Types of Branches

In the branch setup, there are various types of branch system exist. They are different over the basis of right, duties, authorization and the level of independence from the head office. Some of the common types are as follows:

  • branch receives the products/ goods from the head office and sells the same on the credit and cash terms. The cash is deposited into the head office bank account. The expenses are met by the remittances received from the head office. They are not allowed to use the cash received from sales for their expenditure,
  • branch receives the products/ goods from the head office and sells the same on the cash terms only. The cash is deposited into the head office bank account. The expenses are met by the remittances received from the head office. They are not allowed to use the cash received from sales for their expenditure,
  • branch is given the full authority to run as a standalone business or entity. It purchases the goods, sells the goods on its choice of either on cash or credit and deposits the amount into its own bank account. It manages the expenses of the branch from the fund it has from sales. It maintains its full books of account. This type of branch is audited at the end of the reporting period.