What is retention/holdback?
Most commonly seen on commercial projects, retention is when the client holds back on paying a percentage of the contract value until after the completion of the job. This is generally done to cover defects and any issues that arise within the first months/year of a project. The builder can invoice for these held amounts, usually as a percentage, at milestones. For example, 50% of the retention could be claimed back six months after completion, and a further 50% after a year. The terms/percents/timeframes are based on the contract between the builder and client.
Note: depending on where you are, this concept may be called either retention or holdback. Contract price may also be referred to as fixed price. For the purposes of this article, we'll refer to retention and contract price.
How do I include retention on my contract-price and completion percent invoices?
The following steps show how to set up retention on your contract price and completion percent invoices when you convert an estimate to a job:
Navigate to Estimates in the left-hand menu.
Select the estimate that you are looking to create a job from.
3. Click on Create job.
4. Choose your invoice type from the drop-down menu.
5. Check the box that allows you to calculate retention.
6. Choose whether you want to exclude or include variations.
Buildxact can run contract price and completion percent invoice jobs in three ways:
With no retention held
Retention held based on the contract figure excluding variations amounts
Retention held based on the contract figure including variations amounts