Entering dividends and distributions

Dividends (for corporations) or distributions (for LLCs or partnerships) are a way to pass profits 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

  1. Click on the Forecast tab and then click Dividends:
    Forecast section dividends highlighted.png

  2. Click the Add Dividend button:
    arrow pointing to add dividend.png

  3. Enter a name or description for the dividend:
    entering the dividend name.png

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

    dividend entry options new.png

    • If you chose a One-time amount, indicate the amount of the dividend and select the month/year that it will be issued:
      Forecast Dividend Editor One Time.png

    • If you chose Constant amount, indicate the amount of the dividend, whether you will issue it monthly or yearly, and when the dividend will start:
      Forecast Dividend Editor Constant Amount.png

    • If you chose Varying amounts over time, enter the amounts you want to distribute in the months you'd like to distribute them: 
      Forecast Dividend Editor Varying Amounts.png

    • If you choose Percent of net profit, enter the percentage of your net profit that you want to distribute and the month in which those distributions will start.
      Forecast Dividend Editor % Net Profit.png

  5. Click Save.

Editing a dividend

To edit a dividend, click on it in the Dividends table:

editing a dividend highlighted.png

Make any desired changes in the edit overlay that appears, and click Save. For more details, see How do I edit or delete forecast entries?

Deleting a dividend

To delete a dividend, move the cursor on the dividend entry that you wish to delete and click on the three dots that appear in the forecast item row:

three dot menu highlighted in dividends page.png

Select Delete from the menu: 

delete highlighted dividends page.png

Click Delete to delete the distribution permanently:

confirm delete forecast item.png

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 indicates that the deduction is being carried forward in calculating your monthly and annual earnings:

balance sheet earnings retained earnings highlighted.png

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

projected cash flow with dividends highlighted.png

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