Subledger Ties — Controller Guide
A subledger tie asks one question: do the items still open in a subledger add up to the balance of the account they post to? If Payables shows twelve unpaid bills, the accounts-payable account on the balance sheet should hold exactly those twelve. When it does not, either something was booked that no bill explains, or a bill exists that was never booked. This guide explains what the tie proves and why it survives cutover, then walks the exact clicks to set one up, read it, and sign it off each close.
For: controllers · Time: ~10 minutes · You'll need: the Accounting module, the general-ledger account each subledger posts to, and what that account held on the day your Arcvue ledger opened.
In the left nav, open Accounting → General Ledger → Subledger Ties (/accounting/subledger-ties). The page header reads Subledger ties. The close checklist runs the same tie for the last day of the period and shows the result there too.
Part 1 — The ideas you need first (read once)
It compares Arcvue against itself
Two other screens look like they answer this question and neither does. Bank reconciliation ties one cash account to a statement you key in. Parallel run compares Arcvue's ledger against the system it is replacing — useful now, and meaningless the day that system is switched off. A subledger tie compares Arcvue's own detail (open bills, open invoices) against Arcvue's own control account, so it keeps asking the same question after cutover. That is why it belongs on the close checklist rather than on the parallel-run dashboard.
Seven subledgers today
| Subledger | The open items | Posts to | Compared at |
|---|---|---|---|
| Accounts payable | Vendor bills not yet paid or voided | The payables account(s) you designate | Amount outstanding |
| Accounts receivable | Customer invoices not yet collected or voided | The receivables account(s) you designate | Amount outstanding |
| Fixed assets at cost | Assets still on the register | The asset cost account(s) you designate | Gross original cost |
| Prepaid expenses | Prepaid items not yet written off | The prepaid asset account(s) you designate | Remaining balance |
| Debt outstanding | Every active instrument on the debt register | The notes-payable principal account(s) you designate | What is owed: the lender's own balance for a bank-linked loan, the note's installment schedule for a note |
| Accrued payroll | Register lines earned on or before the date and paid after it | The accrued-payroll account(s) you designate | Gross pay on the labor pay codes (pass-through codes excluded, as the ledger excludes them) |
| Intercompany | None — it is a mirror | Every due-to and due-from account between the entities of these books, all sides | The net across entities, which must be zero |
Three things the newer ties do that the first four do not, and each is the tie being honest rather than being difficult:
- Debt values each instrument from the best source it has, and names the ones it cannot value. A loan with a bank feed is valued at the lender's own balance on or before the date; a seller note or earn-out at its face less every installment due by then. An instrument with neither is listed as not valued and the tie reads Cannot be judged — it will never put a zero on a liability, because a zero reads as paid off. Accrued interest is a separate account and is not part of this tie.
- Accrued payroll refuses a date the payroll register does not reach. If a company's register runs stop short of the date — measured against that company's own pay cadence — the tie says so by company and reads Cannot be judged rather than treating the missing runs as nothing owed. It also names any pay code with no mapping, and excludes pass-through codes exactly as the posting engine does.
- Intercompany has no items to sum. Designate every due-to and due-from account between your entities — both sides — and the tie checks that they net to zero, showing each entity's side. A receivable from a separate company that is not one of these books' entities is not intercompany; do not designate it here.
Cannot be judged is a third state beside Agrees and Does not agree. The card says what is missing; supply it and read the tie again. Signing off a tie in that state asks why, the same way signing off a difference does.
The last two compare on different bases, and that is correct rather than an inconsistency. It is the first thing a controller notices, so it is worth stating plainly:
- Fixed assets tie at GROSS cost, not net of depreciation. Depreciation never touches the cost account — it credits a separate accumulated depreciation contra — so the cost account moves only when you capitalize an asset or dispose of one. The sum of original cost over assets still on the register is exactly what that account should hold. Netting depreciation off the subledger side would break a tie that is right, by making it answer a question the control account was never asked.
