Our comprehensive guide walks you through the entire process of managing dividends. You'll learn how to set up your shareholders and company share structure, easily create dividends, and access all the necessary documents. The guide also explains how to record the dividend payments and how to manage your company's shares by issuing, buying back, or transferring them. 


How to Create Dividends ?

How to Make a Dividend Payment ?

How to Manage Company Shares ?


How to Create Dividends ?

This section walks you through the steps to create a dividend using the company's tool, from setting up directors and shareholders to generating the final dividend.


Prepare the Foundation

The first few steps ensure your company's information is set up correctly before you can create a dividend.

  1. Add Directors: Go to Tools > Dividends and click the Add director button. Fill in their details and click Save. You need at least one director to use the tool. If you already have directors, skip this step.
  2. Define Share Structure: Next, navigate to the Share structure page under Tools > Dividends. Enter the details of your company's shares and click Update. This step is crucial for calculating how dividends will be distributed.
  3. Check Available Profit: For an indication of how much profit is available for dividends, click on the Calculator page. This helps you determine a suitable dividend amount.
  4. Add Shareholders: Go to the Shareholders page and click Add to enter shareholder details. Make sure you enter all the required information and save. You must have at least one shareholder with shares to create a dividend. You can also edit existing shareholder information using the Edit icon.


Create and Finalise the Dividend

Once the foundation is set, you can create and finalise the dividend.

  1. Create a New Dividend: On the Overview page, click Create dividend. Enter the total amount you want to pay out and click Create. The tool will automatically split the dividend among all shareholders based on their shareholdings.
  2. Confirm the Split: Review the proposed dividend split to ensure you're satisfied with how the funds are allocated. If everything looks correct, click Create Dividend to confirm.
  3. Access Dividend Documents: The Overview page will now show all created dividends. You can click on a specific dividend to view the details, including links to minutes of the dividend and dividend vouchers for each shareholder. These documents are available in both HTML and PDF formats. You can also view an annual certificate of dividends paid by looking at each shareholder's details on the Shareholders page.
  4. Review the Journal Entry: To see the accounting details, go to Tools > Journals > All journals. The dividend entry will credit each shareholder's dividend account and debit the main Dividends account. This shows how the liability to pay the dividend is recorded.

How to Make a Dividend Payment ?

After creating the dividend, you must make a payment. Here are two methods, depending on whether you import bank statements.


Method 1: Without Importing Bank Statements

  1. Go to Money > Bank accounts.
  2. Select the bank account you're paying from and click Money out.
  3. Create a transaction for the full dividend amount.
  4. Click Explain and fill in the payment details. Under the "Current Liabilities" category, select the correct shareholder dividend account (e.g., "Joe Blogs dividends"). These specific accounts are automatically created when you set up the dividend using the tool. You can find a full list of these accounts in Settings > Accounting > Account codes.

Method 2: With Imported Bank Statements

  1. Go to Money > Bank accounts.
  2. Find the dividend payment on your imported statement and click Explain.
  3. Fill in the payment details, making sure to use the correct shareholder dividend account as described in Method 1.

How to Manage Company Shares ?

This section explains how to issue, buy back, or transfer shares to your shareholders. Note: You must have already completed the “Prepare the Foundation” from the "How to Create Dividends" section.

  1. Go to Journals > Dividends, then click the Shareholders link.
  2. Select the name of the shareholder whose shares you want to adjust.
  3. You'll see three options:
    • Issue Shares: Click this to issue new shares. Fill in the form and click Issue.
    • Buy Back Shares: Use this option to buy back shares from a shareholder. Fill in the form and click Buy Back. You cannot buy back more shares than the shareholder owns.
    • Transfer Shares: Select this to transfer shares from one shareholder to another. Fill in the form and click Transfer. You cannot transfer more shares than the shareholder owns.