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ThePlumber1984
Level 2

Paying Monthly Dividends - Chart of accounts

We take a monthly dividends, however my accountant has set this up as an expense account. So therefore the figures in Quickbooks are showing incorrectly every month, along with it deducting it from our Corp Tax. This is obviously incorrect.  

 

How do you set up dividends which are paid monthly in Quickbooks without setting up as an expense account? A step by step guide would be much appreciated, along with how you transfer them each month (From what account to where etc.)

 

 

Solved
Best answer June 12, 2019

Accepted Solutions
SindyS
Level 3

Paying Monthly Dividends - Chart of accounts

Hi EvilDrPorkChop

As an accountant, I would set up an account as follows:

Chart of Accounts > New

Account type > Equity

Detail type > Retained Earnings

Name > Dividends

I would then create a bank rule to transfer the payment from the bank account to the dividend account.

This will take the dividend payments out of your P&L and onto your balance sheet, thus reflecting the correct profit and CT.

I'd also be questioning your accountant about there reasoning for setting it up as an expense.

Thanks

Sindy

View solution in original post

15 REPLIES 15
SindyS
Level 3

Paying Monthly Dividends - Chart of accounts

Hi EvilDrPorkChop

As an accountant, I would set up an account as follows:

Chart of Accounts > New

Account type > Equity

Detail type > Retained Earnings

Name > Dividends

I would then create a bank rule to transfer the payment from the bank account to the dividend account.

This will take the dividend payments out of your P&L and onto your balance sheet, thus reflecting the correct profit and CT.

I'd also be questioning your accountant about there reasoning for setting it up as an expense.

Thanks

Sindy

View solution in original post

ThePlumber1984
Level 2

Paying Monthly Dividends - Chart of accounts

That's great. 

 

I've gone ahead and changed the Expense account that was created by the accountant to that you have suggested. The figures now seem correct in P & L. 

 

However the Dividend account now shows a minus figure due to what we've withdrawn. Is this correct or should it be a positive figure. 

SindyS
Level 3

Paying Monthly Dividends - Chart of accounts

Hi EvilDrPorkChop

As this is the money you have withdrawn, it will be  a minus, as you are taking your share of the profits available out of the company and reducing retained earning.

Hope that makes sense

Sindy

 

 

dsbooks
Level 2

Paying Monthly Dividends - Chart of accounts

Hi,

 

Desperately trying to find a way to correct record dividends in Quickbooks as well.

 

I've tried creating a new Equity account named 'Dividend', however, I'm getting the error message "There can be only one account of detail type Retained Earnings.".

As we stand, I am recording the dividend payment as Other Expenses, but this is interfering with the P/L.

 

I would be very grateful if you could help and expose the correct way to do it for the Quickbooks community, we all need it!

 

Many thanks for your contribution.

 

Kind regards

Jovychris_A
QuickBooks Team

Paying Monthly Dividends - Chart of accounts

I appreciate the details a lot, @dsbooks.

 

Retained Earning in QBO is a default account used when running the report. You can use another category to an Equity account or Other Current Liability account to reflect it right on the Balance Sheet. I'd suggest asking for an accountant's advice on what category is best to use.

 

In addition, you can edit/change the name of the retained earning Detail Type name to Dividend. Please make sure that there are no other accounts affected when you decide to change it.

 

Let me show you how:

  1. Go to Accounting on the left pane and then select Chart of Accounts.
  2. Search for "Retained Earnings" or search the account name with the Detail Type Retained Earnings.
  3. Click the drop-down▼ button on the Action column.
  4. Select Edit and then rename the account as "Dividend".
  5. Hit Save and Close.

I've added article as your reference in running Balance Sheet reports: What is a Balance Sheet report?.

 

Also, I recommend this article as your reference on how to print and email reports in QBO: Run reports.

 

Please let me know if you have anything else to add. I'll keep my notifications open. Stay safe and healthy!

