> For the complete documentation index, see [llms.txt](https://help.modelreef.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.modelreef.io/help/building-your-model/divisional-structures.md).

# Divisional Structures

This article describes how to use branches to represent **divisions, business lines, regions and stores** inside a Model Reef model.

You will learn:

* How to choose the right level of divisional detail.
* How to structure branches under an entity.
* How to reuse structures for multiple divisions or locations.
* How to keep divisional reporting and consolidation clean.

***

## What counts as a division

A division in Model Reef can be any logical unit you want to see separately, for example:

* Product lines (Software, Services, Hardware).
* Channels (Online, Retail, Wholesale).
* Regions (ANZ, UK, Europe, North America).
* Stores, clinics, venues or branches.
* Business segments (SME, Enterprise, Consumer).

Divisions are distinct from legal entities. You can have multiple divisions inside one entity branch.

***

## Structuring divisions under an entity

A common pattern within an entity branch is:

* `Entity A`
  * `Division 1`
  * `Division 2`
  * `Division 3`

or, for locations:

* `Entity A`
  * `Region North`
    * `Store 1`
    * `Store 2`
  * `Region South`
    * `Store 3`
    * `Store 4`

Each division or store branch holds its own revenue, cost and other variables.

The entity branch then shows:

* Its own head office or shared costs.
* Plus the sum of all divisions and locations beneath it.

***

## Reusing divisional templates

{% stepper %}
{% step %}

### Build a template branch

Create one template branch containing common variables such as revenue, COGS, rent, staff, marketing, etc., along with default drivers, timing settings, notes and tags.
{% endstep %}

{% step %}

### Duplicate the template

Duplicate this branch for each new division or location.
{% endstep %}

{% step %}

### Adjust per-division inputs

Change only the inputs that differ (volumes, prices, local costs).
{% endstep %}
{% endstepper %}

This pattern gives you consistent structure across all divisions and reduces modelling time and errors.

***

## Allocating shared costs to divisions

There are several ways to handle shared costs such as head office expenses.

{% stepper %}
{% step %}

### Keep shared costs at the parent entity branch

* Simplest approach.
* Divisional branches show direct costs only.
* Entity and group level reports show total profitability including shared costs.
  {% endstep %}

{% step %}

### Allocate shared costs to divisions with drivers

* Use drivers such as revenue share, headcount or floorspace to allocate costs.
* Create allocation variables per division that reference parent level cost drivers.
* Optionally keep both allocated and unallocated views using categories and custom reports.
  {% endstep %}

{% step %}

### Hybrid approach

* Allocate only certain shared costs (for example sales and marketing).
* Keep others (for example corporate overheads) at the parent level.
  {% endstep %}
  {% endstepper %}

Choose the method that best matches how management thinks about divisional performance.

***

## Divisional reporting

With divisional branches in place you can:

* Run P\&L, Balance Sheet and Cashflow statements per division or region.
* Build dashboards showing revenue, margin and cash contribution by division.
* Compare divisions side by side using charts or custom reports.
* Aggregate divisions into higher level segments using intermediate parent branches.

Because each branch has full statements, you can analyse both top line and capital intensity at each divisional level.

***

## Avoiding over segmentation

It can be tempting to model every minor unit as a branch. This often leads to:

* Unnecessary complexity.
* Harder maintenance.
* Slower decision making.

Guidelines:

* Use branches for units where **separate P\&L or strategy decisions** are made.
* For smaller slices, use **categories**, **tags**, or **variables** rather than new branches.
* Start with a small number of divisions and add more only if there is a clear decision making need.

***

## Related articles

* [Multi-Channel Revenue Forecasting](/use-cases/ecommerce-and-d2c-brands/multi-channel-revenue-forecasting.md)
* [Build a Top Down Forecast](/how-tos/core-modelling/build-a-top-down-forecast.md)
* [Attachments](/help/permissions-and-collaboration/attachments.md)
* [Entering Delays](/syntax/timing-syntax/entering-delays.md)