Does centralized branch accounting complicate your accounting process?
We all talk about the Digital Era and all its pros and cons.
But there is definitely one thing that Digitization has made it easy for a number of businesses – A Quick Expansion.
So irrespective of where your current business is located.
You can smoothly expand it across the globe and have multi-branches managing it all from your Head Office.
But as the easier is the expansion the more difficult it gets to manage when it comes to accounting.
What is Branch Accounting?
In simple terms, Branch Accounting is a system of bookkeeping where separate books of accounts are maintained for each branch.
RealBooks is one example of online accounting software in India that supports branch accounting at it core.
And it maintains accounts for each operating location of the company to increase the transparency of business.
And to know the overall profitability and cash flow position and the financial picture of each location of the company.
These branches can be divided as per the geographical location.
And each branch has its profit centers and cost centers.
Also more importantly this accounting system separates the Trial Balance, Profit & loss statement, and balance sheet for each branch.
There are two main ways of accounting for branch transactions.
a) Centralized – Managing accounts through the head office for maintaining it’s all branch records.
b) De-centralized – Individual branches maintaining their own accounts and periodically submitting their data to HO to prepare Final Accounts for whole branches
The Need for Centralized Branch Accounting
Centralized branch accounting is a kind of accounting.
And most preferably Large organizations with smaller branches adopt these accounting standards.
A Centralized accounting system is a system in which all records are kept in one place.
Having multiple branches means having multiple sets of accounting ledgers.
Whereas consolidating them becomes a challenge.
And most importantly getting consolidated detail reports of the business for all branches becomes a nightmare.
Therefore we came across many businesses to solve this daring problem with RealBooks.
We at RealBooks acknowledged this issue faced by most businesses where multi-branch accounting becomes a hindrance to their growth.
We with our team of experts have developed a solution whereby creating Ledgers at Company Level at the end.
And it allowed branch accounting becomes much more manageable and gave more control to the Head Office.
To give you a clear insight into how RealBooks works for Multi-Branch Accounting we would like to share one such instance.
A client was facing a similar issue in managing all branch accounting.
But with RealBooks they are now able to seamlessly integrate all their accounts.
Advantages of Centralized Branch Accounting
Centralized branch accounting makes all receipts from sales through HO
And all expenses settle from HO
Also, manage all inventory purchased from HO and issued to the branches
And open all accounts separately for all branches from HO
Disadvantages of Branch Accounting
Having separate accounting staff in each space can cause inefficiencies, redundancies, and longer closing times.
And increases the expenses of the company because of a separate set up at each location.
It can also make delays in decision-making because of multiple authorities.
The Decentralized branch accounting may lead to mismanagement and minimum control of the Head office.
And separate account for each branch may require more manpower.
Case Study: The Problem
One of our customersis a Logistics company having its Head Office in Mumbai with 6 branches across India.
Since the client is in the Logistics Industry, the volume of data entries is huge and majorly repetitive.
Having branches in 6 cities, they were looking for an accounting solution that not only consolidates their accounting data.
But also simplifies their repetitive work.
Therefore we have made RealBooks solutions available to them for solving their problem.
Case Study: The Solution
RealBooks being a cloud accounting software gives real-time access to data to all its users.
So sharing of data is never a challenge.
But when we talk about Branch Accounting, it controls what is shared with those who need special attention.
To eradicate the problem of Multiple-Ledgers, what RealBooks helped the client with was the creation of a Ledger Centrally.
So now, instead of having multi-ledger accounts of similar types in various branches, they had uniform ledger accounts for the business.
Also, with the creation of the Ledgers Centrally, the Head Office had an option to define the permissions of each branch office separately.
This means that even though the sets of ledgers were the same for the entire business.
They could control the access given to the branch offices.
Also, since the client was catering in the Logistics.
They had a huge volume of transactions happening every day most of which were repetitive and inter-branch.
With RealBooks accounting software, they could now automate their inter-branch entries saving a huge amount of time and effort.
The result of all – The company now has a single set of ledgers with defined permissions for each Branch office.
There is no need to make inter-branch entries as it can be easily automated by the software.
Since there is only one set of ledgers.
We can get consolidate reports of all the branches and access the data at any point in time.
Not only this, the company can now plan its expansions without worrying about its branch accounting management.
And can add “N” number of branches to the same Centralized Ledger.
In Conclusion:
We at RealBooks specializes in catering to these issues for various clients on a regular basis.
And as Accounting is the core of any business we understand the importance of it and its management.
If you have faced something similar to your business and are looking for a customized solution.
We are there to help you centralize your business needs.
It does not matter where your business locations are and how many business locations you have across geographies.
RealBooks is built for scale to handle the ‘N’ number of business locations and branches.
For more details log on to RealBooks for all your multi-branch accounting needs.
You will find a number of accounting software and tools for managing your books online.
However, RealBooks is one such tool that allows multi-branch accounting and consolidation at the core of its heart.
Get a free trial on how RealBooks can support your business with ease when it comes to complex branch accounting.