A shoebox of deduction statements
You work for several main contractors. Each pays you net of CIS deductions and sends a monthly deduction statement, by email, by post or through a portal. Some months a statement does not arrive. Some statements show a different gross figure from the invoice, because the contractor treated part of it as materials differently, or paid late.
At year end, your accountant asks for all the statements and a reconciliation. The office spends days finding them and working out why the totals do not agree.
Why statements do not add up
Payments, invoices and statements are produced by different people on different timetables. The contractor's figures reflect when they paid and how they split labour and materials, which may not match your invoice. Nobody on your side checks each month, so differences pile up.
- Statements arrive through different routes and are not filed together.
- Missing statements are not noticed.
- Gross, materials and deduction figures differ from invoices.
- Payments received are not matched to statements.
- Year-end reconciliation is done in one go.
What it costs
Accountant time, which you pay for. Office time finding statements. And, depending on your circumstances, deductions that cannot be properly accounted for without the statements. Your accountant or tax adviser decides what the figures mean for you; the flow makes sure they have complete information.
It also clouds cash flow. If you do not know how much has been deducted across all your contractors so far this year, you cannot see the difference between what you invoiced and what you will actually have in the bank, which makes planning harder.
The statement matching we build
- Deduction statements are collected from email automatically, and posted ones are scanned into the same place.
- Each statement is read: contractor, period, gross amount, materials, deduction, net paid.
- Statements are matched to your invoices to that contractor and to the payments received in your bank feed.
- Differences between invoiced and stated amounts, or between net paid and received, are listed for a person to look at.
- Each month, the flow checks which contractors paid you but have not sent a statement, and drafts a request.
- Matched statements are recorded in your accounts package, such as Xero, Sage or QuickBooks, against the contractor.
- A year-end summary by contractor is produced for your accountant, with the statements attached.
| Check | Flags |
|---|---|
| Statement received | Payments with no statement |
| Gross matches invoice | Differences in gross or materials |
| Net matches bank | Amounts that do not agree |
| Deductions recorded | Statements not in the accounts |
We do not give tax advice. We make sure the statements are collected, matched and ready for the person who does.
What changes
Missing statements are chased the month they are missed. Differences are raised with the contractor while the payment is fresh. Year end becomes a report, not a search. And your accountant spends their time on advice rather than sorting paper.
It also helps with contractors. A polite, specific query about a missing statement or a figure that does not match, sent the month it happens, gets a better response than a list of questions at year end.
Is this your CIS paperwork?
- Deduction statements are filed wherever they land.
- You do not know which months are missing a statement.
- Statement figures do not match your invoices.
- Year-end reconciliation takes days.