We are a UK LTD company working in the construction industry.
Some contractors we invoice keep a retention amount until the job is completed which we then have to apply to be released at a later date... is it possible to show this amount on an invoice as it is issued or as payment is made? or possibly to issue an invoice at a later date solely to release the retention?
Solved! Go to Solution.
Hi acousticceilings!
I’ve got the steps to help you add a retention amount on your invoices. And yes, it’s possible to show the amount when you issue them. I’m glad to show you how.
Setting up retainage tracking:
a. Click the Gear icon.
b. From the drop-down menu, select Chart of Accounts.
c. In the Chart of Accounts, click New.
d. For Category Type, select Other Current Assets.
e. For Detail Type, select Retainage.
f. For the Name, enter Retainage Receivable.
g. Click Save.
a. Click the Gear icon.
b. From the drop-down menu within the Lists section, select Products and Services.
c. In the Products and Services window, click New.
d. Enter a Name for the item (i.e. Retainage).
e. Under Sales Information, place a check-mark next to I sell this product/service to my customers.
f. Select the Retainage Receivable account from the Income Account drop-down.
g. Click Save.
Withholding retainage from an invoice:
In case you need a report in the future, you can follow these steps:
You can save this report, so you won't have to do a lot of customisation when you need it in the future. For instructions, you can refer to the Memorised Reports article.
Feel free to come back here if you need anything else. Thanks!
Hi acousticceilings!
I’ve got the steps to help you add a retention amount on your invoices. And yes, it’s possible to show the amount when you issue them. I’m glad to show you how.
Setting up retainage tracking:
a. Click the Gear icon.
b. From the drop-down menu, select Chart of Accounts.
c. In the Chart of Accounts, click New.
d. For Category Type, select Other Current Assets.
e. For Detail Type, select Retainage.
f. For the Name, enter Retainage Receivable.
g. Click Save.
a. Click the Gear icon.
b. From the drop-down menu within the Lists section, select Products and Services.
c. In the Products and Services window, click New.
d. Enter a Name for the item (i.e. Retainage).
e. Under Sales Information, place a check-mark next to I sell this product/service to my customers.
f. Select the Retainage Receivable account from the Income Account drop-down.
g. Click Save.
Withholding retainage from an invoice:
In case you need a report in the future, you can follow these steps:
You can save this report, so you won't have to do a lot of customisation when you need it in the future. For instructions, you can refer to the Memorised Reports article.
Feel free to come back here if you need anything else. Thanks!
It may be worth noting that before these procedures can be followed, that it is necessary to switch 'discount' to On within the Sales Form Content section, this is in the Sales page in Account & Settings chosen from the Gear Icon
What do you do when it is time to receive payment for the retainage? It is sitting in the "other asset" but has not really been billed since the invoice total is lowered by the negative amount entered. Thanks.
Hi, kg2020.
To change the posting account of the retainage, you can create a Sales Receipt or apply it to an open invoice.
Below are the steps to complete the process:
For detailed information and additional recommended steps (proceed to Step 4), check out this article: Record a retainer or deposit.
Also, I'm including this article for your other reference: How to view Retained Earnings account details.
I appreciate your time today. Please know that I've got your back if you need help with QuickBooks.
Should you choose a "class" for retainage? I've been using revenue, but that can't be correct, any help would be appreciated.
How do I receive the retainage when the customer pays it. How come the retainage does not show up in the customers account as money owed?
Hello there, @Mary102.
You'd want to create a retainage payable account on your Chart of Accounts. Let me show you how:
Once completed, you can create a retainer service item. You can use it in creating a sales receipt or an invoice to record the amount you've received from your customers. Here's:
You can read through this article for more detailed steps: Record a retainer or deposit.
Leave a comment below if you have other questions or concerns about tracking your income and expense transactions. I'm always here to help.