Franking account
Keep a company's franking account register for the year and see straight away if it ends in deficit.
A company's franking account tracks the tax it has paid, so it can pass that tax on to shareholders as franking credits on dividends. Tax paid adds credits. Franked dividends paid out use them up. It only shows for company clients.
How do I add an entry?
- Open the client and go to TaxFranking account.
- Pick the Financial year.
- Choose Add entry.
- Pick the Transaction, like Income tax paid or Franked dividend paid.
- For Opening balance or Other, pick the Direction. Every other type sets it for you.
- Enter the Date, Amount, a Description and, if you like, a Reference.
- Choose Add entry.
Which entries are credits and which are debits?
- Credits raise the balance: Income tax paid, PAYG instalment paid, Franking credits received and Franking deficit tax offset.
- Debits lower it: Franked dividend paid, Income tax refund and Over-franking debit.
Where does the opening balance come from?
Billbook works it out from every earlier year's entries, so you don't carry it forward by hand. Starting a company's register in Billbook? Add one Opening balance entry in the first year, and every later year picks it up.
How do I fix an entry?
Choose the pencil on the entry, fix it, then choose Save. The entry stays in its year. To remove one, choose the bin, then Delete.
How do I read the register?
The tiles show the Opening balance, total Credits and Debits, and the Closing balance. The closing balance is marked Surplus or Deficit.
A deficit at year end means the company owes franking deficit tax equal to the deficit. Billbook shows how much, and the offset it can claim against its next return. The offset is cut back when the part of the deficit from franked dividends is large compared with the year's credits, and the warning says when that's happened.
Only people with the tax permission can add, edit or delete entries. The section only shows for company clients.
Record PAYG instalments as they're paid, so the balance is right before you declare a franked dividend.
Next
Something wrong on this page? Tell us
Last updated on