A dividend is a payment made by a company to its shareholders and are paid out of company profits.
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.
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.
To create a dividend:
Select 'Bookkeeping' in the menu
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
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.