Hello
in my previous accounting software, I would create dividend vouchers and it will go straight into liabilities until paid out… so if there is not enough money to pay out in that FY, it can still be paid out as it has been already declared… how would you show company dividends to shareholders in arrears… because with quick file, you cant create dividends vouchers unless there are payments to create tags from…
Hello @Dean85
In my previous accounting software, I would create dividend vouchers and it will go straight into liabilities until paid out
Just to understand this correctly the money went into liabilities, where did it come from?
In double entry bookkeeping there is always a debit and a credit?
On clear books, you would click dividends journal, and create dividends…. When this happens, it will
Show as a liability on the balance sheet until it’s paid out … This way even after 3 years, the declared dividends can be brought forward and paid later…
Sent out of office
Hello @Dean85
you would click dividends journal, and create dividends….
A journal has 2 sides, one side would be the liability account what was the other side?
The reason for asking as we could recreate this in QuickFile.
Hi
Yes I understand what you’re saying now…
But they credit it when you create dividends… see screenshot below… it’s a running total …
Hello @Dean85
You would have to do this with 2 journals (depending on your nominals you may need to create extra codes)
I found this post in the forum along similar lines to what you are asking.
An unpaid dividend, also known as a Dividend Payable, refers to the dividend that a company has announced but has not been paid to stockholders.
Unpaid dividends have certain implications on a company, so also are unclaimed dividends. Both unpaid and unclaimed dividends are recorded as current liabilities on a company’s balance sheet. The current liabilities account is cleared when the unpaid and unclaimed dividends are paid.
yes nice… thanks…
or if the directors are the only shareholders, just put it in the DLA …
Any dividends declared must be paid within 9 months of the financial year-end - they can’t be carried forward unpaid for years.
A credit to the directors’ loan accounts (if the shareholders and directors are the same people) is in effect paying the dividend. If the shareholders are not directors, then you need to create the liability and then pay the dividend from the bank account within 9 months.
Hello,
I’m a bit confused why I received this. Was it meant for someone else?
Thanks
Dan
You got a notification as your thread (Dividend declared but unpaid at end of year) was mentioned in this thread
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