Our webinar – Raising invoices and Getting Paid Quicker was on the 19th May 2021.

We were joined by Paul Layte FCA from Next Level Business. Paul is a business growth specialist who has founded several high profile corporate start-ups and has worked in board level roles in four different listed businesses. A chartered accountant by background with a passion for growing businesses of all shapes and sizes which he now does through his own digital chartered accountancy firm Next Level Business where Paul, as the founder and CEO also provides advisory and CFO support to many ambitious small businesses ans SME’s.

Okappy is a business 2 business connected workforce management platform which applies social and market networking technology to a real business need. The need to communicate and collaborate with your employees who are often at different locations (and now more than ever). With your subcontractors and with your customers.

Okappy helps the most forward looking and dynamic companies increase transparency, reduce duplication, costs and errors and increase efficiency. Ultimately making a significant contribution to bottom line profits.

With Okappy, you can connect to your employees, customers and subcontractors.
Send and receive jobs.

See the status of those jobs as they’re updated by your engineers and subcontractors
Then raise your invoices at the touch of a button.

It’s those first three points which I am touching on today.

Late payments are an issue in the UK. Particularly in some of the sectors that customers work in. i..e, construction, facilities management, housing.

Research by BAC, the payment organization, suggests that £32.4 billion is owed which equates to about £35k for the average smaller enterprise.

Late payments are due to a number of factors. What gets the most headlines is large companies delaying payment to improve their own cash flow. But a lot is also due to your own processes. One of the big changes we see in companies that move to digital workforce management is the speed in which invoices can be generated. Systems are obviously part of it, but processes are also key which I’m sure Paul will talk about.

I think what we want you to take away is that late payments can be a headache but there is a lot you can do about it to make the whole process smoother, more efficient and much quicker.

On that note, I’m going to introduce you to Paul.

Paul, CEO and founder of Next Level Business, the Growth Accountants. He has founded, grown and exited several high-profile corporate startups in the telecoms and technology sectors.

He’s worked in board level roles in four different listed businesses and been a non-executive director and chairman of several smaller companies.

Like me, Paul is a keen motorsports enthusiast, Paul likes rugby and reminiscing about past sporting glories in the swimming pool. So maybe that’s a question you can ask him about at the end.

When you’re onboarding a customer, ensure they are set up correctly. You know what information is required on their invoices.

Send your invoices as soon as possible. A lot of delays are actually caused by the invoice not going out in the first place.

Ensure it is easy for your customer to pay your invoice. Ensure your bank details are correct, any additional such as IBAN numbers are included and that your business name matches your bank account name.

Also offer different options for your customers. Can they pay by BACs, credit card or debit card.

Monitor the due date of your invoices. And ensure you give your customer a call a week before the invoice is due. This ensures that everything is in order before they attempt payment.

This also entitles you to chase your invoices as soon as it is overdue. If you chase the day after the due date, then your customer will learn that you will always follow up on overdue invoices. If they are looking to delay payments then it’s likely they will delay the invoices from customers they haven’t heard from rather than the ones that make the most noise.

Finally once your customer has paid your invoice. Don’t forget to thank them.

One of the first decision companies make when joining Okappy is how to put in a control to ensure that you have raised your invoices.

A lot of companies we speak to talk about the difficulty of getting job sheets back from their guys, understanding what has been done and then raising an invoice in a timely manner. Particular when companies rely on paperwork or spreadsheets it’s too easy to forget to raise an invoice and we certainly hear that a lot.

With Okappy, there are 2 ways you can keep on top of that process and ensure an invoice has been raised.

1) The first way is to automatically archive jobs once the invoice has been raised. This way you can see at a glance that if there are completed jobs on your dashboard then an invoice hasn’t been raised.

2) The second way is to add the invoiced column to your dashboard. That way you can see a tick once the invoice has been raised.
It’s up to you which process you use, most go with the first as it keeps the dashboard cleaner and helps you see the wood from the trees.

The second step in using a system is to determine how you can raise an invoice.

With Okappy, there’s various ways. You can raise an invoice from a job

You can raise it from a quote or you can raise a miscellaneous invoice.

One thing to note with the network, you can also receive invoices from your subcontractors or suppliers. That includes our invoices to you.

