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Use special accounts

Special accounts are custom subsidiary ledgers. In Manager, subsidiary ledgers are used to record related transactions, such as those pertaining to a single customer, supplier, or type of asset or liability. They are summarized in a general ledger control account. Only the control account is reported on the Balance Sheet to reduce complexity. The balance of a control account equals the sum of balances of its constituent subsidiary ledger accounts.

Manager includes several in-built control accounts that are activated as various functional tabs are enabled.

Examples
Accounts receivable is an in-built control account, where customer accounts are the subsidiary ledgers or subaccounts, and the sum of all customers’ balances equals the balance of the Accounts receivable account on the Balance Sheet.

Inventory on hand is another in-built control account. Its subsidiary ledgers or subaccounts are the various inventory items. A Balance Sheet would be too long if the value of every item in inventory appeared individually.

Some businesses may require special accounts because the in-built control accounts with their subsidiary ledgers are not suitable.

Examples
A real estate manager might require custom subsidiary ledgers to manage trust accounts for various properties in a portfolio. Rather than every property’s trust account being displayed separately in financial reports, they can be summarized in a control account named Trust funds payable. Yet funds associated with different properties are separately identified in their own special accounts.

A designer and manufacturer of robotic fabrication equipment receives large advance deposits with sales orders. Because delivery of its customized products typically takes 18 to 24 months, the company prefers more visibility into customers’ deposits than is furnished by Manager’s normal handling under Accounts receivable. So it creates a custom control account, Customer deposits in the Liabilities group and uses special accounts as subsidiary ledgers for various customers’ deposits. No matter how many customer deposits are received and eventually consumed, the Balance Sheet structure remains fixed from year to year, with only the one control account showing.

Enable the Special accounts tab

To create a custom subsidiary ledger, first enable the Special Accounts tab. Below the left navigation pane, click Customize, check the box for Special Accounts, and click Update:

Create the control account

While special accounts will automatically be assigned to a default control account named Special accounts, you should normally create a new control account on the Balance Sheet for every new category of special account. Go to Settings, click on Chart of Accounts, then New Account on the Balance Sheet (left) side of the screen:

When defining the new account, check the box to indicate it is a control account. A Made up of dropdown box will appear. Choose Special Accounts.

Example
The real estate property manager creates a control account named Trust funds payable:

You can have multiple control accounts which are made up of special accounts. This is useful if you require more than one category of custom subsidiary ledgers.

Create special accounts

Return to the Special Accounts tab and click New Special Account:

As you define each special account, select your newly created control account in the Control account field:

Example
The property manager creates a new special account for each property she manages. These all show under the Special Accounts tab:

Special accounts can be used for most transactions as if they are regular accounts. When the control account is selected for a line item on a transaction entry form, another field appears for the particular special account.

Example
The property manager receives rent from a tenant and records the transaction under the Bank Transactions tab as a receipt.

Other applications

Special accounts can be used for many purposes. If you have numerous loan accounts, rather than show them individually on a balance sheet, you can create all loans as special accounts within their own subsidiary ledgers, summarizing them in a single control account named Loans. This keeps your Balance Sheet concise enough to be easily analyzed, but lets you track what you owe on every loan.

You could also use custom subsidiary ledgers to track store credits given to customers (e. g., gift cards or customer loyalty program bonuses). When a customer wants to use store credit, you can easily check the available balance in the Special Accounts tab, then apply it to a receipt.

Example
John Smith buys a $500 item, but has a $400 gift card, entered as a special account under a Store credit custom control account. Even though John forgot to bring the gift card with him, the store can look up his balance and apply it on a sales receipt:



If John later brings the gift card to the store, trying to use the balance again, no credit will be available.


Note
Special accounts cannot be used for income or expense accounts on the Profit and Loss Statement side of the chart of accounts. They can only be used for Balance Sheet accounts in the Assets, Liabilities, or Equity groups.

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