Definition: A department is typically understood as a part of a larger organization
The term 'Department' may cover a wide variety of meanings, from e.g. a geographical or administrative division within a country, to a governmental ministry or a part of an institution, such as a university.
Departments within a company can be organized around a number of different parameters, e.g. function, product, customer, geography or process.
From a financial point of view it may be interesting to look at the income and
expenses for each department.
Statement of income
In order to calculate the income for a department, it is important that the department is associated with the sales that are related to it. In e-conomic, you can activate the Dimension add-on module for free, which will allow you to divide income between the departments according to the associations you have made.
Departments based on sale can be very beneficial to a company operating with different sales departments.
Statement of expenses
Similarly, it may also be of interest to consider the expenses for each department to get a better understanding of the efficiency of the different departments. This is also possible using the Dimension add-on module in e-conomic. In this case, departments are of course associated with
costs.
Why use departments?
Departments are useful for companies of a certain size, since they allow for a more detailed overview of the performance of each unit within a company. This way, companies are better equipped to improve the most required areas.
For small companies, departments are often of less use - but each company should always be considered separately.
If you are an e-conomic customer and would like to try out the Dimension add-on module, you can
read more about the module or visit our
FAQ page on the Dimension module.