How should I enter retention in a progress invoice so that I can bill for it later?

"However it then shows up as paid and a credit.  And then I can't invoice it. "

Go to your No Company Open Screen. Bottom right is Sample File = "product-based" is Rock Castle Construction. They have Retainage for customers on the items list. Look at how it has been used.

Vendor retainage is an Other Charge item linked to your Liability account. Customer retainage is an Other Charge item linked to your Other current Asset account.

Both of these are used with Gross Billing, and then put in negatives to show a holdback. That same item is what you Invoice or charge the customer later, or pay the vendor (sub), later.

If you are seeing something as "paid and a credit" you likely linked it to Banking or made it a Payment item, in error.

So I set my retainage up this way and it is working, but now it is time to bill it. How do I do that? 

Good evening, @KimLineweber. I'm here to help you move forward in the process.

Here's how to create a bill in QuickBooks:

1. On the Home page, then Enter Bills.
2. Select the vendor.
3. Choose the date.
   • Note: Bill Due Date is automatically populated based on your Bill Preference (Edit > Preference > Bills > Company Preferences).
4. Pick the appropriate tab.
   • Expense: if you're recording a bill for expenses incurred by the business. (ex. Utilities, Rent, Phone/Cable Services)
   • Items: if you're entering a bill for anything that your company buys, sells, or resells in the course of business such as products, shipping and handling charges, discounts, and sales tax (if applicable).
5. Enter the expense account or item, as well as the amount.
6. If you're tracking billable expenses, select the customer job and put a checkmark in the Billable column.
7. Hit Save & Close.

That's all there is to it! Here's an article that provides more information on Entering Bills.

If you have any more questions, don't hesitate to ask. I'm always here to lend a helping hand. Have a beautiful day.

https://www.quick-training.com/retention/