ThePlumber1984
Level 2

Paying Monthly Dividends - Chart of accounts

Ours is set up as an Equity account, then Partnership Distributions. 

 

Hope that helps. 

 

 

 

Jane J
Level 1

Paying Monthly Dividends - Chart of accounts

Quickbooks is saying that ‘there can only be one account of detail type ‘Retained Earnings’ and as I already have a ‘Retained Earnings’ account I can’t add another called ‘Dividends’. For now, I’ve changed the name to ‘Retained Earnings and Dividends’.

Adam2484
Level 1

Paying Monthly Dividends - Chart of accounts

Hi 

 

I have now set my monthly dividends up in this way. The problem I'm having now is the total dividend showing on the bottom of the balance sheet is much less that the actual amount of dividends taken. 

Jen_D
Moderator

Paying Monthly Dividends - Chart of accounts

Thanks for posting here, Adam.

 

QuickBooks follows the Source and Targets concept to build company and financial reports. This means that, the data you see on every report is derived from the details of its source transaction.

 

To determine the discrepancy, click the amount for the dividends to get the transaction lists. The transactions will show what comprises the amount you see on the Balance Sheet. If the transactions amount shows the correct total but the balance sheet displays otherwise, try some basic troubleshooting.

 

Unexpected issues in QuickBooks are sometimes affected by the amount of data stored in the cache. This is because a regular browser will constantly overwrite itself and will not remove history unless done manually.

 

Private browsing will not save any history, so it's a great place to identify issues in the browser. Use these keyboard shortcuts to launch a new private window:

 

  • Google Chrome: press Ctrl Shift N  
  • Mozilla Firefox: press Ctrl Shift P
  • Safari: press Command Shift N

 

Once you open a private browser, log in to your QBO account and try to run the report from there. If it functions correctly, clear the cache to resolve browser issues in QBO. You can also use a different browser and see if the issue persists there.

 

To learn more about the reporting in QuickBooks Online, see the following link: Reports - QuickBooks Online UK

 

If you need further assistance with reporting in QuickBooks Online, let me know in the comment below. I'll be right here if you need anything else. Have a good one!

Adam2484
Level 1

Paying Monthly Dividends - Chart of accounts

I have tried all the above and it has made no difference. 

 

If I go Chart of Accounts > Dividends (as set up at the head of this topic) it lists all the dividends financial year to date totalling 33,891.45.

 

Balance sheet still shows -23,818.65. So I'm at a total loss. 

 

I previously had dividends set up incorrectly and they were all in Expenses > Dividends Payable until I saw this thread and changed them

SindyS
Level 3

Paying Monthly Dividends - Chart of accounts

Hi Adam

Without being able to see your QBO, difficult to know why its different, especially if the figures in the chart of account agree. Did you set up a new account for dividends and is the balance on the chart of accounts £33,891.5 or is that just the figure for the financial yr?

Sindy 

Adam2484
Level 1

Paying Monthly Dividends - Chart of accounts

That is the total in the chart of accounts for dividends for year to date. 

 

the balance sheet is also year to date so there is no discrepancy in dates. 

 

I did set up a new account as retained equity the way it explains to do it at the top of this topic. 

 

I'll have the phone up and screen share with someone at QB see if they can spot the mistake

SindyS
Level 3

Paying Monthly Dividends - Chart of accounts

Hi Adam

Just wondering if there is a balance brought forward in the account, though there shouldn't be if you have set it up.

Thanks

Sindy 

Adam2484
Level 1

Paying Monthly Dividends - Chart of accounts

No, no balance brought forward, I didn't take any dividends in year 1. 

 

I just had a play around with it again and if you change the balance sheet to cash accounting from accrual the dividend amount on the balance sheet increases from £-23,818.56 to £-37,962.84.

 

The chart of accounts remains the same at £33,891.45 so now I'm really confused.

SindyS
Level 3

Paying Monthly Dividends - Chart of accounts

Lol. That makes 2 of us!

I am intrigued to know why, though......

You will have to let me know what QBO say

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