What is posting?
Recording a journal entry into the general ledger accounts.
Definition
Posting is the act of recording a journal entry into the general ledger accounts. After posting, each account in the ledger carries a running balance that includes that entry.
In the books, posting is the move from the dated record to the accounts themselves. The journal still holds the original two-sided entry, and the ledger is where those amounts now live.
Where it shows up
Balance Sheet: Related to the accounts the posted entry hits.
P&L: Related to any income or expense account the posted entry hits.
Cash flow: Related to cash only if a cash account was posted.
See also: Journal Entry · General Ledger · Trial Balance
You do not see a posting line on the statements. You see the account balances after the amounts have been written into the ledger.
On the Balance Sheet, cash and accounts receivable only change once the collection has been posted. Until then, the dated record exists, but the account balances have not moved.
On the Income Statement, revenue and expenses change the same way. The earning or the cost lands in the ledger only after posting.
Cash flow changes only if a cash account was posted. A posted collection raises cash, and a posted payment lowers it.
How it works
A journal entry is written first. It names the accounts, the date, and the equal left and right amounts.
Posting then copies each of those amounts into the matching general ledger account. Cash gets its line, and accounts receivable gets its line.
After posting, each ledger account has a new running balance. That running balance is what later reports read.
A Trial Balance is printed from posted balances, not from unposted drafts. If an entry is still sitting in the journal, it will not appear on that listing.
Software often posts in one click. The mechanic is the same: the dated record is written into the accounts.
Some accounts have a subledger behind them, such as receivables by customer. Posting the control account and posting the customer detail are still the same act: writing the entry into the ledger.
Period lock stops further posting to a closed month. That lock does not rewrite old postings, and it only blocks new ones.
An invoice or a vendor bill is the source document that supports the entry. Posting is not that source; it is the step that puts the entry into the accounts.
Example
A florist has a $400 cafe collection written as a journal entry. Posting moves that $400 into the cash account and into accounts receivable.
Cash's ledger balance rises by $400. Accounts receivable's ledger balance falls by $400.
The florist did not write a second journal. The same dated record is now inside the general ledger accounts.
Until posting happened, the collection was only a journal line. After posting, the Balance Sheet cash and receivable figures include it.
Common mix-ups
Posting is not a new journal entry. It is the act of writing an existing entry into the ledger accounts.
Posting is not the same as printing a Trial Balance. The Trial Balance is a listing of posted balances, and posting is how those balances got there.
Posting is not the source document. The invoice, receipt, or bill supports the entry, and posting is the later step that records that entry in the accounts.
Posting is not a reversing journal entry or an adjusting journal entry. Those are different dated records, and posting is simply how any of them, including an ordinary collection, reaches the ledger.
Related terms
- Journal Entry: A dated record of debits and credits posted to the ledger.
- General Ledger: The master record of every account and every posted transaction.
- Trial Balance: A listing of every ledger account balance, used to check that debits equal credits.
- Subledger: A detailed ledger behind a single control account, such as receivables or fixed assets.
- Accounting Period: The span of time a set of financial statements covers.
- Audit Trail: The traceable chain from a reported number back to its source document.
- Source Document: The original receipt, bill, or statement that supports an entry.
- Period Lock: Closing a period in the system so no further entries can be posted to it.