AR Retainage Adjustment Cases

In this topic, you will read about the cases when you may need to adjust retainage amounts, correct released retainage, and revert incorrect retainage documents. The following sections describe each case, the actions that should be taken, and the resulting documents that will be generated in the system.

1. Retainage Amount Should be Increased

Suppose that a $1,000 AR invoice (original invoice) has been released. The retained amount is $100 and the invoice amount is $900. The retainage has not been released, that is, no retainage document has been created. This invoice should be corrected as follows: the invoice amount should be decreased to $850, the retainage amount should be increased to $150, and the total amount is the same ($1,000).

Actions to Be Taken

To increase the retainage amount, you perform the following general instructions:

  1. On the Invoices and Memos (AR301000) form, you reverse the original invoice by clicking Reverse and Apply to Memo on the More menu.
  2. On the same form, you create a new invoice specifying the correct retainage amount ($150). For details, see To Enter an Invoice with Retainage (with Items' Quantities and Unit Costs) and To Enter an Invoice with Retainage (with Line Totals).

Result

After you have performed the instructions, the system will generate the following documents:

  • A credit memo that reverses the original invoice. This document has the following settings on the Invoices and Memos form:
    • Apply Retainage: Selected
    • Detail Total: 1000
    • Retained Amount: 100
    • Amount: 900
    • Balance: 0
    • Original Document (Financial tab): The reference number of the original invoice
    • Applications tab: The original invoice with retainage
  • An invoice with the increased retainage amount. This document has the following settings on the Invoices and Memos form:
    • Apply Retainage: Selected
    • Detail Total: 1000
    • Retained Amount: 150
    • Amount: 850
    • Balance: 850
    • Original Retainage (Retainage tab): 150
    • Unpaid Retainage: (Retainage tab): 150

2. Retainage Amount Should be Decreased

Suppose that a $1,000 AR invoice (original invoice) has been released. The retained amount is $100 and the invoice amount is $900. The retainage has not been released, that is, no retainage document has been created. This invoice should be corrected as follows: the invoice amount should be increased to $950, the retainage amount should be decreased to $50, and the total amount is the same ($1,000).

Actions to Be Taken

To decrease the retainage amount, you perform the following general instructions:

  1. On the Invoices and Memos (AR301000) form, you reverse the original invoice by clicking Reverse and Apply to Memo on the More menu.
  2. On the same form, you create a new invoice specifying the correct retainage amount ($50). For details, see To Enter an Invoice with Retainage (with Items' Quantities and Unit Costs) and To Enter an Invoice with Retainage (with Line Totals).

Result

After you have performed the instructions, the system will generate the following documents:

  • A credit memo that reverses the original invoice. This document has the following settings on the Invoices and Memos form:
    • Apply Retainage: Selected
    • Detail Total: 1000
    • Retained Amount: 100
    • Amount: 900
    • Balance: 0
    • Original Document (Financial tab): The reference number of the original invoice
    • Applications tab: The original invoice with retainage
  • An invoice with the decreased retainage amount. This document has the following settings on the Invoices and Memos form:
    • Apply Retainage: Selected
    • Detail Total: 1000
    • Retained Amount: 50
    • Amount: 950
    • Balance: 950
    • Original Retainage (Retainage tab): 50
    • Unpaid Retainage: (Retainage tab): 50

3. Retainage Amount Should be Adjusted for an Unreleased Retainage Invoice

Suppose that an original invoice has been created correctly but you have released a greater or lower retainage amount. In other words, you released the retainage on the Release AR Retainage (AR510000) form and the system created a retainage document on the Invoices and Memos (AR301000) form. This retainage document has an incorrect amount, but it has not yet been released.

Actions to Be Taken

To adjust the retainage amount, you perform the following general instructions:

  1. On the Invoices and Memos form, you find the retainage document with the incorrect amount.
  2. You delete the document by clicking Delete on the form toolbar and clicking OK in the displayed dialog box.

Result

Because the retainage document has not been released yet, the Unreleased Retainage box on the Retainage tab of the Invoices and Memos form remains unchanged for the original invoice.

4. Retainage Amount Should be Increased for a Released Retainage Invoice

Suppose that a $1,000 AR invoice (original invoice) has been released. The retained amount is $100 and the invoice amount is $900. The retainage document has been released but its amount is $90.

Actions to Be Taken

To release the correct retainage amount, you perform the following general instructions (scenario 1):

  1. On the Invoices and Memos (AR301000) form, you reverse the incorrect retainage document of $90 by clicking Reverse and Apply to Memo on the More menu.
  2. On the Release AR Retainage (AR510000) form, you release the correct retainage amount of $100. For details, see To Create a Retainage Document (Release Retainage).

Alternatively, you can perform the following steps (scenario 2):

  1. On the Release AR Retainage form, you find the original invoice with the unreleased retainage of $10.
  2. You release this retainage by selecting the line for the document and clicking Process on the form toolbar. For details, see To Create a Retainage Document (Release Retainage).

