If you work as subcontractor in the construction industry, you’ll probably need to register for the Construction Industry Scheme (CIS). And as a CIS-registered subcontractor, you’ll have to send invoices to your contractors.
There are a few different ways to create an invoice with CIS deductions, including online software and templates for Word and Excel. This article looks at the pros and cons of these two options and explains how Debitoor can help you create a CIS invoice.
What to include when you create a CIS invoice
Whether you use software or templates to create CIS invoices, you should always make sure that your invoices show:
- An invoice number
- An invoice date
- A due date
- Your registered name, address, and contact details
- Your contractor’s contact details
- Information about the goods and services provided
- The amount due before taxes and deductions
- The amount due after taxes and deductions.
VAT and CIS invoices
If you’re registered for VAT, your invoices also need to show your VAT number, tax rate(s), and the total amount of VAT due.
Bear in mind that you should charge VAT for both labour and supplies, and you should calculate VAT before taking CIS deductions.
Should I use invoicing software or an invoice template to create a CIS invoice?
One of the most popular ways to create a CIS invoice is to use invoicing software. Invoicing software automates stages of the invoicing process, making it quicker and easier to issue invoices, quotes, and credit notes.
Alternatively, you can create a CIS invoice using an invoice template for Word or Excel. This involves downloading a pre-made invoice template, which you can edit and customise to suit your needs.
Each approach has pros and cons, and the right choice for you depends on a number of different factors. Here’s what to think about when trying to decide how to create a CIS invoice:
How easy is it to add details about CIS deductions?
As a CIS-registered subcontractor, your invoices need to contain information about CIS deductions. This means that invoice templates for CIS subcontractors include some fields that you won’t find on a standard invoice template.
Whereas CIS-compatible invoicing software will automatically adjust the layout of your invoice to include these extra fields, this doesn’t happen automatically in Word or Excel. Instead, you need to manually make adjustments to your invoice template (which can be tricky and take up valuable time).
What’s the most accurate way to create a CIS invoice?
There are strict guidelines about how invoices should be labelled, what information you need to include, and how you should assign invoice numbers. If you don’t meet all of these guidelines, your invoices might not be accepted by contractors or tax authorities – so it’s essential that you get everything right.
If you’re a detail-orientated person, you might feel comfortable creating invoices with Word or Excel. But if you simply don't have time to double check every single word and number, invoicing software might be the way to go.
With invoicing software, invoice numbers are assigned automatically and you won’t be able to send an invoice unless it contains all of the required information – giving you peace of mind that your invoices are accurate and compliant.
How much would I pay to create a CIS invoice?
Cost is another factor to consider – particularly if you only issue the occasional invoice. You probably already have Word or Excel, so using either of these programs for invoicing would save you from paying extra fees.
On the other hand, if you issue invoices on a regular basis, a subscription to invoicing software might pay for itself by saving you time and hassle. Many invoicing programs also offer different types of subscriptions, so you can often choose a plan that both meets your needs and fits your budget.
How Debitoor can help you create a CIS invoice
Debitoor makes it easy to issue invoices with CIS deductions. With Debitoor, you can create and send invoices anywhere, anytime thanks to our online invoicing software, invoicing app for Android, and invoicing app for iOS.
Because Debitoor is designed for freelancers and small business owners, you don’t need to be an expert in accounting to use our software. Our intuitive and easy-to-use design makes it simple to issue invoices, track your expenses, and generate financial reports.
Find out more about using Debitoor if you work in the construction industry or try our 7-day free trial.