Paying dividends

A dividend is a payment made by a company to its shareholders and are paid out of company profits.

Important note on dividends

Before processing any dividends it’s important that your records are up to date. If your records are not complete, the profit available figures may be overstated.

Documenting a dividend

Directors are required to hold a meeting and produce minutes documenting the decision to pay a dividend.

In order for a dividend to be classed as legal, dividend vouchers must also be produced and retained.

Both minutes and vouchers will be created by the software for you.

Creating a dividend

To create a dividend:

  • Select 'Bookkeeping' in the menu

  • Click 'Dividends'

  • And press the 'Issue dividend' button

You'll then need to fill in the following details:

  • Share class - choose the class of shares you'd like to issue The dividend will be split between holders of this share class, according to the number they hold

  • Dividend date - enter the date the dividends will be issued

  • Amount to pay - the total amount you'd like to pay. You can only issue upto the profit available in your company, if you exceed this, a warning will be displayed

  • Pay off your director's loan account - you can choose to use this dividend to pay off your director's loan account balance, instead of receiving the money

  • Meeting to agree dividend - confirm that a board meeting has taken place to agree the issuing of this dividend

Then save

Paying dividends

You can now make the payment to the shareholders.

You will find a pending payment in the Bookkeeping area for each shareholder’s payment. When the outgoing transaction is shown in your importer, you can match this in.

Was this helpful?

Explore our help & advice

Expert GuidesExpand your knowledge with our expert tax guides
Property Tax ShowNadeem & James explore tax topics in this must-watch show
TikTok Tax TipsKeep Provestor in your pocket with our bite-sized tax tips

Help & advice by topic

Get started with ProvestorEverything you need to get set up in our accounting app
Buying & selling propertiesAdd and remove properties in Provestor
Managing tenancies & rentAdd tenancies and record rent in Provestor
BookkeepingKeep on top of your numbers with bookkeeping
Claiming expensesAllowable expenses, improvements and repairs
Money & financesManage dividends, loans payroll and pensions
Understanding property taxesFor personally held and limited company portfolios
Running a limited companyResources and guidance for company directors