Purchase invoice and Payment

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Before you start to create a purchase documents for a subcontractor that is registered for retention tax you need to be sure that the setup is correct on :

  • vendors
  • items
  • resources
  • fixed assets
  • g/l accounts.

You find more information here.

Purchase document

  1. Choose the 🔎 icon, enter Purchase Order/Purchase Invoice, and then choose the related link.
  2. Fill in the fields as necessary. Hover over a field to read a short description. If the vendor is registered for retention tax all lines, except the type of Comment and Charge (Item), automatically gets the CIS/RCT Business Posting Group populated on the line.
  3. If the CIS/RCT Product Posting Group is not set on the resource, item or g/l account, you need to add this information on the line.

When posting the purchase invoice the system creates a CIS/RCT Entry and Detailed CIS/RCT Entry when you post the purchase invoice. The deducted tax amount is recorded in the Expected Amount field.

Note that you can correct an invoice after you have closed the tax retention period. It is the payments that are reported to HMRC, not the invoices.

Pay a purchase invoice

When you create a payment an additional Detailed CIS/RCT Entry will be created. This entry will have the Type Application. On the CIS/RCT Entry, the Expected Amount will be reduced and the Actual Amount will be increased with a ratio of the payment.

When the document applied, the CIS/RCT Entry and the last Detailed CIS/RCT Entry will have Expected Amount zero and Actual Amount with entire deduction.