Receivable
and Payable Retainage
Applying
Invoice Retainage Setup
Account
Histories and Managers
Both A/R and A/P invoices now allow retainage withholding and billing. The processes are similar for both A/R and A/P invoices. It involves invoice retainage setup and individual modification of line item retainage. To use retainage, you must first specify your default receivables and payables retainage accounts in General Ledger Setup.
When posting invoices with retained sales and/or retainage billing, the A/P or A/R retainage default accounts are used as described below.
The following is an example of three line items on an invoice set up with 25% retainage withheld. The first two line items have retainage withholding enabled. The last item does not.
|
Description |
Sale |
Amount
Retained |
|
Equipment Installation |
$500 |
$125 |
|
Equipment Repair |
$200 |
$50 |
|
Shipping |
$50 |
|
Posting would take place as follows:
|
Description/Account |
Dr |
Cr |
|
(Sales) |
|
$500 |
|
(Sales) |
|
$200 |
|
(Sales) |
|
$50 |
|
Default Retainage Receivable |
$175 |
|
|
Accounts Receivable |
$575 |
|
The following is an example of one retained billing line item on an invoice.
|
Description |
Sale |
Retainage
Billed |
|
Retainage for Job#100001 |
|
$175 |
Posting would take place as follows:
|
Description/Account |
Dr |
Cr |
|
Default Retainage Receivable |
|
$175 |
|
Accounts Receivable |
$175 |
|
The following is an example of three line items on an invoice set up with 25% retainage withheld. The first two line items have retainage withholding enabled. The last item does not.
|
Description |
Expense |
Amount
Retained |
|
Subcontracting |
$500 |
$125 |
|
Parts |
$200 |
$50 |
|
Shipping |
$50 |
|
Posting would take place as follows:
|
Description/Account |
Dr |
Cr |
|
(Expense) |
$500 |
|
|
(Expense) |
$200 |
|
|
(Expense) |
$50 |
|
|
Default Retainage Payable |
|
$175 |
|
Accounts Payable |
|
$575 |
The following is an example of one retained billing line item on an invoice.
|
Description |
Sale |
Retainage
Billed |
|
Retainage for Job#100001 |
|
$175 |
Posting would take place as follows:
|
Description/Account |
Dr |
Cr |
|
Default Retainage Payable |
$175 |
|
|
Accounts Payable |
|
$175 |
Before you can retain sales for line items on the invoice, you must first configure the invoices retainage via the invoice retainage setup form. Bill for previously retained sales is also configured using the invoice retainage setup form.
Right-click on the invoice and select ‘Invoice Retainage Setup’. The invoice retainage form has two sections. Make your selections in each section based upon the retainage configuration desired for the invoice.
This section will allow you to configure how sales are to be retained on the invoices line items:
· No Retainage—select this to clear all retainage from the invoice.
· Manual Retainage—select this to allow manual retainage indicated by a dollar amount per line item.
· Retain Percent of Sale—select this to retain a percentage of the sale for each item on the invoice and enter the percentage amount.
RETAINED BALANCE: The retained balance is the total withheld retainage on invoices for the job less the retained billed for line items on the job. Once sales are retained, they become part of the jobs retained balance and can be billed on future invoices.
Billing of previously retained sales occurs by adding retainage billing line items to the invoice. When you select this section of the invoice retainage form:
· For A/R invoices, the balance of previously retained sales (not yet invoiced) is listed for the job (or each phase/job of the project for managed projects).
· For A/P invoices, if a job has been identified on the invoice, the balance will be displayed. You can also enter a job number to add retainage billing from more than one job to the invoice.
Once the retainage balance is identified, check the “Add/update retainage billing items”.
NOTE: On A/P invoices you cannot split line items with retained sales or retainage billing items. In addition, you cannot retain sales on split line items.
After making your selections for ‘Sales Retained’ and/or ‘Retained Billing’, click ‘OK’ to apply the Invoice Retainage Setup.
The sales retained setting you selected will be applied to the invoice.
If you selected “Add/update retainage billing items”, retainage billing line items will be modified or added to the invoice for the job identified. These line items will have no sale amount, only a retainage-billed amount. This amount can be modified for each line item, but cannot exceed the retained balance for the Job identified. These items will have an item number of “<RTGE>” and a sale or expense type of “<RTGE>”.
POSTING: Retained billing items do not have a sale amount and do not post to sales. They are credited to the default retainage account.
Line item retainage cannot be accessed unless retainage is either billed on the line item, or the invoice has been set up to withhold sales by a percentage or manually. To modify either the sale amount retained, or the retainage billed right-click on the line item and select “Line Item Retainage”.
For sale items on the invoice, you can either
· Modify the dollar amount of sale withheld or retained (if the invoice is set up for manual retainage). The retained amount cannot exceed the sale amount.
· Enable or disable the percentage of sale retained (if the invoice is set up to retain a percentage of sale).
Retainage cannot be withheld from items if the invoice is not set up for sales retainage.
For retainage billing line items, you can modify the amount of retainage billed on the line item. The amount of retained billed cannot exceed the retained balance for the job.
NOTE: Retained billing line items will not appear on the invoice when printed. Only the total retainage billed will be displayed as part of the invoice subtotal and total. The individual line items are required to association the retainage billed with the particular job and in this way SuccessWare can calculate the balance of sale retained for a particular job.
When aging account for both receivables and payables, the retained balance for an account is also calculated and summarized on the account. You can find this figure in the both the Billing Account History form and the Vendor Account History Form displayed in the top center of the form below the Account Balance. If the retained balance is zero, no figure will be displayed. These figures in the account history forms contain ‘mouse-over hints’. This means if you move the mouse over the figures, hints popup describing the item.
The retained balance has also been added as a column to the account views in both the receivable and payable managers.