A sub ledger is used for tracking individual items and transactions separate to the General Ledger (GL). Sub-ledgers may exist for, but are not limited to Accounts Receivable (AR), Accounts Payable (AP), Inventory and Fixed Assets etc. Without a sub-ledger individual customers or inventory items would require their own GL code making the GL unnecessarily large. Sub-ledgers also allow for more
specific detail to be included in transaction details. Each sub-ledger links to the GL by way of a control account (e.g. Debtors control the AR sub-ledger etc.). The total of the sub-ledger account should equal the balance in the control account at all times. Individual transactions should be posted via sub-ledger not directly to the control account. Reconciliations should be performed between the sub-ledger and control account on at least a monthly basis to ensure this is the case.