How do you account for dividends when using XIRR?

[K|muRa^84]

if the dividends aren't reinvested immediately, should you enter the dividend payout as a cash flowing out of your portfolio, and subsequently do the reverse at the point of reinvestment?

 

[tangent314]

XIRR does take into account dividend payout, it's the same as a withdrawal. For example:

2019-01-01 $100000 Initial deposit
2019-02-01 $10000 RSP
2019-03-01 $10000 RSP
2019-04-01 $10000 RSP
2019-05-01 $10000 RSP
2019-06-01 $10000 RSP
2019-07-01 -$3200 Dividend received
2019-07-01 $10000 RSP
2019-08-01 $10000 RSP
2019-08-16 -$170000 Current value

Then calculate XIRR across the whole thing for a result of 3.93%