Subledgers

 Requirements

Basic legal requirements are laid down in the art. 17 of Accounting Act. 

Analytical accounts are a refinement of synthetic accounts by detailed single accounts - called a sub-ledger.  

Some sub-ledgers have specific names - for example, the subledger for the "Fixed Assets" account is called "Fixed Assets Register". 

Based on the accounting law, sub-ledgers (analytical accounts) are used for the following synthetic accounts: 

• fixed assets and intangible assets - register of fixed assets, 

• transactions with suppliers and customers - analytics of payables and receivables, respectively 

• transactions with employees (payroll, credit cards used, other benefits etc) 

• costs 

• sale 

• other assets or liabilities relevant to the enterprise. 

Some accounts require separate "analytics" by law. This is the case, for example, for an employee payroll account. Only the aggregate amounts of receivables from employees and the aggregate amount of payroll costs are posted to synthetic accounts. In the sub-ledger, information on the remuneration of individual employees, their bonuses, penalties, etc. is kept. Access to the remuneration book is limited to a small number of people, which allows keeping the details of individual employees and their remuneration secret. 

EXN Poland maintains subledgers for: 

• Customers 

• Vendors/suppliers 

• Employees related to credit cards 

• Employees related to travel expenses 

• Employees related to other benefits 

• Fixed assets 

• Inventories 

• Sales (reconcilable to Sales VAT register) 

• Costs (reconcilable to Sales VAT register) 

Posting on subledgers (analytical accounts) is subject to certain rules that ensure their consistency with synthetic accounts and the consistency of the entire accounting system: 

• Repeatable entry - Posting to the analytical account is an exact reflection of the posting to the synthetic account. The posting is made in the same amount and on the same side as in the case of posting to the synthetic account. This is literally a copy of the posting in the synthetic account. 

• Completeness of analytical accounts - The analytical accounts of a given synthetic account cover all transactions recorded in the synthetic account, which means that: 

  • The sum of the turnover on all analytical accounts of a given account is equal to the sum of the turnover of the synthetic account. 

  • The sum of the balances of all analytical accounts of a given account is equal to the balance of the synthetic account. 

In fact, it should be not allowed to post some transaction to general ledger synthetic account without posting to analytical account in subledger. Reconciliation between general ledger and subledger should be performed. 

As subledgers are extension to trial balance of general ledger all rules for the statements are similar to these statements. Basically, this report must include: 

1. account symbols and/or names, 

2. account balances as at the day of opening the books of accounts (separately debit and credit), turnover for the reporting period and cumulatively from the beginning of the financial year, and balances at the end of the reporting period (separately debit and credit), 

3. the sum of balances (separately debit balances and credit balances) as at the day of opening the books of accounts, turnover for the reporting period and cumulatively from the beginning of the financial year, and balances at the end of the reporting period (separately debit balances and credit balances). 

In addition, the turnover and balance statement (sub-ledgers trial balance), like any other book of accounts, must have the formal elements indicated in Art. 13 sec. 4 of the Accounting Act, i.e.: 

• name of the legal entity to which it applies, 

• indication of the financial year, 

• indication of the reporting period, 

• date of preparation (generation), 

• name (title of the book) "Subledger turnover and balances of xxx (AR or AP or Fixed assets register etc) " (in Polish “Zestawienie obrotów i sald księgi pomocniczej xxx”) 

• computer printouts of accounting subledgers should consist of automatically numbered pages, marked with the first and last page, and be totaled on consecutive pages continuously during the fiscal year. 

• the sum of the debit turnover of all accounts should be equal to the sum of the credit turnover,

• the sum of the debit balances of all accounts should equal the sum of the credit balances. 

In addition, it should be noted that the books of accounts can be considered as kept on an ongoing basis if the trial balance of the subledger accounts is prepared at least for individual reporting periods, not less frequently than at the end of the month, within a period enabling the preparation of financial statements and other reports applicable to the entity, including tax returns, and making financial settlements (Article 24 sec.5 of the Accounting Act). 

Article 17 on accounting 

The scope of data in the subledger accounts 

1. Sub-ledger accounts are kept in particular for:

   1. fixed assets, including fixed assets under construction, intangible assets and depreciation or redemption write-offs made on them;

   2. trade receivables and trade payables with contractors;

   3. Receivables and payables with employees, in particular as personal records of employees' salaries ensuring obtaining information from the entire period of employment;

   4. sales operations (sequentially numbered own invoices and other evidence, with the detail necessary for tax purposes); 

   5. purchase operations (third party invoices and other evidence, with the detail necessary to value assets and for tax purposes); 

   6. costs and significant assets for the entity;

   7. cash operations in the case of running a cash register.

2. The management of the entity, taking into account the type and value of individual groups of tangible current assets held by the entity, decides to apply one of the following methods of keeping auxiliary ledger accounts for these groups of assets:

   1. quantitative and valuable records, in which turnover and stocks in natural and monetary units are recognized for each component;

   2. quantitative records of turnover and stocks, kept for individual components or their homogeneous groups only in natural units. The value of the state is measured at least at the end of the reporting period for which income tax settlements with the budget are made, based on actual data;

3.  Value records of turnover and stocks of goods and packaging, kept for retail outlets or storage places, the subject of which are only revenues, expenditures and the status of the entire stock;

4. Writing off the value of materials and goods as at the date of their purchase or finished products at the time of their manufacture, combined with the determination of the status of these assets and its valuation, and the adjustment of costs by the value of this status, no later than as at the balance sheet date.