Before starting

Certain general accounts, the third-party accounts, can be broken down into subsidiary accounts. These are essentially customer and supplier accounts. This subdivision will allow a better accounting follow-up of invoices and payments for each of your third parties.

In this article, we will discuss the following points:

• All about sub-ledger accounting
• Activating the sub-ledger in the software
• How the sub-ledger works in the software

All about sub-ledger accounting

In accounting, a subaccount is a subdivision of a G/L account. In practice, sub-ledger accounts are only created for third-party accounts, i.e., Accounts Payable and Accounts Receivable.

If you have regular suppliers or customers, this function will allow you to improve the follow-up of payments for each third party. You will be able to:

• Easily identify uncollected customer invoices and/or unpaid supplier invoices.
• Easily identify duplicates for each customer/supplier account.

Activating sub-ledger accounting in the software

It can be helpful if you have a large volume of economic flows and some important third parties.

To activate the functionality, follow these steps:

1. Go to the Accounting > Settings page

2. Here you have two options:

• You can activate the sub-ledger accounting in the "Advanced Accounting" section while remaining at any other level.

Create the third parties

Once the auxiliary accounting has been created, you can create the third parties for which you want to have a follow-up. To do this:

1. Go to Accounting > Settings.

2. Click on the tab Third parties.

By clicking on it, you can register suppliers and customers. The two mandatory pieces of information are the name of the third party and its status (supplier/customer).

Your sub-ledger is now ready to be used. You can now enter entries by linking them to a third party. To do this, check the "link to a member or a third party" box when recording an entry.

In the "Documents" section of the accounting, you will find the client and supplier general ledger in the General Ledger options.

How the sub-ledger works in the software

Principle

The "sub-ledger accounting" feature will allow you to link certain accounting entries to a third party. The software will not create subaccounts for each customer/supplier but will allow you to generate a customer or supplier ledger in Accounting > Documents > General Ledger to track each subaccount.

How it works

Once the feature is activated and your first third parties are created, you can start to attach your entries to the different third parties and follow the accounting status for each subaccount.

Let's take an example. You have supplier A, for which you want an accounting follow-up.
You have created this auxiliary account in Accounting > Settings > Third parties.

Furthermore, you receive an invoice for $2000 to be recorded in the software.

Go to Accounting > Book Entry > Expense tab and fill in your expense.

Check the link to a person or a third-party function, and go and find your supplier in the Supplier field.

Once your invoice has been recorded, you can find in the Accounting > Documents > General Ledger the entries related to your suppliers and, more specifically, to your supplier A.

If you do the same for all your suppliers and customers for whom you want to create a subaccount, you will have an accounting statement for each supplier and thus know if the account balance is debit/credit /zero.

The operation is the same for the customers.