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Level 1

How can we efficiently track customer holdbacks and payments of holdbacks?

When we invoice customers they holdback 10% of the invoice until the job is complete. Currently we use an item code HB which is a 10% deduction on the ivnoice and that puts that money into a current asset accout. Then when the project is complete we create another invoice with the item code HB PO (holdback pay out) which deducts that money from the current asset account and posts it in accounts receivable.

We pull a report monthly to see if we missed anyone that we could invoice. It shows ALL debits & credits and the final balance, not an individual project/customer balance. Our options currently are: filter by name for projects to try to eliminate ones we know were invoiced which takes a long time OR export it to Excel then filter by name then match up credits & debits to elimianate fully invoiced projects. We can't filter by date as projects can last up to 2 years. each name.

How can we manage this system better within QB so that we can quickly easily see who owes money on Holdbacks? We started a separate excel sheet and we just add those invoices there but I'm finding more and more we are working outside of QB and we're trying to centralize as much as possible withine one program.

3 Comments
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Level 15

How can we efficiently track customer holdbacks and payments of holdbacks?

"Currently we use an item code HB which is a 10% deduction on the ivnoice and that puts that money into a current asset accout. Then when the project is complete we create another invoice with the item code HB PO (holdback pay out) which deducts that money from the current asset account and posts it in accounts receivable."

Yes, that is Construction Retention or Retainage. That is Perfect.

"We pull a report monthly to see if we missed anyone that we could invoice. It shows ALL debits & credits and the final balance, not an individual project/customer balance."

You didn't tell us which specific report you are using. You have Two Ways to do this: Item-Based will show the "in and out" such as Item Profit or Job Profitability Summary, filtered on only the HB item, and rows will be customer names.

I prefer this method:
Reports menu > Custom > Custom Transaction Detail. Set it to Total By Name and filter on only the Asset account.

When you see a name has a balance of 0, you Reconcile this account to an Ending Balance of 0, because you are clearing ONLY the transactions from each side for the name(s) that now ends at 0.

Make two versions of this report. One is titled "All Holdback Activity" and Memorize it. Now Filter this report on Cleared Status = No, and retitle this "Current HB Balances By Names" and Memorize this selecting New, not Replace; use this second version to see and manage Outstanding and Over-credited HB.
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Level 5

How can we efficiently track customer holdbacks and payments of holdbacks?

Hi another option I can suggest you is Receive Payment for an Invoice as partial payment of 90% so balance 10% is receivable and can generate many types of Reports as you need to follow up later.

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Level 7

How can we efficiently track customer holdbacks and payments of holdbacks?