In this article, we’ll be breaking down how Cloud Accounting benefits Construction Companies. As well as the core benefits, we’ll talk about CIS, navigating Domestic Reverse Charge VAT and provide you with actionable steps for implementation and change within construction companies.
Cloud Accounting: The Basics in Plain English
Cloud accounting isn’t just a buzzword – it’s like having your entire accounting system available on your phone or laptop, anywhere you are. For construction firms, this means:
- No more paperwork cluttering your site office
- Real-time updates on project costs
- Instant access to subcontractor information
Since the introduction of cloud accounting, we have seen significant changes to how the construction industry manages their accounting. It’s easier than ever before to raise sales invoices, manage costs and achieve financial clarity.
And finally shoeboxes are for shoes and not receipts!
CIS-Specific Cloud Accounting Benefits
CIS is a monthly compliance burden for construction companies. CIS monthly returns are required to be filed by the 19th of each month, whilst any CIS suffered is also required to be filed along with the monthly submissions to HMRC. Before cloud accounting, workings for CIS would be manual and adding on new subcontractors was a labourous task. Cloud accounting brings the following benefits to the monthly CIS compliance:
- Automatic CIS calculations
- Digital submission of CIS returns
- Real-time verification of subcontractor status
- Immediate access to payment and deduction records
Using a software like Xero, is guaranteed to simplify CIS compliance each month and save time.
What about Cloud Accounting and VAT?
Understanding VAT can be a minefield, especially within the construction industry. Within the construction industry, in addition to the standard VAT rates, there are many supplies that will be under the domestic reverse charge VAT rules, and other supplies may qualify for Zero or Reduced (5%) Rate VAT.
It’s the responsibility of a construction business to ensure they’re accounting for VAT correctly. Brisan are a resource for your business when it comes to navigating VAT in the construction industry, but using a Cloud Accounting software solution makes accounting for the VAT a breeze:
- Making Tax Digital Compliant
- All your records in one place and a clear audit trail.
- Rules Available to ensure consistant and correct returns
- Easily filed VAT returns
Real-World Money Savings
Let’s talk numbers that matter to construction businesses:
- Reduced admin time (typically 2-3 hours saved per week)
- Fewer errors in CIS calculations
- Better cash flow visibility
- Improved Project Management
- Faster invoice processing
Practical Implementation Steps for Cloud Accounting in Construction Business
- Choose your cloud platform (like Xero, which Brisan specialises in)
- Set up your basic accounting structure
- Import your existing and historical data (using a tool such as MoveMyBooks)
- Configure CIS and VAT settings
- Train your team (with support from Brisan’s training services)
- Streamline your administration and bookkeeping processes
How Can Brisan Help?
Cloud accounting isn’t just about keeping up with technology – it’s about making your construction business more efficient and profitable. With Brisan’s expertise as a Xero Platinum Partner and deep understanding of the construction industry, we can help make this transition smooth and beneficial for your business.
If you would like support with training, implementation or audit of existing systems and a recommendation of improvements, contact us to arrange a call.
