What is post accounting?

Posting in accounting is when the balances in subledgers and the general journal are shifted
into the general ledger. Posting only transfers the total balance in a subledger into the general
ledger, not the individual transactions in the subledger. An accounting manager may elect to
engage in posting relatively infrequently, such as once a month, or perhaps as frequently as
once a day.

Subledgers are only used when there is a large volume of transaction activity in a certain
accounting area, such as inventory, accounts payable, or sales. Thus, posting only applies to
these larger-volume situations. For low-volume transaction situations, entries are made directly
into the general ledger, so there are no subledgers and therefore no need for posting.

For example, ABC International issues 20 invoices to its customers over a one-week period, for
which the totals in the sales subledger are for sales of $300,000. ABC's controller creates a
posting entry to move the total of these sales into the general ledger with a $300,000 debit to
the accounts receivable account and a $300,000 credit to the revenue account.

Posting is also used when a parent company maintains separate sets of books for each of its
subsidiary companies. In this case, the accounting records for each subsidiary are essentially
the same as subledgers, so the account totals from the subsidiaries are posted into those of the
parent company. This may also be handled on a separate spreadsheet through a manual
consolidation process.

Posting has been eliminated in some accounting systems, where subledgers are not used.
Instead, all information is directly stored in the accounts listed in the general ledger.

When posting is employed, someone researching information in the general ledger must "drill
down" from the account totals posted into the relevant general ledger accounts, and search in
the detailed records listed in the relevant subledgers. This can entail a significant amount of
additional research work.

From the perspective of closing the books, posting is one of the key procedural steps required
before financial statements can be created. In this process, all adjusting entries to the various
subledgers and general journal must be made, after which their contents are posted to the
general ledger. It is customary at this point to set a lock-out flag in the accounting software, so
that no additional changes to the subledgers and journals can be made for the accounting
period being closed. Access to the subledgers and journals is then opened for the next
accounting period.

If posting accidentally does not occur as part of the closing process, the totals in the general
ledger will not be accurate, nor will the financial statements that are compiled from the general
ledger.