Departments are set up once, in System Setup, and most users only ever meet them as a field on records and a filter on reports. It is worth knowing what that field carries:
- On documents. With Track departments on (Chapter 0), documents and ledger entries carry a department, so the Profit & Loss and the other financial reports can be read one department at a time (Chapter 7) — the cost-centre view of the business.
- On people. An employee belongs to a department, and that membership is how the governed numbers slice people: headcount is read department by department, and time logged in Time Tracking counts under the department the person belongs to — an entry carries no department of its own (§2.9).
- When someone moves. Changing an employee's department is a one-field edit on their record, and their time counts under the new department from then on. Nothing about the move rewrites documents already posted.
Branches play the same role for physical location: the employee's branch is their home branch, the default on documents they raise, and a filter on the same reports.