the needs of their customers or clientele.
Such additional locations may either be in the form of an agency or a branch.
Branch or Agency?
Depending on its objectives, the enterprise may adopt the form of either a branch or an agency. Both are part of a central organization and while they conduct operations away from their home office, they are not a separate legal entity from the latter.
The key difference between the two lies in their degree of autonomy or independence. For instance, a sales agency typically does not stock inventory, but only displays merchandise, takes orders and arranges for delivery of the merchandise. In other words, the agency merely acts on behalf of the home office (H.O.), with the latter handling the other aspects of operations such as purchase of merchandise, advertising, and granting of credit.
The branch, however, has a greater degree of autonomy and thus operates more independently of the home office than the agency, primarily in the following aspects:
- Provision of a wider range of services to customers or clientele
- Exercise of greater management decision-making
- Handling of more aspects of business operations, such as stocking of inventory, filling of customers’ orders, credit and collection
- Maintenance of a separate accounting system
Separate Branch Accounting System
Reflecting this greater degree of autonomy, the branch typically maintains its own separate accounting system, while the agency does not. In fact, it is the home office which records all agency transactions in the former’s accounting system.
Such maintenance of separate accounting records by the branch and the home office facilitates more effective control over operations and enables top management to better assess branch performance and make strategic business decisions for the company.