{"id":2589,"date":"2024-04-05T15:14:01","date_gmt":"2024-04-05T12:14:01","guid":{"rendered":"https:\/\/akaunting.com\/hc\/docs\/double-entry-accounting\/dividend\/"},"modified":"2024-04-05T15:33:15","modified_gmt":"2024-04-05T12:33:15","slug":"dividend","status":"publish","type":"docs","link":"https:\/\/akaunting.com\/hc\/docs\/double-entry-accounting\/dividend\/","title":{"rendered":"Dividend"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\"><strong>What is Dividend on Akaunting?<\/strong><\/h2>\n\n\n\n<p>Dividend is the primary way for company owners to withdraw profits from their business or pay themselves. This is different from taking a regular salary.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Tax Efficiency:<\/strong> Dividends are usually more tax-efficient than salary as they are subject to dividend tax rates rather than income tax and National Insurance contributions.<\/li>\n\n\n\n<li><strong>Flexibility:<\/strong> You have more control over when and how much you take as dividends, as there are no set pay periods like with a salary. This can be useful for managing your personal finances and tax liabilities.<\/li>\n\n\n\n<li><strong>Retained Earnings Requirement:<\/strong> Sufficient retained earnings (profits left in the business after previous dividends and taxes) are necessary before paying dividends to avoid potential legal issues.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Adding Dividend on Akaunting:<\/h2>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"704\" src=\"https:\/\/assets.akaunting.com\/hc\/2024\/04\/05151907\/Screenshot-2024-04-05-at-13.15.31-1024x704.png\" alt=\"Adding Dividend on Akaunting\" class=\"wp-image-2592\" style=\"width:759px;height:auto\" srcset=\"https:\/\/assets.akaunting.com\/hc\/2024\/04\/05151907\/Screenshot-2024-04-05-at-13.15.31-1024x704.png 1024w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05151907\/Screenshot-2024-04-05-at-13.15.31-300x206.png 300w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05151907\/Screenshot-2024-04-05-at-13.15.31-768x528.png 768w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05151907\/Screenshot-2024-04-05-at-13.15.31-1536x1055.png 1536w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05151907\/Screenshot-2024-04-05-at-13.15.31.png 1668w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Click <strong>Double Entry<\/strong> from the Dashboard<\/li>\n\n\n\n<li>Then select <strong>Chart of Accounts<\/strong><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"380\" src=\"https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152108\/Screenshot-2024-04-05-at-13.20.31-1024x380.png\" alt=\"\" class=\"wp-image-2593\" srcset=\"https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152108\/Screenshot-2024-04-05-at-13.20.31-1024x380.png 1024w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152108\/Screenshot-2024-04-05-at-13.20.31-300x111.png 300w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152108\/Screenshot-2024-04-05-at-13.20.31-768x285.png 768w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152108\/Screenshot-2024-04-05-at-13.20.31-1536x570.png 1536w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152108\/Screenshot-2024-04-05-at-13.20.31.png 2042w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>On the Chart of Accounts page, Click <strong>New Chart of Account<\/strong><\/li>\n\n\n\n<li>Enter Name: Dividends.<\/li>\n\n\n\n<li>Enter the Code: 3201<\/li>\n\n\n\n<li>Select type: <strong>Equity<\/strong><\/li>\n\n\n\n<li>Select Parent Account: <strong>Retained Earnings<\/strong><\/li>\n\n\n\n<li>Write a description. E.g., Dividend payment<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"777\" src=\"https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152241\/Screenshot-2024-04-05-at-13.21.28-1024x777.png\" alt=\"Add new chart of accounts\" class=\"wp-image-2594\" style=\"width:710px;height:auto\" srcset=\"https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152241\/Screenshot-2024-04-05-at-13.21.28-1024x777.png 1024w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152241\/Screenshot-2024-04-05-at-13.21.28-300x228.png 300w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152241\/Screenshot-2024-04-05-at-13.21.28-768x583.png 768w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152241\/Screenshot-2024-04-05-at-13.21.28-1536x1166.png 1536w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152241\/Screenshot-2024-04-05-at-13.21.28.png 1552w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Then, Click <strong>Save.<\/strong><\/li>\n<\/ul>\n\n\n\n<p>The Chart of Accounts page adds Dividend as a Retained Earnings sub-account.<\/p>\n\n\n\n<p><em>Note: You need to upgrade to the <a href=\"https:\/\/akaunting.com\/plans\">Premium or higher plan<\/a> to access the Double Entry feature.