- Prepaid ties at the REMAINING balance, not the original. There is no contra here: amortization credits the prepaid asset account directly, so the control account already carries the relief. Comparing it against original cost would report the entire amortized-to-date balance as a difference, every month, with nothing to clear.
Two things you have to state first
Neither can be worked out from the data, which is why the page asks rather than guesses.
Which accounts the subledger posts to. The balance sheet groups more than payables under its Accounts Payable line — accrued expenses, employee reimbursements, credit cards and fee accruals can all sit in that group. Tying bills to that whole group would report a difference every month that nobody could clear, so the control accounts are named separately here. One subledger can have more than one control account (billable and non-billable vendor payables are commonly split); add each one and they are summed.
What the account held when the ledger opened. Arcvue posts from the date its ledger started, so payments for bills received before that date appear with no matching bill behind them. Until you state the opening balance, the account will look wrong for a reason that has nothing to do with your books.
One thing you may state once a year: materiality
A difference of a few dollars on a control account is not an open item, and a checklist that flags it every month teaches people to scroll past the checklist. So each fiscal year you may state, per subledger, the threshold below which a difference is an immaterial residual: a percent of the account balance, of fiscal-year revenue to date, of total assets, or a fixed amount. It is your election — Arcvue never infers one — and it is recorded with your name and the date; a later election for the same year supersedes the earlier one and the earlier one stays on the record.
What it changes is only what the close concludes: a tie whose difference sits inside the threshold reads Within threshold, and the close checklist names the residual instead of flagging it. The difference is still computed, still shown, and still signed. It never applies to the bank reconciliation, which is to the penny, and it never rescues a tie that cannot be judged.
What Arcvue deliberately will not do
- It won't guess a control account from the balance-sheet grouping, and it won't guess an opening balance. Both are stated by you and recorded with who stated them.
- It won't block a close over a difference. The close checklist flags it (see Part 3): a controller routinely closes with a known, documented reconciling item, and what matters is that nobody closes without knowing.
- It won't report a clean tie it never ran. A subledger with no control account or no opening balance reports Not set up, and the close checklist says so.
- It won't accept a sign-off on an out-of-balance tie without an explanation, and it won't let one person's signature count as a review.
Part 2 — How to run it
Step 1 — Designate the control accounts (once per subledger)
Open the page and scroll to the two setup cards. Under Control accounts, pick the subledger, type the general-ledger account it posts to (for example 21.11.11), and add it. Add a second one if the subledger posts to more than one account. Each row has a control to remove that account from the subledger it is designated for.
A designation is reversible, and it is meant to be. Removing one deletes it outright rather than end-dating it — a designation is a statement about your chart as it stands today, not a historical fact, so a mis-typed one should not be permanent. Remove it and add the right one.
But do not guess one to get started. A subledger with nothing designated reports Not set up and reconciles nothing, which is loud and harmless. A subledger pointed at the wrong account produces a confident wrong reconciliation — and that is worse than none, because it looks like assurance. If you are not certain which account a subledger posts to, leave it unset and find out; the tile will keep telling you it is unset.
Step 2 — Record the opening balance (once per subledger)
Under Opening balances, enter the Opening date — the date the ledger window opened, which is where entries begin — and the Balance on that date in dollars and cents (for example 41000.00). Until both cards are filled for a subledger, its tile reads Not set up and nothing is reconciled.
Where that number comes from: it is not derivable and Arcvue does not try — the ledger is go-forward-only, so everything before the window opened is invisible to it. This is your statement, exactly the same shape as the statement balance you key into a bank reconciliation: what that control account held on that date, according to whatever was authoritative for it at the time.
State it on the same basis the tie uses, or you will report a difference every month that never clears: gross original cost for fixed assets, remaining balance for prepaid, amount outstanding for payables and receivables. The Compared at column above is the basis for each.
