What is a Posting in Accounting?

A posting, pertaining to accounting, is the transferring of entry or multiple entries from a subsidiary accounting book or journal to a suitable ledger account. 

An account post is usually done through a strict procedure that follows the creation of a journal entry from details of a particular transaction. Note that this is considered as the third step in the accounting cycle.

An account post will have to be completed before the finalization of the business’s annual financial statement. However, within that timeframe, an account post can be carried out at any time of day, depending on the nature and conditions of the business. 

posting in accounting

Accounting posts referenced in a journal are there to record the transaction and overall ledger account codes.

Rules of Posting in Accounting

In any form of accounting or business, rules for an accounting post may differ. However, there are a few general rules when creating an account post entry.

  • Rule 1: The date and time of a transaction must be stated in the post’s date section.
  • Rule 2: When making a debit post on a ledger account, be sure to source the credit account.
  • Rule 3: When making a credit post on a ledger account, be sure to source the debit account.
  • Rule 4: A reference on the actual entry on the accounting (and subsidiary) book must be made. 

Computerized Accounting System Postings

Nowadays, an entry for an account post has been fully automated and updated accordingly by accounting software. This software can update an entry directly on the general ledger.

Most accounting software oftentimes comes with its format module where a business or company can be able to choose an accounting function in line with its operations.

An example would be if a business implements a sales invoicing module, it can use the accounting software to send out an invoice to a client through a given module. The accounting software will then automatically create an account post that would debit the client’s account in an account receivable while also issuing credit to the sales revenue account in the general ledger. 

And so, if the business were to use an account payable module, an issued purchase invoice is delivered from a supplier and will serve as a credit to the module and main ledger. This would allow the account software’s system to automatically generate a debit entry on the most suitable expense account entry in the general ledger. Keep in mind that depending on the accounting software, its module can cover a variety of accounting post in a book for payroll, inventory control, processing of purchase and sales order, job costing, and bill of materials.   

Leave a Reply

Your email address will not be published. Required fields are marked *