How do I distribute trust profit

Use the correct accounts and processes to distribute profit to beneficiaries, partners or unitholders.

Chart of accounts

First, you need to have your chart of accounts set up correctly.

Our system does all appropriations in equity, not expense.

The purpose is to keep appropriation accounts out of your operating expenses, as well as controlling integrations with Xero tax or other reporting tools.

Make sure these accounts are set up:

The debit DR distribution account

• Must be Equity
• Must be mapped to EQU.UDE.3

The credit CR share or profit account

• Should be liability or equity
• Should be mapped to LIA.NCL.PFT (numbered) EQU.PFT (numbered)

Post a distribution journal

You need to do a manual journal to distribute profit.

Go to accounting / advanced / manual journals.

Example journal:

30 June 20XX

DR - Distribution of Profit - John Jones  - 50,000

CR - Share of Profit - John Jones - 50,000

Post a rollover journal

We need to clear the DR distribution account on the first of July.

This is known as the rollover journal.

Example journal:

1 July 20XX

DR - Retained Earnings - 50,000

CR - Distribution of Profit - John Jones  - 50,000