Chart of Accounts: Adding subaccounts

Subaccounts let you track several related types of income or expenses independently, yet keep them all under the “umbrella” of a single parent account.

For example, if your business has substantial advertising expenses, you could divide your Advertising expense account into several subaccounts:

Advertising
    Directing Mailings
    Newspaper Ads
    Signs
    Yellow Pages Listing

Your reports will now show subtotals for the various ways that you advertise as well as the total for all of your advertising.

To add a new subaccount:

  1. Create a new account.
    Note: The account type must be the same as the parent account. For example, if the parent account is an expense account, the subaccount must be an expense account also.
  2. Select the “Subaccount of” checkbox.
  3. From the list, choose the account that you want to be the parent account.
  4. Click OK.

To turn an existing account into a subaccount:

  1. Choose Lists > Chart of Accounts.
  2. Select the account you want to make a subaccount and click Edit at the bottom of the Chart of Accounts.
    Edit
  3. Select the “Subaccount of” checkbox. From the list, select the account that will be the higher-level account for this subaccount.
  4. Click OK.

Note: You can also select the account then drag and drop it under the name of the account you want to make it a subaccount of.

What happens

The balances of subaccounts are added to their parent account balance in the chart of accounts. The register of a parent account shows all the transactions in the subaccounts.

When you reconcile a balance sheet account that has subaccounts (such as a joint checking account), reconcile the parent account, so that you reconcile all transactions for that account.