Withhold retainage on vendor bills

Access can vary depending on your organization's subscriptions and your permissions. You need the following:

Requirements to configure retainage
Prerequisites Before you can enable retainage features, you must first configure:
  • Accounts Payable (AP)
  • Accounts Receivable (AR)
  • Cash Management
  • General Ledger (GL)
  • Order Entry (OE)
  • Projects
  • Purchasing
Restrictions
  • You cannot enable a Contracts and Construction subscription together on the same company.
  • Configure Construction-enabled companies with the accrual only accounting method.
  • The Construction subscription enables the project, task, and cost type dimensions. While use is optional, you can't disable these dimensions.
Subscription
  • Construction
  • Projects, Module: Project Costing and Billing
User Type
  • Business
  • Project Manager
  • Construction Manager
Permissions

Retainage permissions:

  • Accounts Receivable release retainage: release retainage on customer invoices
  • Accounts Payable release retainage: release retainage on vendor bills

Ask your system administrator for assistance.

Understand retainage

Retainage (also known as retention) is a portion of the agreed upon contract price intentionally withheld until the work is substantially complete to assure that the customer or vendor (for projects and grants) or contractor or subcontractor (for Construction) satisfies their obligations and completes a project.

Construction projects can include work done by contractors or subcontractors. Use purchase orders (commonly referred to as Construction subcontracts) to track retainage owed to contractors or subcontractors (vendors).

Learn more about retainage.

Configure retainage for vendors

  1. Set up retainage payable GL accounts for vendors.
  2. In Purchasing, set up transaction definitions for orders (TD order type—subcontracts).
  3. Set up vendors in Accounts Payable and define the default retainage percentage of the vendor.
  4. Configure retainage.

Withhold retainage on vendor bills

  1. Go to Purchasing > Transactions.
  2. Locate the relevant Construction subcontract (purchase order) and click Convert.
  3. For each entry in the Entries section, confirm the amounts and retainage percentage.
  4. Enter the desired information in the applicable fields. At a minimum, complete the required header fields to post or save a draft of the purchasing transaction.
  5. After you enter transaction information, do one of the following:
    • Click Post to save the transaction. The transaction has a closed state and is ready for the next step in your workflow.
    • Click Draft to save the transaction in a draft state.
      • Draft invoices remain in Purchasing until you post the invoice. Only posted invoices (closed state) appear in Accounts Payable.
  6. To review the new invoice, go to Accounts Payable > All > Bills.
  7. In Purchasing, when you view the invoice, you can use the Posting Details tab to view the posted retainage information. This tab appears in Purchasing only; it is not visible in Accounts Payable.