Hello there, @akraemer.
You can set up your retention in your QuickBook Desktop (QBDT) account so the retention is automatically applied when necessary. By doing this, the retention then remains as an asset until it's paid in full.
To set up a retention account so you can save time and the calculations that it requires to figure out retention for each job. Here's what you'll need to do:
- Go to the Lists menu at the top and click Chart of Accounts.
- From the Account ▼dropdown, select New.
- Select an account type, then click Other Current Liability.
- Next to the Retainage Receivable option, enter the percentage of retention you'd like to apply and click OK.
Then, to set up the retention item that will appear in the invoice, see the below steps:
- Go to the Lists menu at the top.
- Select Item List.
- Open a new item by pressing Ctrl+N and then clicking Other Charge.
- Name the charge Retainage Receivable.
- Click the drop-down menu to select the retention amount that you set up.
- Clear the check box beside the reimbursable charge option and click OK.
After that, create a new invoice for a client to whom retention applies. You can now enter the payable amount and then enter the Retention Receivable as of the option on the next line. Doing so, the system will automatically deduct the retention from the amount due for the invoice.
To check what is still outstanding for clients using retention, you can check your retainage receivable report by clicking the Lists menu at the top and then Chart of Accounts. Then, double-click Retainage Receivable.
Additionally, before doing the steps above, I suggest consulting an accountant. Your accountant can help guide you through how to handle this kind of situation.
If you need help with processes and other tasks in QBDT in the future, visit our Community website. It contains helpful information and guides that'll point you in the right direction.
If you have any other questions when using QuickBooks, click the Reply option below. I'll be here to help. Take care always!
