Use MyBookkeepingManager to Calculate Dividend Payments to Shareholders

The MyBookkeepingManager bookkeeping software calculates the size of dividends that can be paid to shareholders.

Dividend payments can only be made from a company's profit (after corporation tax has been paid). So, if a company makes a loss of £10,000 for the current year, a dividend payment cannot be made unless there are retained earnings (profit from previous years) sitting in the company bank account.

In accounting, retained earnings refers to the portion of net income of a corporation that is retained by the corporation rather than distributed to shareholders as dividends, or as the amount available to the corporation for distribution to shareholders. Similarly, if the corporation incurs a loss, then that loss reduces the corporation's retained earnings balance. If the balance of the retained earnings account is negative it may be called retained losses, accumulated losses or accumulated deficit, or similar terminology. Retained earnings and losses are cumulative from year to year.

On the other hand, if a company makes a net profit of £10,000 (ie after salaries, expenses, corporation tax, etc have been paid), some or all of this profit can be distributed as a dividend payment to the company's shareholders.

MyBookkeepingManager also lets you generate dividend tax vouchers, enabling you to keep track of dividend payments made to shareholders.

You can find out more about dividends on our main dividend page, which also features a nice little dividend calculator.

Go back to the main Features page