Sub Accounts in QuickBooks: How to Use, Create, Convert & Make Sub Account

A separate account that is nested beneath a bigger account or relationship is known as a sub account. The bigger account is named as a parent account and the small account is known as a sub account or child account. In QuickBooks you can easily organize your costs, income, and other account categories into various subaccounts. If you want to keep track of your multiple utility payments, such as gasoline, telephone, water, and other services, you may divide your different utilities account into different sub accounts.

These distinct accounts may hold documents, communications, and other helpful information, or they may include money that is maintained in a bank’s safeguarding account.

Sub accounts, an optional component of the accounting string, let departments and units to monitor financial activity inside a certain account at a more granular level. When more than one activity is supported by the same account, sub-accounts can be used to help keep track of revenue and outgoing costs. You can utilize subaccounts to further, for organizing your Chart of Accounts and produce more detailed reports by creating them underneath parent accounts.

Short Overview on QuickBooks

Intuit developed the accounting software application which is known as QuickBooks in the US, and it is currently used all around the world. QuickBooks is offered in a variety of editions, for the usage by different kinds of businesses and professions. Small and medium businesses mainly choose it because it is the accounting software which is easy to use and supports efficient bookkeeping.

With the help of QuickBooks, businesses can easily manage tax, invoicing, report preparation, and can perform many other account-related tasks. Cloud-based versions are offered for a monthly fee. The accounting program is reasonably priced, safe, and is always being updated to meet customer needs.

Along with other features like pre-authorization of electronic money and employee time tracking choices, QuickBooks also provides support features. Intuit also offers QuickBooks Online, a cloud service that allows users to access the program with a secure login after paying a membership fee. Regular upgrades and updates to QuickBooks are made by Intuit.

How to Use Sub-Accounts in QuickBooks

In order to keep your books organized and make reports simple to compile and read, QuickBooks gives you the option to set up sub accounts under various account headings. This allows you to track expenses not only by type, such as travel, but also by the kinds of things you might need to buy while travelling, such as meals, a rental car, hotels, and petty cash. Reports are prepared in such a manner that it is easier to read because all of these sub-accounts appear under the trip title. In your chart of accounts, you can add sub-accounts to any parent account of your choice.

Setting Up Sub-Accounts

The instructions which are explained below should help you to set up your sub accounts in QuickBooks:

• First of all, You have to select Chart of Accounts from the List menu by clicking on the list. Now, navigate towards the bottom of the window and click Accounts. From the list of accounts option, click on the New option.
• Now, You have to select your sub-account type by clicking on the type tab and from the drop-down menu of Type, select Income, Expense, Liability, Asset, or Bank as per your choice.
• It is not possible to utilize an Income account as a sub-account for an Expense account; Sub-account types must match the parent account type.
• In the Sub-Account of the box, Select a parent account by selecting it from the drop-down menu and checking the box.
• Choose the relevant tax line from the “Tax Line” drop-down list by clicking it. Always remember that you have to provide only your sub-accounts access to tax lines so that you can prevent double entries from appearing on your tax filings.
• In case, If you have been maintaining a spending log for your account then always enter a starting balance in that area. If you haven’t yet entered the account’s first transaction and it’s a new account, leave the beginning balance at $0.
• Now, Select OK button for the confirmation by clicking on it.

Using the Sub-Accounts

The steps that are described here should assist you in using sub accounts:

• First, You have to navigate to the Accounting Menu.
• Now, From the drop down menu of accounting, choose Write Checks option from the list of options.
• Enter a sum in the Amount field once you select a vendor from the drop-down menu of the vendor.
• Correct information for that check (vendors check) should be included in the check number and the date fields.
• To choose the correct sub-account, you have to click on the drop-down menu which is available next to the Accounts column.
• The amount section must be filled in with the entire check Amount.
• In case, If you typed a check for a sum that would be split between two separate sub-accounts then you have to change the sum next to the sub-account which you already selected and then repeat this process with the next line down.
• Once you are done with all the above steps, Just press save button in order to save all the changes which you have made.
• Lastly, You need to select the close button to exit from the screen.

Sub accounts are used to separate any reports that contain the parent account.

How to Create Subaccounts in QuickBooks Online using Chart of Accounts

In QuickBooks online, You will be able to break down your costs, income, and other items in more depth if you have created sub accounts. You can create a parent account’s subaccounts if you already have a primary account. Additionally, arranging the Chart of Accounts in QuickBooks Online with the help of subaccount can help you in maintaining the integrity of all the data.

Creating of New Sub Account

Follow the instructions which are listed below carefully to add a subaccount to an existing account. You may even open a new parent account if you need.

