Entering Vouchers for Subcontractors

When you receive a subcontractor's application for payment, you must create a voucher before you can issue payment.

Contractors are required to withhold certain amounts from a subcontractor's payment, depending on the type of tax regulations that apply to the subcontractor. To determine the total amount of the payment that is eligible for withholding, the contractor must distinguish between the taxable and nontaxable portions of each voucher.

You can enter vouchers for subcontractors using any of these programs:

  • Standard Voucher Entry (P0411).

  • Speed Voucher Entry (P0411SV).

  • Match Voucher - Application Certificate Management (P0411, version ZJDE7002).

If you use the Standard Voucher Entry or the Speed Voucher Entry program, you indicate whether each line is a taxable supply within the scope of the scheme. If you use the Match Voucher - Application Certificate Management program, the system identifies taxable supplies automatically, based on the Object Account category code that is specified in the CIS constants.

The system marks all voucher pay items with a status that is specified in the CIS constants, usually H (Held). When you run the CIS Update Payment Validation (R74U4030) program, the system marks pay items that you specified as eligible for withholding tax with a pay status of %. Only vouchers with a pay status of % are processed by the Calculate Withholding (R74U04580) program.

Note: The system validates whether the subcontractor's status is valid under the updated scheme and updates the status to % only for subcontractors who are valid under the updated scheme.