Posting to ledgers is the accounting activity where accountants record business transactions into a company’s financial books. In reality, there are not many different ways to post accounting transactions. All methods essentially do the same thing, though the written format can be a bit different. The use of electronic accounting software often has different methods of posting to ledgers, though the biggest difference lies in how an accountant does it and not in the end result. Accurate accounting transactions are one of the major backbones of an accounting information system.
The classic method of posting to ledgers is to create a handwritten journal entry. In all journal entries, debits come first — at the top of the entry — with credits coming second. The journal entry needs a date, account number, and name for both the debit and credit lines and a dollar figure for each debit and credit. A brief description goes underneath the last credit line on the entry. Once written on its own, an accountant updates each account for the dollar amounts in the entry, handwriting the entry into the accounting books in a manual accounting system.
Manual accounting systems are often tedious to update when posting to ledgers. Traditionally, a company would have many different paper ledgers and journals in the system. Accountants would have to find the necessary books and then write the entry into each one in a clear and accurate manner. Today, a manual accounting system can refer to a series of spreadsheets that have no single data entry point, like accounting software. Spreadsheets can also be difficult to maintain manually.
Using accounting software to maintain a company’s books may seem easier to maintain when posting to ledgers. A journal entry screen is available for most systems and requires the same basic information as a manual journal entry, the date, account number, and name for both the debit and credit lines and a dollar figure for each debit and credit. A major issue, however, comes from inaccurate data entered into the accounting system. No physical ledgers or journals exist, so errors must be tracked electronically and corrected using the system. There is no simple erase and rewrite procedure in many cases, which can make major corrections difficult to complete.
Most accounting systems work on a perpetual method. Each accounting transaction goes into the journals and ledgers as they occur. Posting to the ledgers, therefore, is one of the most common accounting tasks. Large organizations can have hundreds — even thousands — of monthly transactions. Internal controls must be in place to ensure accurate and relevant transactions get recorded in a timely manner.