What Are Control Accounts and Why Do They Require an Authority Code?

Control Accounts are summary-level accounts within your nominal ledger that aggregate transaction totals for specific categories. This guide explains the purpose of control accounts, the risks associated with manual postings, and why Navigator requires authority codes for these accounts.

What Are Control Accounts?

• A Control Account summarises balances from related ledger accounts and acts as a link between the nominal ledger and subsidiary ledgers.
• Example:
  • The Sales Ledger Control Account aggregates the total balance of all sales ledger accounts.
  • Nominal code: 0.0.60.1.

Common Characteristics of Control Accounts

1. Prefix Codes:

   • Most control accounts in Navigator start with 0.0...
   • Exceptions include accounts like New Vehicle Stock (nominal code: 1.30.60.80), where the nominal code incorporates branch and department details.

2. Aggregated Totals:

   • Control accounts summarise transaction categories such as sales, purchases, and stock balances.

3. Nominal Code Structure:

   • For details on how nominal codes are structured, refer to the related guide:
     Guide on How Nominal Codes Are Structured.

Risks of Manual Postings to Control Accounts

• Ledger Imbalances:

  • Manual nominal journals only affect the nominal ledger, not the associated subsidiary ledger.
  • Posting directly into a control account can cause imbalances, as the ledger itself remains unaffected by the journal entry.

• Impact:

  • Discrepancies between the control account and its related ledger can lead to financial reporting errors.

• Relevant Articles:

  • Reversing a Journal - When Should It Be Avoided?. 

Why Authority Codes Are Required

• Purpose:

  • Navigator requires authority codes for most control accounts to minimise the risk of accidental postings that could create imbalances.
  • This restriction ensures that changes to control accounts are intentional and authorised.

• Configuration:

  • Authority codes can be configured in:
    Setup > General Setup.

Scenarios Where This Guide Is Useful

• Understanding the role of control accounts in financial reporting.
• Preventing imbalances caused by unauthorised or incorrect postings.
• Configuring Navigator to maintain control over sensitive accounts.

Key Notes

• Control Account Purpose: Aggregates totals from subsidiary ledgers to streamline reporting.
• Risks of Manual Postings: Manual journals impact only the nominal ledger, not the underlying ledger.
• Authority Codes: Designed to safeguard control accounts and ensure accurate financial management.