Using Retainage Accounting
Sage ERP Accpac Project and Job Costing supports retainage accounting.
If you use retainage accounting in Accounts Receivable, you can track retainage for contracts, projects, and (depending on the project type and accounting method) project categories in Project and Job Costing.
The pattern for tracking retainage receivable is the same as for revenue calculation. If revenue is calculated at the project level, then retainage is also tracked at the project level. If revenue is calculated for each project category, then retainage is tracked at the category level.
If you use retainage accounting in Accounts Payable, you can track retainage for project categories. Retainage payable is tracked at the category level (the same as the costs with which it is associated).
You select retainage options, as follows:
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You specify a retainage percentage, retention period, and retainage terms for your customers in Accounts Receivable. The retainage rate and retention period you specify in the customer record are used as defaults for projects for that customer. (
Accounts Receivable also lets you specify retainage terms that apply only to retainage documents you process to clear outstanding retainage for a customer. If you do not specify retainage terms in the customer record, the usual customer terms apply to billings you generate for a customer in Project and Job Costing.
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Retainage payable is calculated in Accounts Payable when you process a job-related document in that program.
The Default Retainage From option that you set for a project category determines whether Accounts Payable will use the retainage percentage and retention period from the vendor record or from the category as the default retainage percentage and retention period for an invoice detail that uses the category.
You specify retainage percentages, retention periods, and retainage terms for your vendors in Accounts Payable.
Retainage and the Contract Maintenance Form
When you use retainage accounting in Accounts Payable or Accounts Receivable, additional fields appear on the Contract Maintenance form (and its associated forms) in Project and Job Costing for managing retainage for contracts.
If you use retainage accounting in Accounts Receivable, the Totals tab on the Contract Maintenance form now provides retainage information for the contract in the following new fields:
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The Retainage Receivable field shows the receivable retainage outstanding for the contract. The amount is shown in the source (customer) currency.
The field is updated automatically when you post an original invoice, credit note, debit note, or adjustment that contains a retainage amount in Accounts Receivable. It is also updated when you post a retainage invoice, retainage credit note, or retainage debit note to clear outstanding retainage for the contract in Accounts Receivable. You cannot edit the amount.
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The Retainage Payable is the payable outstanding retainage for the contract. The amount is shown in your functional currency.
The field is updated automatically when you post an original invoice, credit note, debit note, or adjustment that contains a retainage amount in Accounts Payable. It is also updated when you post a retainage invoice, retainage credit note, or retainage debit note to clear outstanding retainage for the contract in Accounts Payable. You cannot edit the amount.
Setting retainage options for projects
You use either the grid on the Projects tab of the Contract Maintenance form or the Project tab of the Project Maintenance form to set options for receivable retainage for a selected project. You use the following fields:
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The program uses the retainage percentage to calculate the retainage amount to be withheld from customer invoices.
The retainage percentage specified in the customer record is used as the default, but you can always change it. (If you do not use retainage accounting in Accounts Receivable, you cannot edit this field.)
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The program uses the retention period to calculate the due date for the retainage document.
The retention period specified in the customer record is used as the default, but you can change it. If you change the retention period, the program recalculates the retainage due date, and vice versa.
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This field displays the current retainage amount outstanding for the project in Accounts Receivable. You cannot edit it.
If you use multicurrency, the amount displayed is in source (customer) currency.
The field is updated when you post an original Accounts Receivable invoice, debit note, or credit note for the project that includes retainage. It also updates the field when you post retainage documents to clear amounts from the Accounts Receivable outstanding retainage control account.
The program also displays retainage receivable and retainage payable for a selected project on the Activity tab of the Project Maintenance form. Receivable amounts are shown in source (customer) currency, while payable amounts are shown in your functional currency.
If you use retainage accounting in Accounts Payable, the detail grid on the Contract Maintenance Project tab and the Project tab on the Project Maintenance form display the following field for a selected project:
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This field displays the current retainage amount outstanding for the project in Accounts Payable. You cannot edit it.
The amount displayed is in your functional currency.
The program updates the field when you post an original Accounts Payable invoice, debit note, or credit note for the project that includes retainage.
Depending on how you report retainage in Accounts Payable, tax on retainage may also be included as a commitment on Project and Job Costing.
If you report tax as per tax authority, and you report tax for the authority when you post a retainage invoice, when you post an original job-related invoice in Accounts Payable, tax you will report later is included as a commitment in Project and Job Costing.
Retainage payable is also updated when you post documents to clear amounts from the Accounts Payable outstanding retainage control account.
Setting retainage payable options for categories
Retainage payable is determined and tracked at the category level. When you enter job-related invoices, debit notes, and credit notes in Accounts Payable, that program calculates retainage for each document detail according to the retainage options you specified for each project category.
A Retainage tab is available on the Category Maintenance form to let you specify retainage defaults for each project category, as follows:
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This field determines whether Accounts Payable will use the retainage options specified for the vendor in Accounts Payable, or for the project category on the contract. You can choose Category or Vendor.
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A/P
Retainage Percentage and A/P Retention Period
If you specify Category in the Default Retainage From field, you can specify the retainage percentage and retention period that will be used as defaults for payable invoice, debit note, and credit note details that use this project category.
The Retainage tab also displays the following fields:
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Depending on the project type and accounting method, retainage receivable for a category can also appear on the Retainage tab of the Category Maintenance form.
The field appears only for the following project types and accounting methods:
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Time and materials projects.
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Cost plus projects that use the billings and costs, category percentage complete, and accrual-basis accounting methods.
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Fixed price projects that use the billings and costs or accrual-basis accounting method.
This field displays the outstanding receivable retainage amount for the project category, and it is updated automatically when you post, in Accounts Receivable, an original invoice, credit note, debit note, or adjustment that includes retainage for these project types and accounting methods.
It is also updated when you post a retainage invoice, credit note, or debit note to clear outstanding retainage receivable. You cannot edit the field.
The amount is displayed in the source (customer) currency.
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This field displays the Accounts Payable outstanding retainage amount for the project category.
The field is updated automatically when you post, in Accounts Payable, an original invoice, credit note, debit note, or adjustment that includes retainage for these project types and accounting methods. It is also updated when you post a retainage invoice, credit note, or debit note to clear outstanding retainage payable. You cannot edit the field.
The amount is displayed in the functional currency.
Viewing Retainage Information
The Transaction History form also includes the following retainage information for each document:
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Source Retainage Amount.
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Functional Retainage Amount.
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Retainage Due Date.
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