Sub-ledger
Category
A sub-ledger is a specialized set of books that records transactions in detail for one part of a business and passes summarized entries to the general ledger. Accounts payable, payroll, and fixed assets are traditional examples. A machine-commerce sub-ledger does the same job for transactions initiated by software rather than people.
How it works
The general ledger holds one summarized balance per account. The sub-ledger holds every underlying transaction that produced it. When the period closes, the sub-ledger total must agree with the general ledger balance — that agreement is the control. Sub-ledgers exist because some transaction classes are too numerous or too specialized to sit in the general ledger directly.
Example
Northwind's agent generates 40,000 API charges in March. The general ledger shows one line: Data and Research Expense, $3,200. The sub-ledger holds all 40,000 individual charges, each linked to the agent that incurred it and the authorization it drew against. When an auditor asks which agent spent what, the answer is in the sub-ledger.
Common questions
What is the difference between a sub-ledger and a general ledger?
The general ledger holds summarized balances by account. The sub-ledger holds the individual transactions behind one of those balances. The sub-ledger total must reconcile to the general ledger balance.
Why would agent transactions need their own sub-ledger?
Volume and attribution. Forty thousand transactions in a month is unworkable in a general ledger, and each one needs to be traceable to the agent and the authorization that produced it — attributes a general ledger does not carry.