If you run a Contractor Limited Company it will normally be your responsibility to deal with Timesheets, Client Invoices and Payments. As part of genuinely ‘running a business’ you should demonstrate that you have full responsibility for these actions together with managing the Limited Company Bank Account.
If you’re a highly skilled professional and you are considering going into business with your own Contractor Limited Company Commonwealth Contractors can help. We partner with Chartered Accountants who specialise in contractor accounts and can help to maximise your net contract retention.
To speak to an experienced advisor call Commonwealth Contractors now on 0330 390 9021 or Submit your Details and we will get right back to you!
Contractor Limited Company Timesheets
When working on a Client Contract you will normally need to complete timesheets which may either be in hard copy format or on some form of client or agency timesheet management system.
It is important to enter accurate information relating to rates, dates etc and ensure that the timesheets are approved for payment by the client quickly. Errors or missing timesheet submission dates normally result in delayed payments.
The contract (terms and conditions) that you are working further to should include full details of the agency or client’s timesheet submission process. If you are unsure of the process it is a good idea to speak to your client or agency contact prior to commencing the assignment.
Contractor Limited Company Invoices
Normally at the end of each week or month (depending upon the invoicing terms of the client or agency) you will need to raise an invoice for services delivered.
Invoices should include the following information;
- Company Details (i.e. Company Name, Address, Telephone Number, Email Address, Incorporation Number, VAT Registration Number)
- Invoice Details (i.e. Invoice Date, Invoice Reference Number etc)
- Billing Breakdown (Days/Hours Worked, Billing Rate, Ex VAT Sub Total, VAT Charged, Inclusive of VAT Total)
- Payment Information (Bank Name, Sort Code, Account Number etc)
If you’re business is VAT registered you will need to detail your VAT registration number on the Invoice and charge standard rate VAT (currently 20%). If you have started working on the project and have applied for VAT registration but have yet to receive a letter of VAT registration you should not charge VAT on the invoice. However, you should go back and charge VAT on becoming VAT registered if the registration date is backdated.
Contractor Limited Company Payments
It is very important to stay on top of Client and Agency payments. Although 99% of Clients and Agencies pay on time and without any issues occasionally problems occur where a Client or Agency is having financial difficulties.
If you are concerned about the credit worthiness of a Client or Agency prior to starting the contract it may be worthwhile paying for a credit check report (simply to satisfy yourself).
Please be aware that if you have agreed a direct contract with a Client you may have to wait 30, 60 or 90 days for payment to be made. Agencies are often engaged by Clients not simply to make the recruitment process a lot more efficient but also to ‘factor’ billings. In such a situation an agency would invoice a client at 30, 60 or 90 day payment terms however it may pay a Contractor at weekly or monthly intervals.
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To find out more about Commonwealth Contractors call now on 0330 390 9021 or Submit your Details and we will get right back to you!