Sub Ledgers

Overview

COS offers the ability to create sub ledgers instantly and on-demand. A sub ledger can be linked to any existing deposit account, also known as the master account.

In COS, sub ledgers are a first class citizen. All transactions first goes through a sub ledger, followed by the master account. Each master account has what is called an "implicit" sub ledger, which is automatically created and maintained. The implicit sub ledger accounts for the portion of the balance which is directly attributed to the master account's activity. This is done by giving it the same account number as the master.

With the use of an implicit sub ledger, a master account's sub ledgers will always sum to the balance of the master account. It is virtually impossible for your master account and sub ledger to be out of balance.

It’s also important to note that the master account's implicit balance can go negative. This would occur in situations where more funds are attributed to other sub ledgers than the master account directly. It is the responsibility of the partner to maintain and reconcile the sub-ledger system.

For API reference on sub ledgers click here.

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Real-Time Sub Ledger

The sub and master account balances are updated atomically and never out of sync. Funds posted to a sub account are immediately available from the master account.

Key Differences

You may be wondering whether you should be using master accounts or sub ledgers. You generally need to use master accounts (e.g. checking and savings accounts) if any of the following are true:

  • Customer of CRB is the end user, such that the tax ID on the account is the customer's tax ID.
  • Customers require monthly statements for each account
  • Customers require yearly tax documents

Sub ledgers are a better fit when:

  • The customer of CRB is the partner, such that the tax ID on the account is the partner's tax ID.
  • Unique account number aliases are needed to ease accounting and reconciliation of payments
  • All transactions should be reported on a single monthly statement

Account Numbers

Sub ledger numbers, as with all COS account numbers, are globally unique within the bank. Sub ledger numbers are 12 digits and follow this format:

3 [10 digit random number] [check digit]

Note: All sub ledger account numbers within COS start with the numeral "3".

In theory, it is possible to create millions of sub accounts under a single master account.

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Account Check Digit

All COS accounts use a luhn check digit to validate the other digits in the account number. For more information on the luhn algorithm click here.

Sample Sub Ledger

In this example, a checking account has been opened with an initial deposit of $500. Note that an implicit sub ledger with the same number has been created and is tracking the balance of the master.

Master Account #

Sub Ledger #

Balance

2000012345

--

$500

2000012345 (Implicit)

$500

Next, two sub ledgers are created at the request of the partner:

Master Account #

Sub Ledger #

Balance

2000012345

--

$500

2000012345 (Implicit)

$500

300007770001

$0

300007770002

$0

A wire for $500 is then sent to each of the sub ledgers:

Master Account #

Sub Ledger #

Balance

2000012345

--

$1500

2000012345 (Implicit)

$500

300007770001

$500

300007770002

$500

Finally, an ACH for $1,000 is pulled from the master account directly:

Master Account #

Sub Ledger #

Balance

2000012345

--

$500

2000012345 (Implicit)

($500)

300007770001

$500

300007770002

$500

Note that the implicit sub ledger is now negative, however the sum of the sub ledger still correctly reflects the master account's balance. It is good practice to transfer sub ledger funds to the master account before spending the money. Ideally the implicit balance should match the master balance.

Sub Ledger Types

COS supports two types of sub ledgers. The first type is called a pass-through ledger. In a pass-through ledger the sub ledger balance can go negative, and only the master balance will be used in transaction decisions.

The other type is called a direct ledger. Under a direct ledger the sub ledger balance will be used in transaction decisions. The implicit sub ledger cannot go negative.

A direct ledger system can be more difficult to manage, since in order to withdraw funds from the master account, the funds must be transferred from it's sub ledger accounts to the implicit master account. For this reason, it is recommended to use a pass-through ledger whenever possible.

Opening Sub Ledgers

Sub ledgers can be opened under any master account, such as a Checking or Savings account. The only information required is the master account number and Title field. The Title is typically set to the name of the partner. Sub ledgers also support a Beneficiary Profile for storing additional data such as the name and address associated with the ledger. Our integration team will assist you with any questions related to the data used to populate these fields, as they can vary by use case and program.

Once opened the sub ledger is ready to transact usually within a few seconds or less. Note that the various payment rails (ACH, Wires, etc.) may take a short amount of time to synchronize and become "aware" of the new sub ledger.

POST /core/v1/dda/subaccounts
{
  "masterAccountNumber": "2001231234",
  "title": "Acme Co",
  "beneficiary": {
    "referenceId": "ABC789",
    "entityName": "Acme Co",
    "streetAddress1": "400 Business Street",
    "streetAddress2": "Suite 123",
    "city": "New York",
    "state": "NY",
    "postalCode": "10025",
    "countryCode": "US",
    "phoneNumber": "2015551234",
    "emailAddress": "[email protected]",
    "notes": "Testing 123"
  }
}

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