07 - Dividends

This module will discuss adding Creditors, POD, and paying simple dividends to creditors.

After this module, you will be able to:

• Enter Proof of Debt (“PODs”)
• Adjudicate on PODs
• Declare a dividend.
• Pay a dividend.
• Understand how dividend entries are created in the accounting system.
• Produce Cheques/EFTs and notices for dividends.
• Delete a Dividend
• Review reports that show details about the dividend.

Entering Proof of Debt

Before a dividend can be distributed to a creditor, the creditor must have lodged a POD detailing their claim and have their POD approved by the appointee.

1. In the Job window, click Financials -> Creditors -> Then the Creditor Class you need:

   2. Double-click on the creditor you want to add a POD for and enter the details, then click Save.                  Also, You could admit the POD manually before you click the Save and Exit button

Adjudicating on PODs

There are several ways of adjudicating on Proofs in the system:

• Manually 
• All creditors within the same class automatically
• Selected creditors within the same class automatically
• Automatically before importing

Manually

- Double-click into the Creditor you are adjudicating and fill out their admitted column. Then hit save and exit. (See Screenshot above)

 

Adjudicating automatically 

There are two ways to admit PODs automatically

1- Select any creditor and right-hand click, then select Auto-Admit Claim

2- Select the Admit all option 

  

Note: If existing claims have already been partly adjudicated, you will receive the following notification when you choose to Admit All claims. Click OK to continue.

Also, You could set to admit claims at claimed value or with variance.

Declaring Dividends

At the time a dividend is declared all assets will likely be realised and the only remaining assets will be in cash or investments.

• To declare a dividend, Click  Financials> Distributions > Declare Dividend Then enter the dividend details:

•  From the above screen, you can produce a notice of dividend by clicking the print notice button, which will kick off the document production wizard. Once you have finished, click OK and review the distribution details.

Paying Dividends

Before paying a dividend, creditor claims must be adjudicated and admitted. The normal process of paying dividends involves declaring a dividend, producing a notice of dividend, and distributing the dividend.

Paying Dividends

The system will create the accounting entries required to record the dividend.

1. To pay a dividend, right-click on the dividend that was just declared and select Pay Distribution. You will then be redirected to the Creditor Register screen.
2. At the top of the Creditor Register, enter the amount of the dividend. The Available Cash / Investments amount is the total of the cash accounts. Then click on the dividend button and click OK
3. The Dividend Selection appears, select the Dividend to pay then click OK
4.  A creditor Distribution form appears. Click authorise and enter the date of payment.
5. The dividend transactions are now created and have been posted to the account selected.
6. The Creditor Distribution register now opens, and users can view/print related documents e.g. distribution reports, Notice of Dividend 

Note:

• A dividend can only be paid if all creditor claims have been dealt with (Rejected or Admitted) By clicking Pick Creditors, you can select certain creditors to participate in the dividend if the dividend is not to be paid to all creditors.
• A dividend can only be authorised by a user who has the appropriate authority. Otherwise, to finalise the dividend, a user who has no authority is required to click the Propose button to then be authorised by a user with permission to do so.

Deleting a dividend

1. To cancel a dividend,  click on the Distribution tab, right-click the dividend you want to cancel, and select Cancel Distribution Payments. 
2. Once canceled, users can right-click the dividend entry and click Delete Dividend to delete the distribution from the system.

Canceling a distribution payment for one creditor without canceling the whole dividend

You can delete individual dividend payments (either from the cash book or dividend participants tab) and that will remove them from the dividend.

When you delete a dividend payment, the total paid and admitted amount for the dividend are updated.

If you process another dividend with the same description and the same date as the first distribution, both dividends are grouped into one on ASIC Form 5602, Section 2.

Delete dividend from Cashbook

1. Go to Cashbook> Click on the dividend transaction you want to cancel, 
2. Right-click on the transaction, and select "Cancel Dividend Payment", the payment will be deleted

Delete dividend from the Distribution Tab:

1. Click Financials > Distribution 
2. Double-click on the distribution you want to delete to open the creditor distribution screen
3. in the pop-up screen click on Participants and Advice Printing tab
4. highlight the creditor you want to cancel from the dividend 
5. Right- Click and select "Cancel Dividend Payment"