To raise an invoice from a job

• Click the three dots next to your job
• Select Raise invoices
• Select item (product or service)
• Edit your description
• Raise as draft or submit

To raise an invoice from a quote

• Click the three dots next to your job
• Select Raise invoices
• Select item (product or service)
• Edit your description
• Raise as draft or submit

To raise a miscellaneous invoice

• Click the three dots next to your job
• Select Raise invoices
• Select item (product or service)
• Edit your description
• Raise as draft or submit

Submitting your invoices.

Changing your invoice from Draft to Submitted means that your customer can view your invoice and pay it (depending on your settings)

One thing Paul mentioned was being on top of which invoices have been paid. With Okappy you can look at it at a granular level with each invoice. You can also see how much is owed at a customer level.

The first thing to note is how the invoices actually get marked as paid. There’s three ways this can be done.

1. You can manually mark the invoice as paid. To do that click the three dots next to the relevant invoice and click Mark as paid
2. If you are using Xero and it’s connected to Okappy, then marking the invoice as paid within Xero will also mark the invoice as paid within Okappy automatically.
3. The final way that invoices get marked as paid is if they are paid through Okappy’s own payment gateway. I’ll talk more about that in a bit, but if a customer pays an invoice via Okappy then you will see that the invoice has been paid and when. You can also set up email alerts to notify that an invoice has been paid.

Once an invoice has been marked as paid then this can be seen in three areas.

You can see it in your invoices dashboard, the paid column towards the right of the screen.

You can see it when raising a job. When you select a customer, their outstanding balance is shown which is the value of all invoices raised less those which have been paid.

There’s also a couple of reports – the invoices paid report and the outstanding invoices report which shows which invoices have been paid or not.

Paul mentioned about making it easy for your customer to pay you.

If you are taking payments through BACS or direct, then ensure your invoice template is updated with all the correct details.

You also have the option to take payment through Okappy. To do this, you simply enable the payment button on your invoices. When a customer clicks the button they’ll be taken to our payment gateway where they can make a secure payment to cover your invoice.

You can determine which customers the button shows for, you can show it on all your invoices or not show it all.

To change the setting for all customers, go to invoice options and then select the payment button link.

To change the settings for a specific customer. Go to the connections screen, find the relevant customer and click Payment settings

The first checkbox determines whether the Pay invoice button shows or not.

You can also set who pays the transaction charge. It can be added to the invoice in which case your customers who pays. It can be taken off the invoices in which case you get the amount of the invoice less the transaction charge. Or you can split the payment between yourself and your customer.

We talked about tips for getting paid quicker including ensure the setup of your customer is correct, ensure invoices are sent in a timely manner and keep an eye on the due date.

Chase as soon as the invoice is due and don’t forget to say thank you

We showed you three ways to raise your invoices on Okappy. From a job, from a quote and a miscellaneous invoice.

We showed various ways that you could see whether an invoice has been paid or the value of all invoices outstanding.

Finally we discussed using the pay now functionality from within Okappy to automate your process and make it easier for your customer to pay your invoices.

There’s lots of information on our help and support pages including help articles, questions and answers and videos.

Here’s some links to articles which we have covered today.

https://www.okappy.com/support

Invoices

https://www.okappy.com/support/invoices
https://www.okappy.com/support-article/how-to-raise-an-invoice-from-a-job/
https://www.okappy.com/support-article/view-all-your-invoices-raised-from-the-invoices-screen/
https://www.okappy.com/support-article/taking-payments-via-okappy/
https://www.okappy.com/support-article/updating-your-invoice-template/

Reports

https://www.okappy.com/support/reports
https://www.okappy.com/support-article/invoices-raised-report/
https://www.okappy.com/support-article/invoices-for-customer-report/
https://www.okappy.com/support-article/outstanding-invoices-report/
https://www.okappy.com/support-article/paid-invoices-report/

A number of short, self explanatory videos are also available.

Thanks once again for attending our webinar. I hope you found it useful.

Please connect with Okappy on twitter at @ok_appy or follow us on LinkedIn at https://www.linkedin.com/company/okappy-ltd-

You can also follow Next Level Business at on twitter at @_nlbusiness or on LinkedIn at https://www.linkedin.com/company/next-level-business

The VAT Reverse Charge legislation was introduced in March 2021.  Over 20 minutes we discussed how the VAT reverse charge works, when you should use it and how to configure Okappy along with your other systems to provide VAT reverse charge invoices to your customers.

