Construction Industry Scheme (CIS) support

Construction Industry Scheme (CIS) support

What is CIS?

Contractors and subcontractors in the UK construction industry are subject to special rules and regulations within the Construction Industry Scheme (CIS). Under this scheme you can manage contractor invoices, subcontractor bills, file your CIS returns with HM Revenue and Customs (HMRC), and bulk email payment and deduction statements to subcontractors. Xero provides a workflow for contractors, subcontractors and accountants involved in CIS to manage their obligations. ApprovalMax can integrate with that workflow and perform the approval process for CIS invoices, bills and credit notes.

How can I use CIS with ApprovalMax?

First, you need to set up CIS in Xero. To do so, got to the Accounting menu and select Advanced, then select Financial settings. Under Construction Industry Scheme, select whether you are a registered contractor, subcontractor, or both.



You'll find more detailed instructions in the Xero documentation.

How ApprovalMax works with CIS

Bills

If you are a contractor paying subcontractors for construction work, you’ll probably need to make a CIS deduction on bills. Xero will automatically calculate the CIS deduction for a Bill (Accounts Payable Invoice) if two conditions are met:
  1. The Contact for this Bill is CIS enabled. You can check if a Contact is CIS enabled via the Contact CIS Settings endpoint.
  2. At least one line item contains the ‘CIS Labour Expense’ or ‘CIS Materials’ system account.
If only one of the conditions above is fulfilled, ApprovalMax will not be able to pull the Bill from Xero for the Bill Review and Approval workflow.

Invoices

If you are a subcontractor doing construction work for a contractor, you’ll probably need to make a CIS deduction on sales invoices. Xero will automatically calculate the CIS deduction for a Sales Invoice (Accounts Receivable Invoice) if two conditions are met:
  1. The Organisation is CIS enabled. You can check whether the Organisation is CIS enabled via the Organisation CIS Settings endpoint.
  2. At least one line item contains the ‘CIS Labour Income’ system account.
If only one of the conditions above is fulfilled, ApprovalMax will not be able to pull the Sales Invoice from Xero for the Sales Invoice Approval workflow.

Credit Notes

Credit Notes work the same way as Bills and Invoices. ApprovalMax can pull them from Xero and run them through the AP Credit Note Approval workflow or AR Credit Note Approval workflow.
  1. If the CIS system accounts are not available, it’s because the Organisation is not CIS enabled.
  2. Contacts cannot be enabled for CIS via ApprovalMax. This needs to be done in Xero before a Contact can be used with CIS transactions.
  3. The CIS deduction amount cannot be provided by ApprovalMax, it will always be calculated by Xero.




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