SACCO Interest and Dividends
Two things are shared out to members: interest on their savings, through the year, and a dividend on their shares, once a year. Both are decisions for an administrator: only an administrator sees the Interest card or can declare a dividend.
Paying interest on savings
Interest is worked out from each account's balance every day, at the rate of its savings product (including any dated rate change), using the Day count chosen in Settings. It is added to the account for each period — Monthly, Quarterly or Annually, as the savings product says. The Interest posting day in Settings (1 to 28) is the day of the month interest is added to accounts.
Nothing is paid until you choose a start date. In SACCO → Settings set Interest starts on, the first day interest is worked out from. Set it once, before the first run: changing it later does not undo interest already paid.
To pay interest, open SACCO → Interest:
- Preview. Choose to see what would be paid. Nothing is saved. You see each account's interest and the tax withheld, and a warning if the run would catch up several missed periods.
- Confirm and post. The run posts in steps and shows its progress. Accounts that are blocked or that failed are listed with the reason so you can deal with them and run again.
Running it twice, or again the next day, never pays anything twice: every period of every account is posted once.
Things to know:
- Withholding tax. If the product has a withholding tax %, that share of the interest is taken off what the member receives. It is recorded as money owed to the tax authority; paying it over is a normal journal in your accounts, not a SACCO screen.
- Posted interest is final. There is no reversal. If an amount was wrong, correct the member's account with a normal entry.
- Closing an account forfeits the interest of its unfinished period.
- Dormant accounts still earn interest.
- In the books, interest is an expense (Interest paid to members) and shows on the Profitability report.
The Interest paid report shows, for any period, the interest credited to each member, the tax withheld and what they received.
Dormant accounts
On the Interest page, check for dormant accounts looks at every account and marks as Dormant those with no activity started by the member for as long as Dormant after (months) in Settings (the product can set its own). You confirm before anything is marked. Dormant is information only: it does not stop deposits, withdrawals or interest, and it is set (and cleared) only by this check, never by hand. The Dormant accounts report lists them and the money in them.
The yearly dividend
SACCO → Dividends lists each year's declaration and its stage: Draft (unfinished, or ready to approve), Approved (not yet paid), Being paid, Paid or Cancelled. A dividend is declared for a financial year (the year ends in the month set in Settings) and has two parts:
- a dividend on shares — a percentage of the average value of each member's shares over the year. The average is time-weighted, so a member who bought shares in July gets a share of the year, not a full year's;
- an optional rebate on loan interest — a percentage of the interest each member paid on their loans during the year.
Declaring
Choose Declare and enter:
- the financial year;
- the surplus you are setting aside — you type it. The page can also compare it with the net income on the Profitability report, which is kept with the declaration as a reference;
- the dividend rate and, if you give one, the rebate rate. The page shows the highest dividend rate your surplus can pay.
The page then shows a per-member preview: each member's average share value, interest paid, dividend, rebate and total. The parts always add up exactly to the pool. A member who is not active, or who has no open savings account to pay into, is held back — listed with the reason and not paid. Holding someone back never changes anyone else's amount. The preview waits until every member and account is loaded, so you are never shown a partial dividend.
Approving and paying
- Approve, recording the AGM at which it was passed. After this the amounts can no longer be redrafted — only paid or cancelled.
- Pay, choosing the payment date. The page shows live progress. Each member's dividend is credited to their savings account; if the run is interrupted, Carry on paying continues from where it stopped and nobody is paid twice.
- Cancel a declaration, with a reason, any time before payment starts. A cancelled or draft year can be declared again.
The run page can be exported as CSV, Excel or PDF. In the books a dividend is an appropriation of equity, not an expense: it increases what members hold in savings and is paid out of the surplus you set aside. It does not move cash and does not appear as a cost on the Profitability report.
A wrongly paid dividend is corrected with a reversal on the member's savings account.