• First, You have to navigate to the setting icon and click on it in order to open it.
• Now, Select the Chart of Accounts option from the setting’s options.
• From the menu of chart of accounts select New.
• Then select the Account type and the Detail type of the account.
• Select a suitable parent account for this subaccount but after checking, the box must be labeled is sub-account.
• Enter the name of the subaccount a distinctive name, and if you like to include some brief description about the sub account then you can do it in the description field.
• Next, Click on the QuickBooks option for when do you want to start tracking your finances from this selected account.
• Once You’ve completed all the steps above, simply click the save button to keep all the changes you’ve made.
• If you want to leave the screen then click on the close button and exit from the screen.

Converting an Existing Account into Sub-Account

To convert the existing account in a subaccount, follow the instructions that are stated below:

• Press the gear icon. Then the Chart of Accounts will be open in the Settings.
• Now search for the account which you want to convert and then use the arrow to the right to select the Edit option.
• Select a parent account for this by checking the box that says “Is sub-account.“
• At last, You have to hit the Save icon and then Close.

Sub Accounts in the Chart of Accounts and Reports

Chart of Accounts

Your subaccounts will display like in the screenshot below when you access the Chart of Accounts in QuickBooks.

Reports

You must run a report in order to acquire a broader view and comprehensive information that includes your revenue, Expenses, and more.

Here is a screenshot of the profit and loss report. This report will provide you a general understanding of the company’s costs and revenues.

Removing of a Sub Account from the Chart of Accounts

Since these are needed by QuickBooks as a default accounts, such as your Sales Tax account, there are some accounts that you cannot delete in QuickBooks. In addition, to delete a subaccount, adhere to the directions provided below.

• Navigate to the gear icon and click on the gear tab.
• Now, Select settings and from the list of options of settings, click on the Chart of Accounts.
• After that, Search for the account which you want to remove right now by using the search bar.
• Following that, Choose make inactive by clicking on the Action drop down arrow.

How to Convert an Existing Account Into a Sub Account

All the parent accounts and the subaccounts in the Chart of Accounts must have the same type of account.

Start by making each subaccount a parent account so you may update the account types for all of the accounts in the group. After that, alter the parent account’s type and re-add each of the other accounts beneath it. In this way, you can change the type of existing account or sub account in QuickBooks.

Start with the subaccounts to alter the account types of the accounts, and when all of them have been altered, alter the parent account. Verify that you are in Accountant view before moving forward.

• Navigate to Settings and choose the chart of accounts from the option.
• Now, Search for the first subaccount which you want to modify.
• Select Edit from the Action column dropdown menu.
• To select a different account type, Click the Save account under menu.
• In the Tax form section, Choose the relevant detail type from the menu.
• Choose save button in order to save the changes.
• Changes to the Account Type may have an impact on your accounting and reporting, you are prompted.
• To change the account, Click yes button when prompted.

Follow these instructions once more for the remaining subaccounts, after which you should modify the parent account’s account type.

Returning of the Account to the Status of Subaccounts

When all of the accounts have the same account type, you can update the subaccounts to revert to their original subaccount designations and re-link them to the parent account.

Accounts can be upgraded to subaccount level by:

• Select Chart of Accounts under the Settings options.
• Return to a subaccount once you search the account.
• Select edit in the dropdown menu for the Action column.
• The save account under dropdown list should have the Parent account which is need to be selected.
• Finally, You need to press save tab for saving all the changes.

For every subaccount, repeat these procedures.

How to View Sub Accounts in QuickBooks?

To review the accounts, in addition to running a Quick report, you might want to try running a Transaction Detail by Account report. To get more information about transactions per account, adjust it to the parent and sub-accounts. So for that, follow the following steps in order to view the sub accounts in QuickBooks:

• Navigate to the top menu and then select the Reports option.
• In reports, Select Accountant & Taxes option.
• Click Transaction Detail by the Account.
• Check the box for the Customize of the Report.
• Now, Choose the Filters as per your requirement.
• Choose Account under the Filter tab.
• Click on the account drop-down and choose Multiple Accounts from it. The parent account and any sub-accounts should then both have a checkmark next to them.
• Then click OK and Exit from the screen.

How to Make Sub Account as a Master Account?

There are six simple steps which you have to follow to make sub account as a master account:

• Firstly, You have to access Your Account Online by logging in it with the help of your ID and Password.
• Now, Verify your eligibility for an Upgrade.
• Upgrade Your Account by selecting it.
• Read all the Information before you move forward.
• Accept all the terms and conditions.
• Once done with all the above steps then exit from the screen by hitting close button.

Conclusion

You now understand the straightforward processes for creating subaccounts in QuickBooks Online. Additionally, We’ve shown you how to convert an existing account into a subaccount or, If you no longer need it, remove it. If you need help in setting up a subaccount, you can also connect with our Dancing Numbers team by calling us or live chat messaging us for a prompt resolution.

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