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 dividend
- Click on the Forecast tab and then click Dividends:
- Click the Add Dividend button:
- Enter a name or description for the dividend:
- 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 One-time amount, indicate the amount of the dividend and select the month/year that it will be issued:
If you chose Constant amount, indicate the amount of the dividend and whether you will issue it monthly or yearly:
Then, indicate when you will issue the first dividend 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:
Click Save & Close.
Editing a dividend
To edit a dividend, click on it in the Dividends table:
In the edit overlay that appears, make any desired changes, and click Save & Close. For more details, see How do I edit or delete forecast entries?
Deleting a dividend
To delete a dividend, click on it in the Dividends table:
Then, locate the trash can icon in the lower left corner of the overlay. Hover over it, and click Delete:
Click Confirm to permanently delete the distribution:
Where does this entry appear in the financial statements?
Dividends will not appear in the Profit and Loss table.
In the Balance Sheet, 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 Cash Flow table, you'll see a reduction in net cash, as shown below. This reduction is calculated only into the month when the dividend was paid: