Dividend Help Please

Blonde Accountant

Hi, I have just recently taken on a new client who uses Sage. I do not have much Sage experience-just enough to get by. The client pays himself dividends. Where can put them on Sage as there is no code and I am not sure whereabouts to set up a code. Also once my dividends are on, will the month end routine do anything with them?
Thank-you in hopeful advance of any help.

Anne Boleyn

Dividends

Hi
When you say he pays himself dividends, is any paperwork completed declaring them as dividends or just a case of eg taking £500 a month and saying this is a dividend. Do you know that there are enough profits for a dividend to be declared every month. Does he have another job where he is paid a salary or have another business?

As to where to put them in Sage, they can be put in Director's remuneration and in the details put Dividend or set up another code just for dividends.

Regards

deanshepherd

I tend to use code 8500 for dividends and keep them away from the Directors' remuneration account.

Here is a quick guide to setting up a new account on Sage.

Blonde Accountant

Anne Boleyn wrote: »

Hi
When you say he pays himself dividends, is any paperwork completed declaring them as dividends or just a case of eg taking £500 a month and saying this is a dividend. Do you know that there are enough profits for a dividend to be declared every month. Does he have another job where he is paid a salary or have another business?

As to where to put them in Sage, they can be put in Director's remuneration and in the details put Dividend or set up another code just for dividends.

Regards

Hi, It is just a case of taking £x per month and saying this is a dividend. He does also take salary from the same business Thank-you for the response.

DeanShepherd-Thank-you, I think I will set up a new code just for the dividend payments

Hasan.Ahmet

Remunerations and Dividends are distinctly different in that former is an expense in the p&l the latter is distribution from profits.
My own accounting entries would be;
When the dividends are voted
Dr Dividends in the P&L ( A code from 32__ not a code from expenses)
Cr Dividends in the BS (A code from creditors)
When payment made
Dr Dividends in the BS
Cr Bank.

lorraine

Hasan.Ahmet wrote: »

Remunerations and Dividends are distinctly different in that former is an expense in the p&l the latter is distribution from profits.
My own accounting entries would be;
When the dividends are voted
Dr Dividends in the P&L ( A code from 32__ not a code from expenses)
Cr Dividends in the BS (A code from creditors)
When payment made
Dr Dividends in the BS
Cr Bank.

I take it, if a director is to take £X amount each month then it would be the 2nd example, Dr dividends 2231 and Cr Bank 1200 on sage, is this correct?

But if it was decided from the profits then it would be the first option????is this correct...

When the final accounts are done, is there note put on the accounts to say the amount to be paid as dividend?

deanshepherd

I put my dividends in an expense code so that they reverse out to the P&L after the year end routine.

If you use a 32__ code your dividends balance will perpetually increase unless you do a correcting journal. Unless someone knows how to make a 32__ code reverse out to the P&L?


Lorraine, if you don't want to run a control account you can do the first DR and the last CR from Hasan's example.

Hasan.Ahmet

Yes Dean,
All that would then have to be done reverse dividends to p&l c/fwd.
The alternative would cause the p&l for the period be arrived at after deducting dividends as expense. Additional adj would then be needed to show p&l before dividends.

Creditor a/c in the bs would be the control a/c containing the record for dividends paid,
of'course you could,(Not my preference) not use the control account.

AK002

If it's just £x a month surely that would be drawings into the DLA and then a dividend monthly/yearly to clear o/drawn loan account?

deanshepherd

Why let the DLA go overdrawn unnecessarily?

AK002

True. Depends what's in it to start with though... can see where you're coming with tho.

Blonde Accountant

Thank-you every one for your help-it was really useful x