Self-Billing has Landed!

 

Ready to make your contractor – agency relationship even easier?

The new release of our Clarity365 online version includes our exciting new self-billing feature allowing recruitment agencies and contractors alike to benefit from simple, compliant self-billing.

Self-billing saves time and gives greater control of the value which is invoiced to the recruitment agency. Transforming a complex process into a more efficient one for both contractor and recruitment agency.

 

What is self-billing?

“Self-billing is an arrangement between a contractor’s limited company (Supplier) and their customer. Both customer and supplier must be VAT registered. The customer prepares the supplier’s invoice and forwards a copy to the supplier with the payment.

If you want to put a self-billing arrangement in place you don’t have to tell HM Revenue and Customs (HMRC) or get approval from them. But you do have to:

  • get your supplier or customer to agree to the arrangement
  • meet certain conditions”

Source: GOV.UK

 

The self-billing process explained

There are typically two ways self-billing invoices can be created within Clarity365:

Agency (Company) Self-billing

The agency (company) creates an invoice on the contractor's behalf (based on a timesheet the contractor has worked) sending it to them along with payment. This agreement allows the company to have control over the invoice amounts whilst taking the time-consuming admin work off the contractor.

Contractor Self-billing

The contractor (or user) enters a timesheet or expense, creates the invoice and sends to the company/agency for approval and payment. This process allows the contractor to have more control over the invoices sent whilst giving the company an invoicing workflow.

 

The benefits of self-billing in Clarity365

Below are some of the features and benefits of using Clarity365’s self-billing module for both your company and contractor.

    Feature

    Benefit

    Who

   Online Approvals

    Control of self-billing process. The control of invoices is eliminated from
    the contractor and handled by you.

    Agency (Company)

   Set payment terms

    Improves cash flow

    Agency (Company)

   Online approval workflow

    Electronic invoice management results in less administration, reduced
    costs and less time spent on invoice management.

    Agency  & Contractor

   Invoices created from already approved & invoiced

   timesheets / expenses

    You are safe in the knowledge payment amounts are correct from
    client approval.

    Agency & Contractor

   Customisable logo for company and contractor

    Invoices are created in your own format, which facilitates financial
    administration.

    Agency & Contractor

   Downloadable PDF invoices & excel statement exports

    Flexibility – it is possible to outsource the entire invoice management
    process.

    Agency & Contractor

   Audit trail

    HMRC purposes.

    Contractor

   Set own VAT number & company details

    Custom built HMRC compliant invoices.

    Contractor

 

How do I self-bill in Clarity365?

Self-billing in Clarity365 can reflect either the ‘company’ or ‘user’ process. It can be controlled depending on how your contractors are set up, so even if you have a mixture of both this can be catered for. Click here to find out more about enabling self-billing.

Once you have completed set up, it’s as simple as creating an invoice. Self-billing invoices can be created for timesheets and expenses that have already had a client’s invoice generated for them and marked as paid.

Using the ‘company’ set up the invoice can be created in bulk for multiple contractor’s items and no approval is needed. The invoice is then sent to the contractor and a payment date can be set.

With the ‘user’ process the contractor simply creates an invoice for their items and sends it to the company for approval, just like our timesheet and expense workflow. This can then be approved and a payment date set, whilst the contractor is updated of the status in real-time.

To find out more about the Clarity365 self-billing process, click here.

 

When should a self-billing agreement be reviewed?

Agreements usually last 12 months, by which time you will need to review the agreement. HMRC recommends you ensure you have a written agreement with your contractor stating they accept your agreement. You can easily disable self-billing for one of your contractors in Clarity365 if a self-billing agreement comes to an end.

 

For more information on the self-billing rules and regulations visit GOV.UK.

If you’d like to find out more about the Clarity365 self-billing process contact us today or sign up for a free trial.

 

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