Why would a firm use a subaccount?

A firm uses a subaccount primarily to segregate different types of payment activities, which facilitates easier reconciliation processes. Subaccounts allow organizations to track various transactions separately while still being connected to a main account. This segregation is especially beneficial for firms that handle multiple payment types, projects, or departments, as it provides clearer visibility into financial flows and helps ensure that discrepancies are easier to identify and resolve.

By organizing payment activities in this way, firms can streamline their reconciliation processes and maintain accurate records, ultimately improving financial management and reporting. This thoughtful structuring of accounts allows for enhanced control and transparency over funds, which is critical for effective financial oversight.