The buttons are Add account on the first card and Record balance on the second, and each stays disabled until its field has something in it — so a card that will not submit is telling you a field is still empty, not that the save failed.
Step 2b — State the materiality threshold (once a year, optional)
Under Materiality for FY… at the foot of the page, pick the Subledger,
the Basis (percent of the account balance, percent of fiscal-year revenue
to date, percent of total assets, or a fixed amount), enter the Percent
(for example 0.50 for half of one percent) or the Amount in dollars,
and press Set for FY…. The panel lists what is in force for each
subledger and who stated it. The fiscal year is the one the As-of date falls
in, using your fiscal year-end setting.
Step 3 — Pick the date and read the statement
The As of control at the top defaults to today. Set it to the last day of the period you are closing, then press Reconcile. Each subledger renders as a tile headed Agrees, Does not agree, or Not set up, with the figures adding up in order:
| Line | What it is |
|---|---|
| Opening balance at <date> | What you said the account held when the ledger opened |
| Posted since (N entries) | Everything the ledger has put in the control accounts after that date |
| Control account balance | The two added together — what the ledger says |
| Subledger open items (N) | The sum of what is still open in the subledger on this date |
| Difference | The ledger balance less the subledger |
Anything other than zero on the last line needs an explanation before you close. A difference is not automatically an error — a bill received on the 10th that posts next month is a legitimate timing item — but it has to be understood rather than carried forward quietly. Press what these are built from on any tile to see the control accounts and opening balances behind its figures.
None of the four subledgers records the date an item left it — a bill or invoice voided, an asset disposed of, a prepaid written off. So a tie run for a past date understates the subledger by anything removed since. The tile shows how many such items exist on or before the date so you can judge whether it matters. Run the tie on or near the last day of the period, before you void, dispose of or write off anything from that month.
Step 4 — Sign it off, then have it reviewed
Each tile carries a sign-off strip. Press Sign off <period> to record that you reconciled this subledger for the period. If the tie does not agree, the button stays disabled until you fill What accounts for the difference (for example bill received 7/10, posts in August) — an out-of-balance tie cannot be signed without saying why. The strip then reads Reconciled for <period> by <you> and, until a second person acts, Not yet reviewed.
A second person presses Review to record that they looked at it. Who may review is decided by your Approval Routing rules for period close — the same engine that decides who may approve a payable — so a rule that forbids self-approval stops the preparer from reviewing their own tie. A reconciliation nobody signed is a number on a screen; one signed twice by the same person is not a control, and the strip never reports a preparer alone as complete.
The sign-off stores the figures as signed. A tie recomputes as bills are paid, so what you signed on the 3rd is kept even after the live tile has moved on.
Part 2c — Labor dollars: the register against the ledger, and the quarterly filing
The seven ties above compare open items against a control account. The two panels at the bottom of the page answer a different question about payroll: does what the payroll provider actually paid agree with what the ledger expensed? The ledger's wages come from timecards and pay rates; the register's come from the provider; every payroll tax filing is built from the register. Nothing else on the platform compares them.
Labor dollars — register to ledger
Pick the Month. The panel bridges the register from its pay-date basis to the month the labor was earned — paid in the month, less earned earlier and paid now, plus earned now and paid later (the same accrual definition the accrued-payroll tie uses) — and sets that against net debits on every wage account the tenant uses: the accounts the pay-code mapping books wages to, plus the accounts the timecard rail posts labor to. Nothing is hardcoded. One of four verdicts:
| Pill | Meaning |
|---|---|
| In balance | Worked-basis register equals the ledger's wage accounts to the cent |
| Within threshold | A difference inside the payroll materiality you stated for the fiscal year; named, not absorbed |
| Differs by … | Ledger minus register; the account table below shows which account carries it |
| Cannot be judged | The engine refused, and lists why: a company's register feed stops short of the month end or has a hole inside it (a run that never arrived), no run was paid in the month, or no wage account is known |
The account table beneath the figures lists every wage account with its Register (worked basis), Ledger and Difference. Until Arcvue's own ledger is authoritative for the month it also shows Arcvue postings — what Arcvue's own labor rail and the other producers put on that account this month — so the preview line under the figures ("Arcvue's own postings this month") has a visible composition, and an account only Arcvue posts to (SCA direct labor, overhead or G&A labor) appears with a zero register and a zero ledger rather than being hidden. Once the promotion makes Arcvue's ledger authoritative, the Ledger column is that read and the extra column goes.
