Issues to consider: agency and disbursements: what is an agent?
We use the term ‘agent’ to describe a person who acts for or represents someone else (the ‘principal’) with the consent of both parties. An agent arranges supplies of goods or services between the principal and a third party by:
- obtaining goods or services for the principal (ie as a buying agent), or
- finding customers for the principal to sell to (ie as a selling agent).
Agents are always involved with two supplies at any one time:
- the supply between their principal and the third party, and
- the supply of their own services (services of agency) to their principal, for which a fee or commission is usually charged.