Hi All - Does anyone here work in the Construction Industry? Can I ask about your Sales Invoice format please? One of my clients currently raises his invoices in excel and we enter them in sage manually. He takes off the retention at the bottom of the invoice, leaving the amount he expects the client to pay. He/we want to use Sage to generate the Sales Invoices, this will streamline the process and leave a clear trail of the retentions so we don't miss invoicing and chasing them for payment.
I have proposed that we
Raise Sales Invoice for £10k, T1 to Nom Code 4000 (or similar)
Sales Credit for (retention value) £1k, T1 to Nom Code 1102 (other debtors) putting a FULL description on the Cr Note of which client, project, and when it's due
This leaves a balance of £9k on the Client's ledger and accounts for VAT on £9k too
Client pays us £9k +VAT, post this as normal as Sales Receipt.
Client account now at NIL balance
One year later.....
Raise Sales Invoice to Client for £1k T1 to nom code 1102 (this contras the Credit Note posted there a year ago) and accounts for £1k within VAT
Client pays us £1k + VAT, post this as Sales Receipt as normal
My Client has questioned whether his customers will be happy getting an invoice that doesn't show the retention. I'm sure they will be as most of his customers are very large Construction companies that take retentions as standard (often at greater amounts than we currently show on the existing invoice format).
Can anyone share their thoughts or experience with me on this please? Do you show the retention or leave it to the customer to work out?
13 years of working in the construction industry & my colleagues 20 years would lead us both to say ALWAYS show the retention.
The larger the building firm the worse they are it seems to messing the figures up. If you have a clear paper trail then it is easier to chase them when the time comes. I have to admit that it is one reason why we only use sage for payroll, not invoicing.
Does your clients staff who currently produce the invoice have access to the sage or would they need to start looking at a networked system? If its just you and this would mean they might encounter delays in invoicing because they need to feed the information in then I would just suggest you dont use sage for the invoicing - use a standalone process for invoicing and just input the information into sage either manually or via a data dump.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
