At the end of every financial year, you might need to allocate income to the beneficiaries of a company, partnership or unit trust. MYOB can be set up for handling this type of income distribution.
Detailed below are the steps involved with setting up income allocation by modifying your category list then determining how you want to distribute the income.
This can be a complex area and the scenario below might not suit your needs. You should always seek financial advice regarding the best solution for your circumstances.
Create equity categories for each person
For each person you’re allocating income to, ensure you have all the necessary categories in the Equity section of your category list. Here’s an example of categories set up for a partnership:
3-0000 Equity
3-1000 John Smith
3-1010 JS - Retained Earnings
3-1015 JS - Capital Contributions
3-1020 JS - Current Earnings
3-1025 JS - Drawings
3-2000 Rachael Smith
3-2010 RS - Retained Earnings
3-2015 RS - Capital Contributions
3-2020 RS - Current Earnings
3-2025 RS - Drawings
FAQs
How is the profit or loss distributed to each person?
The Current Earnings categories in the Categories (Chart of accounts) page and your reports will always show each person’s share of the current year’s profits or losses. At the start of the financial year, those amounts will be transferred to each person’s Retained Earnings category.
What if I change the percentages, or add and remove people throughout the year?
No problem. The amounts allocated to the Current Earnings categories will recalculate automatically.