If you are a contractor paying subcontractors for construction work, you’ll probably need to make a CIS deduction on such Bills. Xero will automatically calculate the CIS deduction for a Bill (Accounts Payable Invoice) if two conditions are met:
The Contact for this Bill is CIS-enabled. You can check if a Contact is CIS-enabled in the Contact CIS Settings in the Contact record.
At least one line item contains the "CIS Labour Expense".
This is how to create a Bill with CIS deduction:
On the main page, click on the
button and select "Bill" for your Organisation, then click on
:
On the header level of your Bill specify the CIS Contact, on the item level use the CIS account:
The CIS deduction will be calculated automatically based on the rate specified in the Contact record. It doesn't have an impact on the Bill's TOTAL.
Submit the Bill for approval.
If you have set up the "Pull from Xero" step in the Bill workflow within ApprovalMax, you can create Bills with CIS deductions directly in Xero and then push them to ApprovalMax for approval.