AP Bills with Retainage: Configuration of the Default Retainage Settings

In this topic, you will read about how to specify the accounts payable settings related to retainage, set up classes for vendors that retain amounts on bills, and configure particular vendors (and vendor locations) that retain amounts on bills.

General AP Retainage Settings

In the Retainage Settings section on the General Settings tab of the Accounts Payable Preferences (AP101000) form, you select the Automatically Release Retainage Documents check box to direct the system to automatically release the retainage documents created on the Release AP Retainage (AP510000) form.

To affect the generation of retainage documents on the Release AP Retainage form, in the Data Entry Settings section on the General tab of the Accounts Payable Preferences form, you can specify the state of the Hold Documents on Entry check box as follows:

  • Clear this check box to direct the system to automatically remove retainage bills from hold as soon as they are created. With this check box cleared, retainage bills will be assigned the Pending Approval status if approvals are set up in your system for the Bill document type, or the Balanced status if approvals are not used.
  • Select this check box to direct the system to generate retainage bills with the On Hold status, whether or not approvals are set up.

Retainage Settings of Customers

For each vendor for which your company needs to retain a certain amount of each bill's total, you can specify default settings as follows on the Financial tab (Retainage Settings section) of the Vendors (AP303000) form:

  • If your company usually retains an amount on the bills of the selected vendor, you select the Apply Retainage check box. If this check box is selected, the Apply Retainage check box is selected by default for each bill of the vendor in the Summary area of the Bills and Adjustments (AP301000) form.
  • If the Apply Retainage check box is selected for the vendor, to specify the default percent to be retained from the amount of the bill document lines of the vendor, you specify the percent in the Retainage Percent box. For a bill of the vendor, the system enters this percent in the Default Retainage Percent box on the Retainage tab on the Bills and Adjustments form, and this percent is applied by default to all lines on the Details tab.
  • If you want to apply payments to individual lines of AP bills with retainage for the selected vendor, you can select the Pay by Line check box ion the Payment tab (Default Payment Settings section) of the Vendors form. The state of the check box for the vendor is copied to the bills of the vendor but can be overridden.

You can specify the default retainage receivable account and subaccount (if applicable) for a vendor in the Retainage Receivable Account and Retainage Receivable Sub. boxes on the GL Accounts tab of the Vendors form. The account and subaccount you specify will be used to record the amount that your company retains from the vendor bills.

Retainage of Taxes

To retain the taxes calculated on retained amounts, you select the Retain Taxes check box on the Accounts Payable Preferences (AP101000) form. With this check box selected, the system calculates and reports the taxes of the bills with retainage and the retainage bills separately. Then you need to specify the account and subaccount to be used for posting retainage tax amounts in the Retainage Tax Claimable Account and Retainage Tax Claimable Subaccount boxes on the GL Accounts tab of the Taxes (TX205000) form for each applicable tax code.