Dividends posted to P&L

Guidance:

Clients often post dividends to the P&L to ensure that they have enough profits to cover the dividends that they wish to take, even though this is not technically correct under UK accounting standards.  Therefore when this syncs into Silverfin this can cause your accounts to imbalance or your brought forward figures to not clear out.

Ideally you (or the partner) should discuss with the client and agree that the code should be amended to a Balance Sheet equity code, but some clients may not accept this change to their status quo.

Explanation:

If the dividend code is set up as a P&L code in the source bookkeeping software then you should map it to a suspense P&L code in Silverfin, and then create an adjustment each year to reallocate the value to dividends in the equity section of the Balance Sheet.

Example:

Your client has paid £50k of dividends this year and it is sitting as a P&L cost.
You should map this in Silverfin to suspense, then create an adjustment as follows: debit dividends (Balance Sheet) £50k, credit suspense (P&L) £50k.
This clears out the P&L dividend suspense balance to nil and shows the dividend value in the equity section of the Balance Sheet (the correct place).