House Account - Definition & Meaning
What is House Account?
A house account in a firm is managed by the main office of the firm, or an experienced executive. These accounts are usually large or have some other important significance attached to them, as compared to the other normal accounts of the firm. Due to this reason, traditional salespeople are generally not entrusted the responsibility of managing house accounts.
These accounts may be accounts related to customers who have had a good long- standing relation with the firm, or with the management, or an account which is of potentially great importance.
While dealing with house accounts, the team or the0 individual who is in charge of managing the account must strike a proper balance between maintaining proper customer relations, and the cost of additional services/ benefits offered to house account holders.
The term house account may also be used to refer to an account that has been set up by a brokerage firm, for the purpose of managing its own investments, rather than the investments on the behalf of a client. Such accounts are set up when these brokerage firms want to invest in a financial market. So for this purpose, they would set up an account for themselves at the firm, to be managed by their own staff, rather than using other brokerage firms.
Hence, this concludes the definition of House Account along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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