Applying Accounts Payable Retention


When an invoice with retention is entered, the net invoice amount (invoice balance minus retention) is credited to the Accounts Payable account, and the retention amount is credited to the Retention Payable account. If an invoice is distributed to more than one cost code or cost type entry, you must enter the amount to apply to each distribution entry when making partial payments.

You must select the Retention Payable account to use in A/P Division Maintenance. If you do not want to post retention amounts separately, use the same general ledger account for both the Accounts Payable and Retention Payable accounts.

When an invoice is paid, it is assumed that the Accounts Payable balance is paid before any payment is applied to the retention balance. Any partial payment that does not fully pay the invoice is first applied against the Accounts Payable account until the invoice balance is equal to the retention amount. Any additional payment is applied to the Retention Payable account.

For more information, see:

A/P Division Maintenance

Pay Retention Balance with Job Cost Distribution