Hi James
As you've identified, one of the main reasons for developing the improved tool, was to recognise the fact that, in Company Law, a dividend is generated in total, across all shareholders, and not individually per shareholder. The risk with enabling dividends to be paid per shareholder was that inexperienced users might believe they could pay one shareholder and not another or pay dividends to several shareholders that didn't match their respective shareholdings, all of which would contravene company law (and could cause all sorts of tax problems).
In addition, by generating one global dividend, it's easier (and the new tool enables this) to make sure the company has sufficient profits to pay it. Again, allowing uncontrolled ad-hoc dividends does not demonstrate that the directors have considered profit adequacy and so any dividends paid over and above available profits would become illegal and would fall to be repaid to the company personally by the directors allowing them to be paid in the first place.
The improved tool also now creates the correct documentation firstly (as a minute) to record the directors' consideration of the availability of profits and the formal approval of the dividend and secondly a valid tax voucher for the shareholder. Without correct paperwork HMRC and dissenting shareholders & directors could dispute the authenticity of the dividend payments.
Finally, to get to your main query. Whilst convenient, the previous practice of generating an unpaid bill for a dividend declaration would, without adjustment, have made the company's annual accounts incorrect.
Unpaid bills are declared in the Balance Sheet report as "Trade Creditors". This key heading describes "sums owed to suppliers for goods and services" and so should not include sums due to shareholders for unpaid dividends, which, are more correctly described as "other creditors" or, more correctly, "related party creditors". This differentiation has become more important in recent years since it became necessary to electronically tag (categorise) balances when submitting accounts to HMRC and Companies House.
So, when the new tool creates a dividend and allocates it to shareholders each debt now goes to a new account code "Shareholder name dividends" under the account type "Dividend creditor". So all you do when actually paying the dividend is to pick this new account code for each shareholder, when explaining the bank statement entry or using "manage money" in the bank section.
As a tip, in most small companies, including my own, the shareholders are the directors and so what I do is to "pay off" the debt by making a payment from my Director's loan account in the bank section. I also do this with my salary and expense claims as it enables me to have one place that shows me a total of everything due to me.
Hope that makes sense
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