Entering Dividends and Distributions

Dividends (for corporations) or distributions (for LLCs or partnerships) are a way to pass profits along to the company's owners or shareholders. Companies can issue dividends at any time but typically do so at the end of the fiscal year. That timing makes sense, given that dividends are based on after-tax profits. 

Adding a Dividends

1

In your financial forecasting tool, Navigate to the  Dividends tab Under the Working Capital tab:

2

On the Dividends tab, Click on the Add Dividend Group option. 

3

After entering the Dividend Group, Click on  Add Dividend to proceed further. 

In the overlay that appears, Enter a name or description for the dividend In the overlay that appears:

4

Choose the "Direct Amount" for Dividends: This allows you to specify an exact amount to be distributed as dividends. This option provides straightforward control over the total dividend payout.

Choose "% of Net Income" for Dividends: When you use the '% of Net Income' method, dividends will be set based on the company’s Net Profit. This method provides a fair distribution strategy that adjusts dividends in line with earnings.

5

Next, indicate whether this is a one-time distribution, or happens regularly and is the same amount, or varying amounts over time:

• If you chose a One-time amount, indicate the amount of the dividend and select the month/year that it will be issued:
  
• If you chose a Constant amount, indicate the amount of the dividend and whether you will issue it Monthly or Quarter or Yearly: 
  Then, indicate when you will issue the first and subsequent dividends in the series:

• If you chose Varying amounts over time, enter the amounts you want to distribute in the months you'd like to distribute them:
  

6

Click on Save and Close.

Editing or Deleting Dividends

1

To delete a dividend, click on Delete Dividend button on the dividend item:

TIP: Moving finance items from one group to another is hassle-free with Upmetrics. For a detailed walkthrough, check out our help guide here.

2

To edit a dividend, click on the dividend item.

Where does this entry appear in the financial statements?

In general, Dividends will not appear in the Profit and Loss statement as a separate row. a dividend payment is subtracted from Earnings to calculate your Retained Earnings. Notice that this value carries forward from the month when it was paid. This doesn't mean the same dividend is being subtracted each month; it means that the deduction is being carried forward in calculating your monthly and annual earnings: 

In the Balance Sheet, It is a part of Retained Earnings:

In the Cash Flow table, you'll see a reduction in net cash, as shown below under Dividends & Distributions. This reduction is calculated in the month when the dividend was paid: