Retainage is an agreed upon percentage of a contract price that is typically withheld until a project has been substantially completed. A general contractor may have retainage withheld by the customer, and also be withholding retainage from subcontractors.
1. Setting Customer Retainage
Customer Retainage is set while creating the Customer Proposal. The Project must be in Request status. The Retainage entry dictates retainage withheld by the customer, to be paid once the obligations for the project have been completed. The retainage rate will be applied across each line of the Schedule of Values. Once billing begins, the retainage amounts for each SOV line can be released and billed separately.
Steps:
In the Project’s Contract tab, click to edit the proposal.
Scroll down to the proposal details and set the retainage number as appropriate.
Click "Save"
OR Click the Preferences (Gear) icon and scroll to the Contract section
Adjust the Retainage and click "Save"
2. Billing Customer Retainage
Once work on a project is considered substantially complete, or obligations have otherwise been considered fulfilled, you will need to begin billing retainage. You can bill these retainage amounts to your customer within the progress billing.
Retainage percentages can be released incrementally as needed. The retained amounts can be released evenly on the entire project, or can be handled differently line by line within the billing's Schedule of Values.
Steps:
First create a new progress billing, or edit an existing draft billing.
When you scroll down to the details, the Retainage percentages will begin at the amount that was set by the customer contract.
The Retainage percentages can be changed per line. RedTeam Flex will add the difference to the billed amount in column E of the customer invoice. Individual SOV lines can have their retainage edited individually
Using the “Adjust Retainage to” option in the Billing Adjustments popup, the Retainage percentages can be changed simultaneously for every SOV line.
3. Vendor Retainage
Retainage can be withheld from a vendor, delaying full payment until they have fulfilled the necessary obligations for their role in the project. When creating a vendor Buyout Commitment, the Retainage is entered with the Contract Terms and will apply to any products and services for that commitment. When retainage is later released on a commitment, the change in retainage percentage will affect all billed products and services entries.
If the "Retainage %" field does not appear, then the configuration of the buyout agreement currently disallows retainage. To change that, a system administrator must add retainage to the appropriate agreement in Configuration > Commitment Forms, or request assistance from RedTeam Support.
Steps:
To add retainage to a new or draft Buyout Commitment, go to Step 2: Contract Terms within the commitment
Find the “Retainage %” field and add the appropriate percentage. 10% is commonly used.
Complete the buyout commitment as normal.
4. How to Release Retainage (Vendor Invoice)
As Invoices are approved in RedTeam Flex for partial or full payments, you will eventually want to release Retainage being held for a particular Vendor. Retainage is calculated by percentage, so releasing Retainage in RedTeam is as simple as reducing the Retainage percentage to zero. Follow the instructions below to enter a Vendor Invoice to release Retainage.
Steps:
Go to Step 2 of the Invoice
If you are only releasing Retainage, you will not enter any progress in the Current column, then click "Calculate"
Click marked "Adjust"
You will have the option to adjust the total retainage for all invoices to date, or only the current invoice. Selecting Current will only adjust the retainage amount on the current invoice.
Reduce the Retainage percentage to "0" to release all Retainage and move it to the Amount Authorized at the bottom
Click "Modify"
Click "Commit"
Proceed with the routing workflow and approval process normally