SALES RETAINAGE (HOLDBACKS) SETUP AND PROCESSING

Open the link to review the Sales Retainage Data Migration process.

Configure General Posting Setup

Sales accounts need to be input into the General Posting Setup (highlighted). Depending on what you sell, you can choose a dedicated account. In our example, the builder is selling houses using GL account 30100, and other revenue will be recorded in 30200.

Customer Posting Groups must have a Retainage Control Account specified:  

Generating a Sales Invoice with Retainage Lines

• To Generate a Sales Invoice with Retainage Lines, search Sales Invoices, pick a Customer, and complete the invoice. In the example below, you sell 1 Item of value 1000 with 13% HST. You setup retainage at 10%.

• Now go to Process and select the Create Retainage Lines Action Button. The system is going to create a Retainage Line:

• The GL Posting Preview is as follows:

The full 1,000 amount is accounted for as revenue in the GL Account 30200.

12010 is the AR- Holdbacks/Retainage account showing 10% x 1000 = 100

23050 is the HST Collected account, that has the full 1000x 13%= 130 as a Credit and 100 (Retainage) x 13%= 13 as a Debit.

Regular AR account – 12000- shows $1017, which is:

• 1000-10% Retainage is 900
• HST is: 13% x1000 =130
• Subtract HST that will be part of the Retainage: 10% x130=13
• Finally: 900+130-13=1017

To view Customer Ledger Entries, on the Customer Card, go to Customer then Ledger Entries.

• Retainage Values are displayed on the Customer Ledger Entry. To view Customer Retainage Entries, on the Customer Card, go to Process and click on Customer Retainage Entries:

• When the time comes, search Release Sales Retainage, select the lines you want to release, and hit Release Selected Invoices:

• There are options in the Release popup which work as follows:
  • Release Method:
    • "For Each Invoice" - one Sales Invoice will be posted for each Retainage Entry.
    • "Group by Customer" - one invoice per customer with one sales line for each Retainage Entry that you select prior to processing the release (note that you will not see the "Project No." on the Retainage Ledger if you make this selection)
  • Set Posting Date From:
    • Defaults to the Retainage Due Date with an override if you select "Entered Value" and fill in the date on the next field.
  • Don't Release Posting Invoices:
    • Defaults to posting however you can choose to have the system create an unposted Sales Invoice which you can modify. Note that we strongly recommend against changing the values as partial applications are not setup in Retainage. The value of this option is to do things like change Dimension, address etc.
• The default Action will produce a posted Sales Invoice. This will result in a new posted Sales Invoice visible in Customer Ledger Entries:

• The $100 retainage amount disappeared from the original line.