Stage Payments and Applications
Builders accounting software needs to deal with Job costing, CIS, Applications and Retentions.
CIA has a very flexible way of dealing with stage payments and applications to main contractors as explained below.
Application for Payment
Do you want to record the original Application for Payment on the accounting software or wait and enter the certified value?
If you post an Application on CIA it will be booked to a Sales Application Control nominal, which keeps this value separate to the invoices within the accounts. CIA also knows there is no VAT liability at this point.
When a Payment Certificate is received you can record the current certified, retention, MCD (main contractors discount) VAT (if applicable) and the actual amount received. CIA will record each stage, meaning it knows the total and previous certified, retention, MCD, VAT, and amount received.
When you are given a certified value do you need to produce a VAT invoice for your customer, or are they considered to be self billing/self certified for VAT purposes by the HMRC?
When you set a customer up there is an option to automatically produce VAT invoices from certificates. If an invoice is needed this can be produced showing the previous, cumulative and current figures.
Click for sample Sales Invoice.pdf
Does the VAT invoice need to be raised before you are paid or do you get paid when the certification is entered?
You can say the entry is a certification only where you need to produce a VAT invoice before receiving money or if the money has also been received at this point.
If the money is received then the journal is made straight to your bank account. When you only receive the certification the value is journaled to the Certification Control Nominal. This process turns the application into an invoice, when the money is received it is matched against the outstanding invoice.
When retention is held you are asked for a retention release date, this process creates a retention diary that is updated as each stage payment is processed. The Value of the retention is booked to a Retention Control Nominal at this point.
If retention is part released at the end of the contract you can part receive the outstanding retention for the contract and update the retention diary with the date of release for the remainder.