Posting Accounting Definition

What is posting in accounting?

The balances in sub-ledgers and the general journal are transferred into the general ledger during a posting in accounting. The whole balance in a sub-ledger is transferred to the general ledger when posting, not the individual transactions in the sub-ledger. An accounting manager may choose to submit data infrequently, such as once a month, or more regularly, such as once a day.

Sub ledgers are only utilized when a certain accounting area, such as inventories, accounts payable, or sales have a high volume of transaction activity. As a result, posting is only applicable in certain high-volume scenarios. There are no sub-ledgers and thus no requirement for posting in low-volume transaction conditions because entries are made directly into the general ledger.

For example, ABC International sends 20 invoices to its customers over the course of a week, with total sales of $300,000 in the sales sub-ledger. ABC’s controller enters a posting entry with a $300,000 debit to the accounts receivable account and a $300,000 credit to the revenue account to shift the total of these sales into the general ledger.

When a parent business keeps separate sets of books for each of its subsidiary companies, posting is also employed. Because each subsidiary’s accounting records are virtually the same as sub-ledgers in this scenario, the account totals from the subsidiaries are recorded into the parent company’s. A manual consolidation operation can also be performed on a separate spreadsheet.

In some accounting systems that do not use sub-ledgers, posting has been discontinued. Instead, all data is saved directly in the accounts mentioned in the general ledger.

When posting is used, someone looking for information in the general ledger must “drill down” from the account totals posted into the relevant general ledger accounts and look for details in the applicable sub-ledgers. This may necessitate a substantial amount of extra research.

Posting is one of the essential procedural processes required before financial statements can be generated from the perspective of closing the books. All adjustment entries to the various sub-ledgers and general journals must be made during this phase, and their contents must then be posted to the general ledger. It is typical to put a lock-out flag in the accounting software at this point, preventing any further modifications to the sub-ledgers and journals for the accounting period in question. The next accounting period’s access to the sub-ledgers and journals is then granted.

The totals in the general ledger, as well as the financial statements derived from the general ledger, will not be accurate if posting is not done correctly as part of the closing procedure.

Recording vs. Posting in Accounting

During the course of business operations, the accounting cycle comprises updating, amending, and validating financial transactions. Accounting’s recording and posting are both parts of this cycle, and while they may sound identical, their duties are vastly different. Accountants keep track of financial information and post it in a specific order.

When making choices, outside parties look to the posts in the company’s accounting accounts, not the recordings. For a variety of reasons, investors, stockholders, financial-rating agencies, and the Internal Revenue Service want to know what was recorded in ledgers after the fiscal quarter or year. Investors, for example, want to examine the revenues and liabilities you recorded in the general ledger to assess the company’s health. The information you documented in your accounting diaries is unimportant to investors.

Location

Accountants keep their recorded and posted numbers in different areas. When a financial transaction occurs, it is recorded in the appropriate part of the accounting journal. When an accountant enters a number or a financial transaction into the general ledger, she creates an entry in the ledger. The accounting journal serves as the scratchpad for a math problem, while the general ledger serves as the final answer.

In accounting, the figures that are recorded and presented come from two different places. Posted entries are produced from the addition of income and deletion of liabilities in the accounting journal, whereas recorded entries are produced from the company’s daily financial activities. In the accounting journal, for example, corporations accumulate their revenue throughout the year and remove their obligations and expenses. The accountant can then submit the number to the ledger after it has been validated and double-checked.

Proof of Numbers

Receipts and invoices serve as proof for entries in the accounting journal, whilst the balancing of the recorded numbers in trial balances serves as proof for figures that accountants publish in the general ledger. It’s as simple as looking over all of the receipts collected during the year to verify that recorded financial entries are appropriately documented in the accounting journal. However, uploaded items in the general journal are not validated as correct until the accounting journal’s assets, liabilities, and equity balance.

Aaron Marquis is a graduate of the University of Texas who has written commercials and press releases for national advertising agencies, as well as comic television treatments and storylines for FOX Studios and HBO. For the past six years, Marquis has been writing.