Retainage Overview

Retainge Overview

Retainage is the portion of an invoice is withheld until some condition is met. For example, a general contractor usually withholds a percentage of the subcontractor's invoices until sometime after the subcontractor finishes the work.

Enabling Retainage

AP Retainage is enabled throughout the system by turning on the global policy, Use AP Retainage, on the Invoice tab. This controls whether Retainage-related fields are available in the system.

Note

This policy cannot be turned off once it is turned on when there is outstanding Retainage to be paid.

Retainage Process

The system determines which accounts Retainage posts to by first looking to see if a Retainage Payable account was defined on the Batches Overrides tab, and if not then looking to the Retained Earnings account for the Entity (Standard Setup) or Company (Simplified Setup).

Other Retainage fields that appear when the policy Use AP Retainage is selected are:

A percentage is entered by the user into the setup vendor General tab in the Retainage field.

This percentage—and the system calculated Retainage amount—then default into the Select Invoices tab in Invoice Entry in the Retainage % andRetainage Amt fields.

Changes were made to Check Format Maintenance to allow users to add three new fields to check formats so that this information will print on check stubs: Retainage Amt, Retainage Paid, and Non-Retain Paid.

In Check Entry, these fields appear when the policy Use AP Retainage is selected :

A Retainage Amt column shows in the Check Entry Invoices tab when selecting invoices to pay.
An editable Retainage column shows on the detail lines on the Checks Detail tab to allow for entering Retainage to be paid for the invoices or invoice lines selected.
When invoices with Retainage are selected in Check Entry on the Select Invoices Tab, the non-Retainage amount that is left to be paid defaults into the Inv Amount field. An amount can be entered into the new Retainage field.
Once the non-Retainage amount has been paid for a line item, then on the Checks Detail Tab the Retainage field is filled in by the system with the Retainage amount and it can be paid.
NOTE that errors appear if the user tries to save a Check with amounts greater than the non-Retainage and Retainage amounts left to be paid.

In Check Runs, these fields appear when the policy Use AP Retainage is selected:

An Include Retainage check box was added on the Search tab’s Criteria panel, which determines if the Retainage amount is brought into the amount to pay when doing a search for Invoices to pay.
Once the user selects Invoices to pay, as shown on the Check Run tab, and then clicks the Add to Check Run button, the system brings over the Amount To Pay and Retainage To Pay for those items selected based on how search was done. The user can edit these amounts.

NOTE that an error message appears if the user tries to enter amounts for Amount To Pay and Retainage to Pay greater than what is left to pay.
When checks are printed, the stubs now show the columns chosen for the format, which can now include Retainage Amt, Retainage Paid, and Non-Retain Paid. Refer to Check Format Maintenance, above, for additional information.