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How do other users of Clearbooks produce deductions suffered reports?

Question asked by Rasa McClure 6 years ago

I have switched my two CIS clients to ClearBooks, and am already regretting it I had them on Solar accounts, which has very elegant way of producing CIS reports for deductions made and deductions suffered.,

Believe it is shortcoming by ClearBooks not to summarise CIS report at the bottom, so it could be verified against other software , or total used for reconciliation or other purposes. Further I was told that unless I authorized ClearBooks as agent I cannot submit CIS reports directly, nor verify contractors either. I am not willing to remove myself as an agent for all sort of thing happens with CIS, and I need to be able to talk to HMRC, hence removing myself as agent would jeopardise it. ClearBooks should make an option for accountant to act as agent not just for VAT but for CIS as well. Nevertheless above is least of my worries. I use Other software for filing which works perfectly fine, and will continue to do so. Nightmare for me is trying to get report of deductions suffered, which has to be prepared manually, and I must admit to struggle with it a lot. Maybe I can't see woods through the trees and there is easy way of preparing the report. Hope community will be able to help.

12 Replies

Ok, i'll run through it all from start to finish, it'll hopefully help anyone else reading this thread now or in the future.

First part is to make sure you've got both the CIS capabilities and the withholding tax accounts switched on: Settings > Toggle > Accounting CIS (tick) & Withholding tax (tick):

file

The CIS part is self explanatory but the withholding tax part will ensure all sales invoices and subbie bills automatically have 20% deducted from the labour and posted to a balance sheet account. If you quickly nip into your chart you'll see new codes have been created: Settings > Codes > All:

file

By clicking on edit next to one of the new codes you can see where the CIS deduction will be automatically posted to:

file file

For the benefit of this example, we'll leaving the withholding accounts are they are for the subbie payments but we'll delete them for sales. To do so, simply click on the edit feature next to CIS labour revenue 20% and 30% then remove the WHT details:

file

To replace using these WHT accounts, we'll set up a new bank account specifically for CIS deductions: Money > Bank Accounts > Add:

(classing it as a directors a/c leaves less details to enter)

file

Once CIS sales invoices have been raised, the next part of course would be to pay them once funds have been received. The part received onto the bank account would be posted as usual, with the outstanding balance left being the CIS deduction suffered. I'd then 'pay' this amount to the new CIS bank account we've just created as follows:

file

If we then pull up a statement of the CIS account all being well we'll be able to see the £200 entry we've just created:

file

Come month end, once a few more payments have been made the CIS a/c will probably look something along the lines of this (using the correct to/from dates):

file

And there you have it, a quick and easy way to transfer your CIS deductions suffered figure of £1467 over onto your EPS.

In terms of checking/reconciliation, there are probably a couple of additional steps that might be worth adding:

  1. Check the £1467 matches the slips you've received. As I said earlier on in this thread, it's a great way of forcing you to chase slips from slow senders: no slip, no payment to the CIS bank a/c.
  2. For easy viewing, you my like to journal out the total each month to a specific balance sheet a/c (perhaps use the WHT a/c Clear Books automatically set up earlier). The journal would look like this:

file

That then of course should clear your CIS a/c bank down to zero ready to start the next month. Therefore, you know if you're running the above process for the following month, you've got some kind of problem if the opening balance isn't zero (maybe a slip turned up late so you didn't 'pay' anything into the CIS a/c at that point). You'll then know you need to add the rogue figure into your next EPS and again jornal it out over to the CIS debtor a/c ready to start the next period afresh.

Hope that helps and I haven't bored you to death by going into so much detail. There are other ways you can do it too, by running the CIS bank a/c as an account for both CIS and PAYE thus merging it all together (as it ultimately gets offset anyway) but for the benefit of this thread I thought i'd keep it as simple as possible.

Questions on a postcard!! :-)

Hi Rasa

I agree with you re the agent/filing issue - it's something Clear Books certainly need to address sooner rather than later if they hope for accountants to be able to use the CIS part of the system properly. I'm a huge Clear Books fan but like you I use external CIS software (Moneysoft - fab) and will continue to do so for the time being.

As for the deductions report you require, I presume by suffered you mean from the contractors to whom sales invoices are being given? If so, how are you handling it at present?

I've just now noticed your other post in the ideas section so will comment further.

Working on the presumption you're currently using a withholding tax account for all CIS sales invoices issued, don't - go into your chart of accounts and switch it off. Instead, create a separate bank account called 'CIS Deductions' and physically pay the CIS there once payment has been received. This works great because a) you can then EASILY pull the suffered figure off the system to transfer over onto the EPS and b) you can use it as a fail-safe mechanism to ensure you've actually rec'd a CIS slip from the contractor in question i.e. don't 'pay' the amount to the CIS bank until the slip is in hand. I find this later part extremely useful as it gives everybody a kick up the rear to do the chasing as the weeks roll by instead of frantically come year-end!