Okappy is a business two business connected workforce management platform which applies social and market networking technology to a real business need using our unique Portal+ platform. The need to communicate and collaborate with your employees who are often at different locations (and now more than ever). With your subcontractors and with your customers.

Okappy helps the most forward looking and dynamic companies increase transparency, reduce duplication, costs and errors and increase efficiency. Ultimately making a significant contribution to bottom line profits.

With Okappy, you can connect to your employees, customers and subcontractors.

• Send and receive jobs
• See the status of those jobs as they’re updated by your engineers and subcontractors
• Then raise your invoices at the touch of a button

It’s that last stage which was the reason for the webinar.

From 1st March 2021, if you supply goods and services to the construction sector, then you will need to implement VAT reverse charging on your invoices

Before VAT Reverse charge, you would have paid VAT on products or services bought in the UK. You would declare the total amount of VAT you are going to pay to HMRC that quarter, and also the total amount of VAT you are going to reclaim.

Domestic VAT reverse charge legislation (DRC) is a change in the way Construction Industry Scheme (CIS) registered construction businesses handle and pay VAT. It was introduced at the start of this month, having previously been delayed from October 2019.

The reason why HMRC are introducing it is because they’ve identified construction as one of the leading sectors for VAT fraud where some sub-contractors claim VAT but never pay it.

By moving the VAT charge to the end user, HMRC intends to make this kind of fraud impossible. So now, sub-contractors will require the contractor employing them to handle and pay the VAT directly to HMRC.

The new legislation affects all VAT registered businesses who supply or receive construction and building services that are reported under the CIS.

• Check when you must use the reverse charge
• Find out how the charge works if you supply products and services
• Find out how the charge works if you purchase products and services
• Understand how your systems work with the VAT reverse charge
• Consider the impact on your cashflows
• Provide training to staff

We talked about how the VAT reverse charge works with Okappy and with Xero. If you’re using other accounting software, you’ll need to check that your software is up to date, especially if you have older desktop based systems.

You also want to think how it could affect your cashflow especially if you are paying a lot of VAT on supplies but now not receiving VAT from your customers.  It may be worth changing over to HRMC’s monthly repayment trader scheme. Either way, it is worth planning out your bills over the next couple of quarters when cash flow will be at its most difficult.

It must be used if you’re a VAT registered company operating within the Construction Industry Scheme (CIS).  But, it must only be used in specific circumstances.  It applies to materials if they’re used as part of a service provided under CIS. Not if they are provided independently.

• Your customer must be VAT registered in the UK
• The payment for supply is reporting within CIS
• Services are being supplied at the standard or reduced rate
• You are not an employment business
• You’re customer is not an end user or intermediary supplier.

Invoices should clearly indicate the reverse charge applies. They should show the percentgate of VAT which was charged (whether reduced rate or standard) and have a label advising that the “Customer to account to HMRC for the reverse charge output tax on the VAT exclusive price of items marked ‘reverse charge’ at the relevant VAT rate as shown.

There has been discussion around whether the amount of VAT which would otherwise have been calculated should be shown. The general consensus seems to be that it shouldn’t and certainly mostly other software provides are doing it this way.

I think the fear is that, and particularly with accounting software is that if there is a calculation then the VAT will end up someone in your accounts which it shouldn’t. My feeling also is that it’s the responsibility of the ultimate contractor to calculate the VAT and they shouldn’t be blindly copying your invoices.

Two set up VAT reverse charging on Okappy depends on whether you are using Xero or other.

If you’re not using Xero, you first need to check the VAT reverse charge option in the Connections screen > Customers > Account settings

Then set up an item or items which will be used for VAT reverse charge.

This menu is available from the Invoice screen > Invoice options > Account settings

When you raise your invoices, if you select the VAT reverse chargeable item for a customer that has the VAT reverse charge flag set, then the VAT will be set to Zero and the line will show that VAT reverse charge has been used.

With Xero, it’s a bit different as Okappy pulls in the items automatically from Xero.

To set up VAT reverse charge in Xero, first go to the Accounting menu within Xero > Advanced > Tax rates

And then add the reverse charge tax rates

Then from the Business menu, select Products and Services and either add or edit the tax rate on a product or service to use the new VAT reverse charge tax rate.

Then it’s the same as before, select the relevant item when raising your invoice and the VAT will automatically be set to Zero and the relevant labels added.

Leave your details above and we’ll send out a copy of the slides. We’re also interested to hear of any other topics you may like to hear about for future webinars.