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Paying Dividend<\/h2>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"685\" src=\"https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152429\/Screenshot-2024-04-05-at-13.23.49-1024x685.png\" alt=\"Paying dividend\" class=\"wp-image-2595\" style=\"width:755px;height:auto\" srcset=\"https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152429\/Screenshot-2024-04-05-at-13.23.49-1024x685.png 1024w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152429\/Screenshot-2024-04-05-at-13.23.49-300x201.png 300w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152429\/Screenshot-2024-04-05-at-13.23.49-768x514.png 768w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152429\/Screenshot-2024-04-05-at-13.23.49-1536x1028.png 1536w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152429\/Screenshot-2024-04-05-at-13.23.49.png 1674w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Click <strong>Banking <\/strong>on the Side panel Menu<\/li>\n\n\n\n<li>Select <strong>Transactions<\/strong><\/li>\n\n\n\n<li>Click <strong>New Expense<\/strong><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"284\" src=\"https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152602\/Screenshot-2024-04-05-at-13.25.36-1024x284.png\" alt=\"New Expense\" class=\"wp-image-2596\" style=\"width:779px;height:auto\" srcset=\"https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152602\/Screenshot-2024-04-05-at-13.25.36-1024x284.png 1024w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152602\/Screenshot-2024-04-05-at-13.25.36-300x83.png 300w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152602\/Screenshot-2024-04-05-at-13.25.36-768x213.png 768w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152602\/Screenshot-2024-04-05-at-13.25.36-1536x426.png 1536w, https:\/\/assets.akaunting.com\/hc\/2024\/04\/05152602\/Screenshot-2024-04-05-at-13.25.36.png 1942w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Enter the <strong>Date<\/strong>, Select <strong>Cash Method,<\/strong> and <strong>Account<\/strong>.<\/li>\n\n\n\n<li>Enter the <strong>Amount<\/strong> intended for the Dividend.<\/li>\n\n\n\n<li>Write a <strong>Description<\/strong><\/li>\n\n\n\n<li>Select <strong>Dividend<\/strong> in the <strong>Chart of Account<\/strong> dropdown menu<\/li>\n\n\n\n<li>Add a New Category: <strong>Dividend<\/strong><\/li>\n\n\n\n<li>Select associating<strong> Vendor<\/strong>, <strong>Project,<\/strong> or <strong>Tax<\/strong>.<\/li>\n\n\n\n<li>Then, <strong>Save<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p>A Dividend Transaction is created.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">See the Dividend payout on the Balance Sheet<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Click <strong>Reports<\/strong> on the Side Panel Menu<\/li>\n\n\n\n<li>Click <strong>Balance Sheet<\/strong><\/li>\n\n\n\n<li>Then, Scroll to the <strong>Equity<\/strong> Section to see the Dividend Payment record.<\/li>\n\n\n\n<li>Click on Dividend to see all Dividend payment records.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>What is Dividend on Akaunting? Dividend is the primary way for company owners to withdraw profits from their business or pay themselves. This is different from taking a regular salary. Adding Dividend on Akaunting: The Chart of Accounts page adds Dividend as a Retained Earnings sub-account. Note: You need to upgrade to the Premium or [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":1345,"menu_order":11,"comment_status":"open","ping_status":"closed","template":"","doc_tag":[],"class_list":["post-2589","docs","type-docs","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/akaunting.com\/hc\/wp-json\/wp\/v2\/docs\/2589","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/akaunting.com\/hc\/wp-json\/wp\/v2\/docs"}],"about":[{"href":"https:\/\/akaunting.com\/hc\/wp-json\/wp\/v2\/types\/docs"}],"author":[{"embeddable":true,"href":"https:\/\/akaunting.com\/hc\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/akaunting.com\/hc\/wp-json\/wp\/v2\/comments?post=2589"}],"version-history":[{"count":2,"href":"https:\/\/akaunting.com\/hc\/wp-json\/wp\/v2\/docs\/2589\/revisions"}],"predecessor-version":[{"id":2597,"href":"https:\/\/akaunting.com\/hc\/wp-json\/wp\/v2\/docs\/2589\/revisions\/2597"}],"up":[{"embeddable":true,"href":"https:\/\/akaunting.com\/hc\/wp-json\/wp\/v2\/docs\/1345"}],"wp:attachment":[{"href":"https:\/\/akaunting.com\/hc\/wp-json\/wp\/v2\/media?parent=2589"}],"wp:term":[{"taxonomy":"doc_tag","embeddable":true,"href":"https:\/\/akaunting.com\/hc\/wp-json\/wp\/v2\/doc_tag?post=2589"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}