If you need me to be more specific or provide any screenshots just let me know.

Thank you Kevin,

I assume CIS Bank has to reconcile with something, or are you using it as substitute for CIS deductions suffered account?

Screens would be appreciated if possible.

A substitute.

Will post something up in an hour or so.

Ok, i'll run through it all from start to finish, it'll hopefully help anyone else reading this thread now or in the future.

First part is to make sure you've got both the CIS capabilities and the withholding tax accounts switched on: Settings > Toggle > Accounting CIS (tick) & Withholding tax (tick):

file

The CIS part is self explanatory but the withholding tax part will ensure all sales invoices and subbie bills automatically have 20% deducted from the labour and posted to a balance sheet account. If you quickly nip into your chart you'll see new codes have been created: Settings > Codes > All:

file

By clicking on edit next to one of the new codes you can see where the CIS deduction will be automatically posted to:

file file

For the benefit of this example, we'll leaving the withholding accounts are they are for the subbie payments but we'll delete them for sales. To do so, simply click on the edit feature next to CIS labour revenue 20% and 30% then remove the WHT details:

file

To replace using these WHT accounts, we'll set up a new bank account specifically for CIS deductions: Money > Bank Accounts > Add:

(classing it as a directors a/c leaves less details to enter)

file

Once CIS sales invoices have been raised, the next part of course would be to pay them once funds have been received. The part received onto the bank account would be posted as usual, with the outstanding balance left being the CIS deduction suffered. I'd then 'pay' this amount to the new CIS bank account we've just created as follows:

file

If we then pull up a statement of the CIS account all being well we'll be able to see the £200 entry we've just created:

file

Come month end, once a few more payments have been made the CIS a/c will probably look something along the lines of this (using the correct to/from dates):

file

And there you have it, a quick and easy way to transfer your CIS deductions suffered figure of £1467 over onto your EPS.

In terms of checking/reconciliation, there are probably a couple of additional steps that might be worth adding:

  1. Check the £1467 matches the slips you've received. As I said earlier on in this thread, it's a great way of forcing you to chase slips from slow senders: no slip, no payment to the CIS bank a/c.
  2. For easy viewing, you my like to journal out the total each month to a specific balance sheet a/c (perhaps use the WHT a/c Clear Books automatically set up earlier). The journal would look like this:

file

That then of course should clear your CIS a/c bank down to zero ready to start the next month. Therefore, you know if you're running the above process for the following month, you've got some kind of problem if the opening balance isn't zero (maybe a slip turned up late so you didn't 'pay' anything into the CIS a/c at that point). You'll then know you need to add the rogue figure into your next EPS and again jornal it out over to the CIS debtor a/c ready to start the next period afresh.

Hope that helps and I haven't bored you to death by going into so much detail. There are other ways you can do it too, by running the CIS bank a/c as an account for both CIS and PAYE thus merging it all together (as it ultimately gets offset anyway) but for the benefit of this thread I thought i'd keep it as simple as possible.

Questions on a postcard!! :-)

PS sorry for any poor grammar, didn't read it over before posting!!

Thank you Kevin,

Really helpful!
It makes sense and of course that account can perfectly serve as deductions made in the period of pay, One problem I see: one of the reason I switched to CB, is that my client can raise sales invoices on Cb, and email them directly to his contractors.

I know that customs in this industry is to show payable net of deductions. I however will work my way around it in case it is a problem for my client. Will come up with something.

Once again, thank you a lot for time spent on this.

Hope Clear books will sort CIS reporting so it works just as nice as one on Soar accounts (they should, really look at hat software to see how painlessly it produces reports for both: deductions made and deduction suffered.

Above I posted sample report produced by Solar. Never failed. used this program for 5 years now, and by far it is superior as much as CIS is concerned.

You know what, so many contractors end up amending invoices or querying the amounts I think it's almost safer NOT to show the CIS deduction on the invoice itself. Retentions, discounts, wrong CIS payments, the list is endless! (as i'm sure you well know). I've got one client who issues large regular invoices to a contractor and the QS receiving always amends the invoice without telling anyone. The first my client knows about it is once payment's been received!

As a side note re your screenshot: seeing as Clear Books are able to produce a similar report for subbie CIS deductions made (which works great I might add), I wonder how much work would have to go into making the sales side of things happen.

I should think it is just a flip side of things to produce same report in sales. that's why i was surprised it did not exist.

As for invoices, I know my client used to send me his invoices in word, but it was holy nightmare to match them to incoming payment so we only used to record payment.

I am training them next week, s will bring up topic regarding deductions to be shown n the face of invoice. fingers crossed he will accept.

Thanks again for all your help!!!

Pleasure, just hola if he queries anything you're unsure of.

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