If the Accounts Payable module is integrated with Job Cost, you can select a portion of an invoice amount as retention to withhold from automatic payment. Retention is important for general contractors that subcontract portions of their jobs and withhold full payment of invoices received until the completion of the job.
The retention amount is calculated and recorded for each job number, cost code and/or cost type distribution entered for an invoice. You can track separate retention for invoices costed to multiple jobs.
The retention balance is tracked for each invoice until the invoice is fully paid. The Accounts Payable Aged Invoice Report, Cash Requirements Report, Trial Balance Report, and Open Invoice by Job Report list the retention balance, which is included in the invoice balance.
If you use a standard retention rate for a vendor for all jobs, you can enter the rate to use in Vendor Maintenance; this rate applies only to Subcontract cost types. You can leave the retention rate as zero if you do not use retention or if you are entering jobs for vendors that do not perform subcontract work.
Accounts Payable retention can be calculated automatically in Accounts Payable Invoice Data Entry using the retention rate entered for the vendor in Vendor Maintenance or in Job Masterfile Maintenance. You can override the calculated retention during invoice data entry.
When an Accounts Payable invoice with job cost distribution is entered in Accounts Payable Invoice Data Entry or Manual Check and Payment Entry, the appropriate general ledger account is debited. The retention amount, if any, is credited to the retention payable account, and the net invoice amount (invoice amount minus retention) is credited to the Accounts Payable account selected for the vendor's division in Accounts Payable Division Maintenance.
For more information, see:
