Subledger vs General Ledger: Differences (2024 Guide)

In accounting and finance, the tools used to keep an accurate record of transactions are completely essential. One of the most important instruments in this sense are accounting records. These are divided into two main categories: the general ledger and the subledger. Although both registries are essential, they have key differences that set them apart. In this article we will discuss these distinctions in detail, and examine how they can be used most effectively to help you maintain accurate and reliable accounting.

What is subledger?

A subledger is an accounting record that delves into the summarized information present in the general ledger. It acts as an appendix or supplement, providing specific details behind each general ledger item or category.

Imagine the general ledger as an executive summary of the company’s financial situation. It shows general categories such as accounts receivable, accounts payable, fixed assets, etc., but does not go into details. This is where the subledger comes in. Each ledger category can have its own subledger.

What is general ledger?

The general ledger functions as a centralized record that organizes and documents all of a company’s financial transactions. This record details income, expenses, assets and liabilities into specific accounts, facilitating analysis. By grouping transactions into categories, such as income or expense accounts, the general ledger allows for efficient identification of financial trends. In addition, it serves as the basis for preparing financial reports, including the balance sheet and income statement.

Subgledger vs general ledger: Main Differences

While the general ledger offers a general snapshot of your company’s financial situation, subledgers provide in-depth detail of it. We will tell you about the differences they present in more detail below.

The general ledger:

  • Records all the company’s financial transactions.
  • It is used to generate the trial balance and prepare financial reports such as the income statement, balance sheet, cash flow and profit and loss statement.
  • Transactions are classified into categories based on the chart of accounts.
  • Primary accounts typically include:
    • Assets: assets such as real estate, equipment, vehicles and materials, and current assets such as cash, inventory and accounts receivable.
    • Liabilities: Company debts, such as accounts payable and bank loans.
    • Income: earnings from sales, services provided and interest.
    • Expenses: purchases and invoices.
    • Equity: share capital, reserves, share premiums, etc

The subledgers:

  • They organize and detail general ledger information.

Let’s imagine “The Corner Store,” a convenience store that started as a small family business and grew. They needed to create subledgers to better understand their finances without navigating hundreds of transactions on the ledger.

The Corner Store now has the following subledgers that are integrated into the ledger:

  • Suppliers and bank loans:
    • Food and beverage suppliers
    • Suppliers of non-food products
    • Bank loan for inventory
    • Bank loan for equipment
  • Inventory:
    • Food and drinks
    • Non-food products
  • Business bank accounts:
    • Savings account
    • Current account
    • Credit card
  • Bills:
    • Payroll expenses
    • Rental costs
    • Electricity expenses
    • Advertising expenses

Example of ledger

Below is a simplified example of a general ledger for a small business, showing some transactions for October 2023:

Date Account Description Debit Credit Balance
October 1 Cash Initial balance 5,000   5000
October 5 Accounts receivable Sale to customer A 1000   6000
October 5 Inventory Supply purchases 500 500 5500
October 10th Accounts payable Payment reminder template  to supplier B   300 5200
October 15th Cash Customer receipt A   1000 6200
October 20 Rental costs Rent overdue payments 600   5600
October 25 Salary expenses Employee salaries 1500   4100

Why use subledgers? Benefits

The use of subledgers in accounting provides various benefits that simplify the financial management of a company. These benefits include:

Detailed organization

They allow a more detailed organization of financial transactions. By categorizing and dividing accounts into specific subaccounts, greater clarity is achieved on the details of income, expenses, assets and liabilities.

Precise analysis

They facilitate more accurate analysis of business operations. By having detailed information in each subaccount, business owners and accountants can closely examine specific aspects of the business, identifying areas of strength or possible improvements.

Facilitates audits and compliance

During tax audits or accounting reviews, subaccounts simplify the process. Instead of reviewing the entire ledger, auditors can go directly to the relevant subaccounts, streamlining verification of specific transactions and ensuring more efficient compliance.

Investor attraction

To attract investors or qualify for business loans, subaccounts offer a more detailed look at the company’s finances. Potential investors can examine specific subaccounts, such as accounts receivable or fixed assets, to better understand the financial health and growth potential of the business.

Simplification of financial reports

By summarizing subaccount information in the ledger, financial reporting is simplified. This facilitates the presentation of clear and concise data in the financial statements, which in turn improves the understanding of the business’s economic situation.

Why use general ledger? Benefits

The use of the ledger in business accounting is essential to be able to have control of the income and expenditure of money as well as an updated view of the money available at the moment. But not only this, it also provides benefits such as:

Preparation of financial reports

It serves as the basis for preparing various financial reports, such as the balance sheet, income statement, and cash flow statement. Any of these reports are essential for evaluating the financial health of the company and presenting key information to internal and external stakeholders.

Trend analysis

Classifying transactions into specific categories within the general ledger makes it easier to identify financial trends over time. This helps managers and owners better understand financial performance and make informed decisions for growth and operational efficiency.

Accounting and tax compliance

Maintaining an accurate general ledger is crucial to meeting accounting and tax requirements. Orderly and complete documentation of all transactions facilitates internal and external audits, as well as compliance with tax obligations.

Facilitates decision making

The detailed and organized information in the general ledger provides business leaders with a solid basis for making strategic decisions. It allows you to evaluate profitability, identify areas for improvement and design effective action plans.

Asset and liability tracking

The general accounts allow detailed monitoring of the company’s assets and liabilities, which is essential to evaluate liquidity, international debt collection capacity and efficiency in resource management.

Accounting books are essential to maintain order and efficiency of any business. But, it is also important to keep the total debt collection as minimal as possible. This, usually, apart from being complicated, is expensive. Time, money and labor must be invested. At Oddcoll we decided to make life easier for companies and created an easy and efficient asset recovery system. How do we do it? In 3 simple steps:

  • Create an account and send your invoices through the platform, API or CSV file.
  • Local partners, such as collection agencies and law firms, handle recovery in the debtor’s country.
  • Once the invoice has been collected, the money is transferred to your account.

In addition to being very easy to use, at Oddcoll we offer you other advantages such as:

  • Maintain direct contact with collectors through the case page.
  • Receive email updates on case progress.
  • Easily manage cases from your account pages, with access from anywhere.
  • In case of default, legal measures are taken in the debtor’s country through expert partners for effective judicial recovery.


In conclusion, the subledger and the general ledger are important tools used to maintain precise control of financial transactions. Both registries have their own functions and features, so it is important to understand when to use each of them. Used correctly, these tools can help businesses maintain reliability and accuracy in their financial records, which is essential for long-term growth and success.

4 min read.

  What regulations apply.
  The international collection process.
  How to achieve effective debt collection.

Oddcoll is a platform with Debt Collectors worldwide, enabling internationally- oriented companies to recover their overdue invoices with ease.

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Oddcoll is a service for international debt collection.
We make it easy for companies to get paid from their customers abroad.
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