Result

If you have performed scenario 1, the system will generate the following documents:

  • A credit memo of $90 that reverses the original retainage invoice. This document has the following settings on the Invoices and Memos form:
    • Retainage Document: Selected
    • Detail Total: 90
    • Amount: 90
    • Balance: 0
    • Original Document (Financial tab): The reference number of the original retainage invoice
  • A retainage invoice with the correct retainage amount of $100. This document has the following settings on the Invoices and Memos form:
    • Retainage Document: Selected
    • Detail Total: 100
    • Amount: 100
    • Balance: 100
    • Original Document (Financial tab): The reference number of the original invoice with retainage

If you have performed scenario 2, the system will generate the following documents:

  • A retainage invoice with the incorrect retainage amount of $90. This document remains unchanged in the system. This document has the following settings on the Invoices and Memos form:
    • Retainage Document: Selected
    • Detail Total: 90
    • Amount: 90
    • Balance: 90
    • Original Document (Financial tab): The reference number of the original invoice with retainage
  • A retainage invoice with the amount of $10. This document is generated in addition to the $90 retainage invoice. This document has the following settings on the Invoices and Memos form:
    • Retainage Document: Selected
    • Detail Total: 10
    • Amount: 10
    • Balance: 10
    • Original Document (Financial tab): The reference number of the original invoice with retainage

5. Retainage Amount Should be Decreased for a Released Retainage Invoice

Suppose that a $1,000 AR invoice (original invoice) has been released. The retained amount is $100 and the invoice amount is $900. You needed to release $30 of the retainage, but you released $60 by mistake. The 60$ retainage invoice has also been released.

Actions to Be Taken

To correct the released retainage amount, you perform the following general instructions:

  1. On the Invoices and Memos (AR301000) form, you reverse the incorrect retainage document of $60 by clicking Reverse and Apply to Memo on the More menu.
  2. On the Release AR Retainage (AP510000) form, you release the correct retainage amount of $30. For details, see To Create a Retainage Document (Release Retainage).

Result

After you have performed the instructions, the system will generate the following documents:

  • A credit memo of $60 that reverses the original retainage invoice. This document has the following settings on the Invoices and Memos form:
    • Retainage Document: Selected
    • Detail Total: 60
    • Amount: 60
    • Balance: 0
    • Original Document (Financial tab): The reference number of the original retainage invoice
    • Applications tab: The original retainage invoice of $60
  • A retainage invoice with the correct retainage amount of $30. This document has the following settings on the Invoices and Memos form:
    • Retainage Document: Selected
    • Detail Total: 30
    • Amount: 30
    • Balance: 30
    • Original Document (Financial tab): The reference number of the original invoice with retainage

6. The Retainage is Released for the Wrong Invoice but the Retainage Document Has Not Been Released

Suppose that a $1,200 AR invoice (original invoice) has been released. The retained amount is $100 and the invoice amount is $1,100. You released the retained amount of $100, but the retainage document is still in the On Hold status. After you generated the retainage document, you realized that you released retainage for the wrong invoice.

Actions to Be Taken

To correct the mistake and release retainage for the correct invoice, you perform the following general instructions:

  1. On the Invoices and Memos (AR301000) form, you find the incorrect retainage document with the On Hold status.
  2. You delete the document by clicking Delete on the form toolbar and clicking OK in the displayed dialog box.
  3. On the Release AR Retainage (AR510000) form, you release the retainage for the correct invoice. For details, see To Create a Retainage Document (Release Retainage).

Result

Because the retainage document has not been released yet, the Unreleased Retainage box on the Retainage tab of the Invoices and Memos form remains unchanged for the original invoice.

7. The Retainage is Released for the Wrong Invoice and the Retainage Document Has Been Released

Suppose that a $1,200 AR invoice (original invoice) has been released. The retained amount is $100 and the invoice amount is $1,100. You released the retained amount of $100 and released the generated $100 retainage document. After you released the retainage document, you realized that you released retainage for the wrong invoice.

Actions to Be Taken

To correct the mistake and release retainage for the correct invoice, you perform the following general instructions:

  1. On the Invoices and Memos (AR301000) form, you reverse the incorrect retainage document of $100 by clicking Reverse and Apply to Memo on the More menu.
  2. On the Release AR Retainage (AR510000) form, you release retainage for the correct invoice. For details, see To Create a Retainage Document (Release Retainage).

Result

After you have performed the instructions, the system will generate the following documents:

  • A credit memo of $100 that reverses the wrong retainage invoice. This document has the following settings on the Invoices and Memos form:
    • Retainage Document: Selected
    • Detail Total: 100
    • Amount: 100
    • Balance: 0
    • Original Document (Financial tab): The reference number of the original retainage invoice
    • Applications tab: The original retainage invoice of $100
  • A $100 retainage invoice for the correct original invoice. This document has the following settings on the Invoices and Memos form:
    • Retainage Document: Selected
    • Detail Total: 100
    • Amount: 100
    • Balance: 100
    • Original Document (Financial tab): The reference number of the correct original invoice with retainage

8. Unreleased Retainage Should be Written Off

Suppose that a $1,000 AR invoice (original invoice) has been released. The retained amount is $100 and the invoice amount is $900. You released the retained amount of $100 and released the retainage document. Later you found out that the $100 retainage will never be paid and must be written off.

Actions to Be Taken

To write off the retainage document, you perform the following general instructions:

  1. On the Financial tab of the Customers (AR303000) form, you adjust the write-off limit of the customer by specifying 100 in the Write-Off Limit box.
  2. On the Invoices and Memos (AR301000) form, you find the retainage document of $100 that must be written off.
  3. On the More menu, you click Write Off.
  4. On the Write Off Balances and Credits (AR505000) form, which is opened, you click Process. For details, see Direct Write-Offs: To Process a Balance Write-Off.

Result

After you have performed the instructions, the system will close the $100 retainage invoice. The invoice will have the following settings on the Invoices and Memos form:

  • Retainage Document: Selected
  • Detail Total: 100
  • Amount: 100
  • Balance: 0
  • Original Document (Financial tab): The reference number of the original invoice with retainage
  • Applications tab: A document with the Balance WO type and the Amount Paid of $100