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How do I add retention to an invoice? this retention is in relation to the monies retained by contractor which can then be released upon completion of the job

How do i Add to apply a retention to an invoice?

In my country, the law mandates 2% retention on the amount of the invoice. Additionally, there is a 1% on the amount of the invoice in favor of the municipality.

 

That is to say that the invoice I issue is taxed with 3% withholdings. How do I register these retention ?, attached sample.  This Sample is for 2% of retention a favor of government.

1 Comment
QuickBooks Team

Re: How do I add retention to an invoice? this retention is in relation to the monies retained by...

Hello there, @SINCO.

 

I appreciate you attaching a screenshot. I'm here to help you add and apply retention to an invoice.

 

You will have to set up a Retainage account and item first before you can apply it to an invoice. For the detailed instruction, follow the steps below.

 

Creating a Retainage account:

  1. Click the Accounting menu.
  2. Under the Chart of Accounts tab, click New.
  3. Click the Account Type drop-down arrow, then choose Other Current Assets.
  4. Click the Detail Type drop-down arrow, then choose Retainage.
  5. Enter a desired name.
  6. Click Save and close.

Setting up a Retainage item:

  1. Click the Gear icon.
  2. Choose Products and Services.
  3. Click New, then choose Service.
  4. Enter a desired name.
  5. Put a check mark in the I sell this product/service to my customers box.
  6. Click the Income account drop-down arrow, then choose the Retainage account you've created.
  7. Click Save and close.

 

Withholding the retainage from an invoice:

  1. Click the Plus sign (+) icon.
  2. Choose Invoice.
  3. Choose the customer.
  4. Fill out the invoice fields.
  5. In the next available line of the invoice, select the retainage item you've created.
  6. In the RATE column, enter the amount of the retainage as a negative (-) number. If your retainage is a percentage, you must calculate it manually.
  7. Click Save and Close.

 

That should do it, @SINCO.

 

Let me know if you have additional questions about retention. I'm still here to help you more. Have a good one.