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Drawings and Dividends

Drawings and Dividends

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Drawings and Dividends

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Drawings are normally only entered on a sole trade or partnership. Drawings are the monies taken out of the business. If you are paying for non-business expenses on a business account you would normally set the nominal on the transaction to ‘Drawings’

Dividends are normally only entered on a company.  Dividends are normally paid to shareholders for performance related reasons. Dividends taken will not reduce the net profit on the P&L. Dividends would have the transaction nominal set to ‘Dividends’ under Other Purchases (Non P&L). When paying you can either pay directly from a balance account such as the Bank, or by the Directors loan account so you can draw from the loan account as required.