An unmapped pay code keeps the tie out of balance until it is mapped — its amount is named in amber rather than dropped. Pass-through lines (the provider's own money movement) are excluded on both sides by design.
Quarterly payroll tax filings (Form 941)
Per payroll company and quarter, click Record filing and enter what the filing reported — wages (line 2), federal income tax withheld (line 3), taxable Social Security wages (5a), taxable Medicare wages (5c) and total taxes (line 12) — choosing Form 941 when the company files under its own EIN or Schedule R allocation when a PEO files on its behalf. The row then shows the filing's wages beside the wages the register paid in the quarter, with the ledger's quarter for context. Wages can be compared; taxes are recorded, not recomputed — the register carries no withholding or FICA lines, and the panel says so. A difference is shown, never absorbed: pre-tax deductions and wage-base caps are the usual explanation, and the note on the filing is where you name it. Filings are append-only; Record correction writes a new row that supersedes the old one.
The two fields that are not figures: Filed on is the date the filing was submitted — it is optional, so leave it blank if you do not have it rather than inventing one — and Note (what explains the wage difference, if any) is where the explanation lives. The field prompts you with the usual one, "pre-tax deductions reduce line 2 below gross", and the note is kept with the filing, so a correction later carries its own explanation instead of leaving a bare difference on the row. Cancel closes the form without recording.
Part 3 — At close, and when something looks wrong
On the close checklist, the tie appears under Compliance as a flag, run for the last day of the month being closed. It passes when every configured subledger agrees, fails when one does not (naming which, with Review landing you here), and reads not applicable when nothing is set up yet — with the detail saying exactly that, so the checklist itself is where an operator learns the tie exists. A difference inside the materiality threshold you stated does not fail it; the detail names it as an immaterial residual. A tie that cannot be judged on the date is named with its reason, never counted as agreeing. Like every flag it warns rather than blocks, unless your company has chosen to make it a hard stop (see Close a Month).
"The tile says Not set up." One of the two setup cards is empty for that subledger. Add a control account and an opening balance; the tile starts answering at once.
"It says this database has not been brought up to the schema this reconciliation needs." Your tenant's accounting database is behind the migration this page depends on. Nothing is wrong with your data — the tie simply cannot run here yet. Ask your administrator.
"The difference is exactly a bill I know about." That is a timing item. Sign off with the explanation naming it; it clears itself when the bill posts.
"The difference is large and I cannot explain it." Do not sign it off. Open the control account in the Books for the window and look for postings that no bill or invoice explains — a manual journal entry to a payables account is the usual cause. Correct it, then re-run the tie.
"It refused my sign-off, saying the period is already signed off." There is one sign-off per subledger per period, and it cannot be redone from this page — so check the As of date before you press it. The period signed is the month the As-of date falls in.
One-line summary
On Accounting → General Ledger → Subledger Ties, name each subledger's control account(s) and its opening balance once, then at every close set As of to the last day of the month, press Reconcile, explain any Difference, Sign off, and have a second person Review. The close checklist runs the same tie and flags a subledger that does not agree; it blocks the close only if your company has made that check a hard stop.
Related
- The close this feeds → Close a Month (Period Close)
- Who may review a sign-off → Approval Routing
- The other reconciliation, cash against the statement → Bank Reconciliation
- The bills and invoices being tied → Accounts Payable · Accounts Receivable