The Sub-Account document is used to define an optional part of the accounting string that allows tracking of financial activity within a particular account at a finer level of detail. Instead of associating budget, actuals and encumbrances with an account, you can specify a sub-account within that account to apply these entries. Sub-accounts are often used to help track expenses when several different activities may be funded by the same account.
For example, a large organization may have money in a general account that is used by several different areas of that organization. The organization might segregate the budgets for each of the areas into Sub-accounts such as 'Marketing,' 'Research,' and 'Recruitment. When expenses are applied to the account they can be applied to the sub-account level, allowing direct comparisons between the budget and the actual income and expenditures of these smaller categories. Because all of the activity is still within a single account, it is still easy to report on the finances of the overall account.
The KFS also has a system that uses special sub-accounts to help track cost share associated with Contracts and Grants accounts. This works by establishing specially coded sub-accounts as part of a Contract or Grant account. These sub-accounts also have a designated Cost Share account. The Cost Share account is the account that is actually sharing costs with the grant. Expenses applied to the cost share sub-account are automatically reimbursed by the cost share account via an automatic transfer of funds generated by the KFS Cost Share batch process. This allows you to track what has been cost shared for a particular contract or grant account, while still appropriately applying the expense to a different account.
Sub-accounts also allow you to take advantage of the Financial Reporting Code. This is an optional sub-account attribute that can be defined by a particular organization and retrieved from the KFS via decision support queries.