You use this program to add the retention information against the job(s) and sales order(s) that are created when confirming a quotation linked to a contract. (see Quotation Confirmation).
This program is also run from the Billing Schedule Review program, enabling you to apply part or all of the retention amount to a billing schedule.
A retention is the amount (or percentage) of the contract that the customer withholds for a prescribed period of time after the completion of the contract work.
- Projects and Contracts Retention Creation
- Projects and Contracts Apply Retention Amount
- GL Integration
- Notes and warnings
It is not necessary to create a quotation in order to apply retentions to a contract. Retentions can be applied at the time of creating the jobs linked to the contract.
| Field | Description |
|---|---|
| Retention Information | |
| Contract | This displays the contract to which the retention refers. |
| Job | This displays the job to which the retention is linked. |
| Selling price | This displays the selling price of the job. |
| Customer | This displays the customer defined against the contract. |
| Retention amount |
This indicates the retention amount for the contract. This field is only enabled if you defined the retention as being a value of the selling price against the contract (see Browse on Contracts). |
| Retention percentage |
This indicates the percentage of the selling price which is used to calculate the retention amount. This defaults to the retention percentage entered against the contract (see Browse on Contracts), but can be changed. This field is only enabled if you defined the retention as being a percentage of the selling price against the contract. |
| Retention customer |
Enter the customer who is withholding the retention amount. This field defaults to the customer code entered against the contract, but can be changed. |
| Product class |
Enter a valid product class for the retention. The product class defines the General Ledger accounts to which the retention amount is distributed. A valid product class must be entered. Product classes are defined using the Browse on Product Classes program. |
| Tax codes | |
| Taxable |
Select this if the retention amount is subject to tax. This field is not enabled if the customer is defined as Non taxable (Browse on Customers -Tax tab). |
| Tax code |
Enter the tax code applicable to the retention amount. This field is only enabled if you selected the Taxable option. Tax codes are defined using the Browse on Tax Codes program. |
| GST taxable |
Select this if the retention amount is subject to General Sales Tax. This option is only displayed if you selected the setup option: Canadian GST required (Tax Options -General tab). This field is not enabled if the customer is defined as Non taxable (Browse on Customers -Tax tab). |
| GST code |
Enter the GST tax code applicable to the retention amount. Tax codes are defined using the Browse on Tax Codes program. |
| Accept |
Select this to accept the retention information you entered. A miscellaneous sales order line is created for the retention when the sales order is created by Part Billings program. |
| Cancel | Select this to ignore any information you entered. |
This screen is displayed when you use the Billing Schedule Review program to post a billing schedule or you use the Part Billings program if you have not created schedules. It enables you to apply all or part of the retention amount to the current billing schedule.
The retention amount you apply is added to the sales order as a negative miscellaneous sales order line.
This screen is only displayed if you selected the option: Prompt per schedule against the Retention method (see Browse on Contracts).
If you selected the option: Apply full retention at job completion against the Retention method (Browse on Contracts), then a single retention schedule is automatically created on the estimated date of completion of the contract.
| Field | Description |
|---|---|
| Retention Information | These fields are displayed for information purposes only, and cannot be changed using this program: |
| Contract | This displays the contract to which the retention applies. |
| Retention amount | This displays the retention amount defined for the contract. |
| Retention remaining | This displays the retention amount which has not yet been offset against a billing. |
| Schedule amount | This displays the amount to be billed for the current schedule. |
| Job | This displays the job within the contract to which the retention applies. |
| Product class | This displays the product class defined for the retention amount. |
| Customer | This displays the customer defined against the contract and the job. |
| Retention customer | This displays the customer defined against the retention. This may or may not be the same customer defined against the contract. |
| Amount to apply |
Enter the amount of the retention you want to use to offset against this schedule. The amount you enter in this field will reduce the value in the Retention remaining field when next you use the Projects and Contracts Retention Creation program. You will be unable to enter an amount greater than either the billing schedule amount or the Retention remaining amount. This field is only enabled if you defined the retention as being a value of the selling price against the contract (see Browse on Contracts). |
| Percentage to apply |
Enter the percentage of the retention you want to use to offset against this schedule. This field is only enabled if you defined the retention as being a percentage of the selling price against the contract (see Browse on Contracts). |
| Comment | Enter a comment applicable to the application of the retention amount to this billing schedule. |
| Apply | Select this to apply the retention value/percentage entered against this billing schedule. |
| Cancel | Select this to exit the program without applying any retention amount/percentage to this billing schedule. |
For the transactions relating to the retention to automatically be recorded in the General Ledger, you need to define a product class for project and contact retentions (see AR Sales Ledger Interface). The ledger account defined against this product class would typically be an asset account.
![[Note]](images/note.png)
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Product classes cannot be defined only at branch level if you want Projects and Contracts to integrate to the General Ledger. |
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When you use the Part Billings program, if you defined the Retention method as Prompt per schedule (Browse on Contracts), then you are prompted to enter the retention value or percentage applicable to the amount being part billed.
When you use the Sales Order Entry program to invoice the schedule, a sales order line for the full part billing quantity and amount is created and a negative miscellaneous sales order line is created for the retention amount.
- If the option: Create GL journal is not selected for Accounts Receivable (General Ledger Integration), then run the AR Invoice GL Integration program to create the General Ledger journal for transaction.
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If the option: Post GL journal is not selected for Accounts Receivable (General Ledger Integration), then use the GL Journal Entry program to post the journal into the General Ledger.
- The Debtor's control account in the General ledger is debited with the part billing amount less the retention amount.
- The ledger code defined against the product class for project and contract retentions is debited with the retention amount.
- The Sales/Revenue account is credited with the full billing amount.
For example:
You create a contract with a retention percentage of 10% against each billing schedule.
You part bill the customer for 50 000.
Debtors control Dr 45 000 (50 000 less 10% retention of 5 000)
Retentions Dr 5 000 (being the retention value calculated)
Sales Cr 50 000 (being the full amount part billed)
When the retention amount becomes due (according to the terms code defined against the retention), the customer is invoiced for the retention amount and the following entries are processed:
Debtors control Dr 5 000 (the retention amount)
Retentions Cr 5 000
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The Projects and Contracts Retention Creation screen is only displayed at the time of confirming a quotation and creating jobs for a contract if you selected the option:Prompt per schedule (Browse on Contracts - Retentions).
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Once a retention is created against a contract/job, the retention information cannot be changed.
Process a retention
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Against the contract, you indicate that a retention is required and you enter the retention details (see Browse on Contracts).
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Use the Quotation Entry program to create a hierarchical quotation for the contract.
The quotation must be linked to the contract.
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Use the Quotation Confirmation program to confirm the quotation.
Ensure that you select to create a sales order, to create schedules and to create retentions.
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If you defined the Retention method as Prompt per schedule (Browse on Contracts), then the Quotation Confirmation program calls the Projects and Contracts Retention Creation program enabling you to enter the retention details.
If you defined the Retention method as Calculate % per schedule, then when you use the Billing Schedule Review program to bill the customer, the retention amount is automatically calculated according to the percentage you entered against the contract.
If you defined the Retention method as Apply full retention at job completion, then one final retention schedule due on the estimated date of completion of the contract is created automatically.