How to Post Journals: Complete Guide

Posting journals is a fundamental process in the accounting cycle. It involves transferring information from the journal—where transactions are first recorded—to the general ledger, which provides the master record of all financial activity. For modern finance teams, understanding how to post journals accurately is essential for maintaining a "gold source of truth" and ensuring reliable financial reporting.

What is a Journal Entry?

A journal entry is the first step in the accounting process. It is a record of a business transaction that includes the date, the accounts affected, and the amounts to be debited or credited. Every transaction must have at least one debit and one credit, and the total debits must always equal the total credits—this is known as double-entry bookkeeping.

The Debit and Credit System

To post journals correctly, you must understand the rules of debits and credits:

• Assets: Increases are debited, decreases are credited.
• Liabilities: Decreases are debited, increases are credited.
• Equity: Decreases are debited, increases are credited.
• Revenue: Decreases are debited, increases are credited.
• Expenses: Increases are debited, decreases are credited.

The Posting Process: Step-by-Step

Step 1: Identify and Analyze Transactions

Start by gathering source documents like invoices, receipts, or bank statements. Analyze each transaction to determine which accounts in the chart of accounts are affected.

Step 2: Record the Journal Entry

Enter the transaction into the general journal. Include the date, the account names, and the debit and credit amounts. Provide a brief description of the transaction for future reference.

Step 3: Post to the General Ledger

Transfer (post) the entries from the journal to the corresponding accounts in the general ledger. This updates the balance of each account, allowing for real-time visibility into the company's financial position.

Step 4: Prepare a Trial Balance

Periodically, typically at the end of a month or quarter, prepare a trial balance to ensure that total debits equal total credits across all ledger accounts.

Example: Posting a Service Sale

Scenario: Your company provides a consulting service to a client for $1,000 and sends an invoice.

Journal Entry:
• Debit: Accounts Receivable ($1,000)
• Credit: Service Revenue ($1,000)

Posting: You would then increase the balance of the Accounts Receivable account in the ledger by $1,000 and increase the Service Revenue account by $1,000.

Modern Ledger Management with NAYA

While traditional accounting involved manual posting, modern operational ledgers like NAYA automate this process. Transactions from various sources are automatically normalized, categorized, and posted to the ledger in real-time, reducing errors and providing finance teams with immediate, actionable data.