How do I record a dividend/dividend reinvestment? (Q Mac)

Marcrest

I am new to Quicken subscription. I have a brokerage account which all my transactions flow through. I have accounts set-up for each security/stock that I own.

When I view my account activity through my bank, (RBC), I see a cash dividend entry and a dividend reinvestment entry. When I enter the cash dividend into my brokerage account, I record it as "Dividend Income" – pretty straight forward. When I enter the "Reinvest Dividend" into my brokerage account, it doesn't create a debit to the brokerage account nor does it add shares to the security account. And if I enter a "Buy" instead, it debits the brokerage account, but it neglects to add shares to the security account.

Alternately, if I go to the stock account and enter "Dividend Income" it adds cash to the account, but doesn't offer an option to credit my brokerage account. And when I enter the "Reinvest Dividend", it adds shares, but doesn't provide the option to debit my brokerage account.

Am I doing something incorrectly? Is this not the appropriate way to record this?

signed,

baffled and confused

Boatnmaniac

"Reinvest Dividend" is a single transaction in which the dividend paid by the security is used by the security to buy more of that security.  No cash is credited to or debited from the cash balance of the account...and you won't be given the option to do that.  Just enter the security, the $ amount of the dividend and the number of shares that were purchased from the reinvestment.

I don't know much about QM (I am a QW user) but the transaction entry process for a "Buy" should be somewhat similar between them.  In QW, the enter transaction popup has a box in the lower left corner where you need to tell Quicken where the cash comes from to pay for the buy.  QM's transaction entry dialog should have something similar.  Make sure it shows it is to come from your investment account and not some other account.

Each brokerage treats dividend reinvestments differently.  Some will show a single reinvest dividend transaction while others will do it as does yours...one transaction for the dividend payment and another transaction for the "reinvestment" purchase (which is really a Buy). 

If you use Quicken to download the transactions Quicken will correctly enter it just as the brokerage downloaded it. 

If you manually enter the transactions you can do it either way but it's probably best to enter it like your brokerage shows, however, instead of using a Reinvest Dividend transaction use Buy and make sure it is set up to take the cash from your account's cash balance.  You can also add a note stating that it is a dividend reinvestment if you want to.  (Also, make sure the transaction is Buy, not Add Shares.  Add Shares will not use any cash for the transaction.)

Marcrest

Thank you @Boatnmaniac for your response. I understand what a Reinvest Dividend is. I just feel that Quicken should include some options to credit cash to a Brokerage account, and then Buy an unequal amount of said Security, while posting the number of shares purchased to that Security account, in a single transaction window.

I appreciate your comment regarding "Buying" a security, in the second paragraph, however QM, does not offer the said, 'popup in the lower left corner'.

I do not use Quicken to download transactions. I manually enter them. Unfortunately, as mentioned previously, when I enter a "Buy" from the Brokerage account it doesn't add shares to the Security account. And if I enter it into the Security account it doesn't offer up an opportunity to define which account it should be debiting to make the purchase!

All of this means multiple entries into multiple accounts. VERY inefficient and offers a multitude of opportunities for entry errors.

Attached are two screen shots of the entry windows from both a security and the brokerage account. As you can see they don't offer alternate accounts to debit from.

Boatnmaniac

@Marcrest Thanks for the screen shots.  While the Buy transaction entry doesn't have the ability to select which account the cash is taken from it does default to the account cash balance so that is good.  But I don't understand why after you click on "Save" it is not adding the shares to your security holdings.

I'm pretty sure that Quicken doesn't allow the option for having cash from a Reinvest Dividend transaction directed into Cash and then be pulled out of Cash is that there would then be cash flow which contradicts the standard investments definition of what a Reinvest Dividend transaction is (no cash flow).  Since you want to show the flow of the dividend into and out of Cash I think you have no other option but to enter the two separate transactions (Dividend and then Buy).  But then there's that Buy issue which I can't explain.  Hopefully someone with QM expertise will weigh in here and help you get this figured out.

Marcrest

@boatnmaniac Again, thank you for your input. I am scratching my head as well. Adding shares to the security account seems like very basic accounting practise and if I'm paying a monthly fee for a product, I do expect that it would cover the "basics"!! I will hopefully get additional responses, maybe even one from Quicken/Intuit which will explain why this isn't working. Cheers and I hope Covid-19 isn't wreaking havoc in your life. Stay well, stay safe

Boatnmaniac

You stay well and stay safe, too!