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Dividend scenario 1

Difference between invoices raised and paid

Dividends are payable from your net profit, as your net profit is based on invoices issued rather than Client Payments received then there will be times when the Maximum Dividend available will be higher than your bank balance.

Crunch uses the "Accrual system" for accounting, and as there is usually a delay between you issuing an invoice and a client paying the invoice, this can mean that Crunch shows the Maximum Dividend available as higher than the bank balance.

Your net profit is calculated based on invoices issued less any allowable expenses and corporation tax due, and relies on your account being reconciled.

Worked example: You may have raised an invoice for £1,000 on the Crunch system but not actually been paid for this invoice. The "Maximum Dividend available" will be higher than your bank balance by £810, assuming no other expenses, until you receive payment for the invoice.

This is part of a troubleshooting series on 'Why does the maximum dividend available not match my bank balance?'

 

 

 

 

Last Updated: 13 Nov 2019 11:48AM GMT

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