Posting is the bookkeeping step of transferring the amounts recorded in a journal to the individual accounts in the general ledger or a subsidiary ledger. Each debit and credit in a journal entry is copied to the account it names, and that account's running balance is updated. Posting is the second step of the accounting cycle, coming after transactions are journalized and before a trial balance is prepared.
Posting turns a date-by-date record of transactions into an account-by-account record. The general journal tells a reader what happened on each day, while the general ledger tells a reader how much cash, inventory, debt or revenue the business has in total. In manual bookkeeping, posting was done by hand, often daily or at month-end. In accounting software and enterprise resource planning (ERP) systems it happens automatically when an entry is saved.
Posting in plain terms
Imagine keeping a diary of every money event in a small business: rent paid on Monday, a sale on Tuesday, a supplier bill on Wednesday. The diary is complete, but it cannot tell you quickly how much rent you have paid this year or how much is left in the bank.
Posting is the job of copying each diary line into a set of labelled folders, one for cash, one for rent, one for sales, and so on. Once everything is in its folder, the owner can open any folder and see its total straight away. Nothing new is recorded during posting. The same information is simply sorted into the place where it is most useful.
How posting works
In a manual system, a bookkeeper posts each journal entry line by line in the following order:
- Find the ledger account named on the first debit line of the entry.
- Enter the date, the amount in the debit column and the journal page number as a reference.
- Work out the account's new balance.
- Write the account number in the posting reference column of the journal, showing that the line has been posted.
- Repeat the same steps for every remaining debit and credit line.
The cross-references run both ways: the ledger points back to the journal page, and the journal points forward to the account. Together they form an audit trail that lets anyone trace a ledger balance to the original entry and its source document.
Worked example
On June 5 a company pays $2,400 for June office rent. The journal entry is a debit to rent expense of $2,400 and a credit to Cash of $2,400. Before posting, the Cash account has a debit balance of $15,000 and Rent Expense has a zero balance.
After posting, Rent Expense shows a debit balance of $2,400, because debits increase expense accounts. Cash shows a debit balance of $12,600, because credits decrease asset accounts. Under double-entry accounting, every posted entry adds the same amount to the ledger's debits as to its credits, so the ledger as a whole stays in balance.
Posting to subsidiary ledgers
Many businesses keep detail outside the general ledger. A credit sale is posted to the customer's own account in the subsidiary ledger and, in total, to the accounts receivable control account. Special journals such as the sales journal and the cash receipts journal speed this up: individual lines are posted to customer or supplier accounts daily, while column totals are posted to the general ledger once a month. At period-end, the total of the subsidiary accounts should equal the balance of the control account.
Posting errors and how they are found
- Posting to the wrong account. The ledger stays in balance, so the error is usually found only through review or reconciliation.
- Transposition. Entering $540 as $450 creates a difference of $90; a difference evenly divisible by 9 often points to this mistake.
- Posting to the wrong side. Entering a debit as a credit makes the totals differ by twice the amount.
- Omission. Skipping one line of an entry leaves the debits and credits unequal.
Preparing a trial balance reveals errors that unbalance the ledger, but not those that leave it in balance. Once found, an error is fixed with a correcting entry rather than by erasing the original posting.
Posting in computerized systems
In modern software, posting usually means finalizing an entry so that it updates the ledger. A draft entry can be edited, but a posted entry can only be reversed, which keeps the history intact for a journal audit. When a month or year is closed, the system locks that period so that no further entries can be posted to it without authorization.