Subcontract Retention
Retentions allows you to set up a retention percentage on subcontracts to withhold a portion of the amount you pay subcontractors on their invoices until the contract is satisfactorily completed.
When you set up a subcontract, you specify the Retention Method on the line item. Options are:
None - no retention will be withheld or calculated
Total = calculate retention total by percent
Use Percent to enter a percent value which specifies the percentage of the line subcontract item amount to be retained when entering payment requests for the current subcontract.
Setting up subcontract retention
- On a subcontract: Navigate to the Role Center > Subcontract > Subcontracts and select a subcontract. In the Subcontracts fast tab, select a line and scroll to the Retention Method. Set the value to Total and then enter a percentage to retain for retention percent. The percent you enter in this field specifies the percentage to withhold from a payment amount on a subcontract purchase invoice. The retained amounts are accumulated in a Retainage account until you use Subcontract Retention to generate a final invoice and create a new Purchase Invoice to pay the retained amounts to the subcontractor.
Create a payment with subcontract retention
If a subcontract includes a retention percentage (as mentioned in the previous section), when you use Subcontract Payment Requests to create a payment request, it will automatically deduct the retention percentage specified from the amount requested in Subcontract Payment Requests.
When completing the Payment Request Details in Subcontract Payment Request, the percent entered in the Retention field is automatically deducted from the Requested Amount, thereby reducing the Net Pay Amount.
Note
For example, in the Payment Request Details fast tab, if the Requested Amount = $100.00 and the Retention is set to 25%, the Net Pay Amount will be $75.00.