The Distributions tab allows Reportance to be able to easily distribute the net profit or loss of the entity.
To make a distribution, select the relevant dataset and then click on the Other Info tab. This will take you to the Distributions area.
Enter the accounts and details of the distribution. As with all other journals, if your accounts don't exist, Reportance will create them for you. Please note if you do this you will need to allocate the accounts to the correct area of the chart of accounts after processing the journal. Distributions can be entered as fixed dollars and/or as percentages.
Some sample accounts are as follows:
|Dividend/Distribution Account ||Payable/Liability Accounts |
|Dividend Paid||Provision for Dividend|
|Distribution of Profit Beneficiary 1||Distribution Received Beneficiary 1 |
|Distribution of Profit Beneficiary 2 (etc)||Distribution Received Beneficiary 2 (etc) |
|Distribution of Profit/Loss Partner 1||Share of Profit/Loss Partner 1 |
|Distribution of Profit/Loss Partner 2 (etc)||Share of Profit/Loss Partner 2 (etc) |
|Partners Salary |
|Distribution of Profit ||Share of Profit/Loss |
Note: You should not distribute partnership losses as dollars, only percentages. The dollars option is designed to pay a partner's salary or where someone is always entitled to a fixed dollar amount.
When you have completed the details click the Post Automatic Journals button and you will get a notice to say it has been processed successfully. The journal will now appear in the Journals screen and can be edited or deleted like other journals.
Note: To show the profit/loss split in the Appropriation Statement you will need to create separate dividend/distribution accounts for each shareholder/beneficiary/partner (see above). You can then wrap up the headers in the Balance Sheet to consolidate them if required.
Should you need to make any adjustments to your file, or need to refresh the client's data, press the Post Automatic Journal button again and it will update the existing journal with the new figures.
Note: Clicking on the Process Automatic Journals button in the Journals tab will also post any distribution configurations saved (along with depreciation and primary production journals).
Rolling over balances in the next year
Reportance allows certain accounts to be tagged as 'Opening Balance' accounts so that any account balances sitting under the same header will be moved to those accounts designated as opening balance accounts in subsequent years. This is particularly useful for beneficiary/partner accounts.
Setting up the accounts
To ensure that the balances are rolled into the correct accounts in subsequent years, make sure that your accounts are set up correctly in the chart of accounts. The example below shows a typical set up for a beneficiary:
Note: All beneficiary accounts associated with Jane Bloggs sit under the header 'UPE - Jane Bloggs'. Each beneficiary would require the same set up.
The account 'Opening Balance - Jane Bloggs' also needs to be tagged as an opening balance account. To do this, edit the account by clicking on the pencil icon to the right of the account. Tick the Opening Balance Account checkbox. This tells Reportance to move the balances of the 'Drawings - Jane Bloggs' and 'Profit Distributions - Jane Bloggs' accounts to this account when creating next year's dataset.
'Rolling over' balances
For the prior year's closing balances to move to those accounts designated as opening balance accounts as described above, you will need to select that dataset as the opening balance when creating the new dataset (for more information on creating a dataset see the knowledge article: New Datasets and the Information Tab). To do this, tick the Roll over opening balances checkbox in the New Dataset setup. This will bring up a dropdown menu of the available datasets. Select the relevant one (generally the prior year).
An example is shown below of the resulting Balance Sheet after creating the new dataset:
Next article: Datasets - Other Info - Primary Production