What is a branch in an accounting system?
Published
A branch in an accounting system is an operational entity within the same legal business - a location or a business unit - with its own operations, numbering, and reports, and possibly its own inventory and staff, while remaining part of the parent's legal personality with its commercial registration and VAT number.
Three things called "branch" - and they don't coincide
| Legal branch | System branch | Cost centre | |
|---|---|---|---|
| Appears in | Commercial registration | Your accounting system | Your analytical reports |
| Created by | A formal procedure with the authorities | Internal system setup | Internal system setup |
| Produces | An officially recognised entity | An invoice series, standalone reports, location permissions | An analytical dimension only |
A system branch usually spawns its cost centre automatically - the reverse is not required. Al-Waha's Riyadh branch is an entity with an invoicing device and RYD- numbering, and a cost centre appearing in the branches statement (cost centre page).
What it actually produces
- A standalone invoice numbering series with a prefix (RYD-, JED-) - see the invoice numbering page.
- Location performance reports - the branch's revenue and costs.
- Location permissions - the Riyadh cashier doesn't see Jeddah sales.
- On-location inventory if each branch has its own warehouse.
- An invoicing device/unit registered to the branch under Phase 2 requirements.
Frequently asked questions
A new branch today - what do I do in the system?
Create it, set its numbering prefix, link it to a cost centre, assign users with their location permission, and register its invoicing device with Fatoora if you're on Phase 2.
A branch at a temporary location (an expo, an event)?
It depends: if very short, a temporary cost centre may suffice; if it has ongoing statutory sales, a full branch.