Requirement 1: Create a QuickBooks Item to use for Retainage
1. Typically, you should have an account to hold the retainage amounts, one for receivables and another for payables. Typically for receivables, the account type would be “Other Current Asset”. While for payable retainage, the type would be “Other Current Liability”.
2. Create an account to hold retainage receivable.
a. Add a new account
b. Select “Other Current Asset” as the account type, select “Retainage” as the Detail Type. Type in the desired name.
c. Save the account
3. Create an account to hold retainage payable
a. Add a new account
b. Select “Other Current Liabilities” as the Account Type and Detail Type. Enter the desired account name
c. Save
4. Create an Item to use for as retainage line item.
a. Open the Sales > Products and Services module
b. Create a new Item. Choose “Service” as the item type.
c. Enter the desired name, leave the SKU and Category blank, check the box for "I sell this product/service to my customers.", then check the “I purchase this product/service from a vendor”
d. Under the Income account, select the retainage receivable account you created. Under the Expense account, select the retainage payable account you created.
e. Save.
Requirement 2: Setup the Retainage QuickBooks Item Code in RedTeam Go
1. Go to the QuickBooks Online Integration setting page (Accounting > QuickBooks Online Integration > Settings>scroll to the bottom of the Settings Page to see Retainage lower right corner)
2. Select the QuickBooks retainage item you want to use for syncing retainage data for both Invoices
3. Select the QuickBooks Retainage created in the steps above to sync retainage data for both Owner Invoices (Invoice - Accounts Receivable) and Subcontractor Bills (Accounts Payable).
4. Save
How do the retainage accounts handle the bills as they are pushed to QuickBooks?
Once the Retainage accounts are connected through the integration, Subcontractor invoices will flow over to QuickBooks showing the full amount billed and a negative retainage amount for all progress bills. The final bill releasing retainage with flow to QuickBooks with a bill amount of $0 and retainage amount in the positive full value of retainage.
Ex. Bill 1:
Item 1 bill amount: $500
Retainage: $50
What is sent to QB:
Item 1 amount: $500
Retanage: -$50
Bill 2:
Item 1 bill amount: $100
Retainage: $10
What is sent to QB:
Item 1 amount: $100
Retainage: -$10
Bill 3 (Retainage bill):
Item 1 bill amount: $60
Retainage: $0
What is sent to QB:
Item 1 amount: $0
Retainage: $60
*Note: If retainage accounts are not set up in QuickBooks and mapped to Owner and Subcontractor bill types through the integration settings, the amount that pushes to QuickBooks to pay the sub is the net Bill Amount - Retainage held = payment due. Using the same example as above it will looks as follows:
Bill 1:
Item 1 bill amount: $500
Retainage: $50
What is sent to QB:
Item 1 amount: $450
Bill 2:
Item 1 bill amount: $100
Retainage: $10
What is sent to QB:
Item 1 amount: $90
Bill 3 (Retainage bill):
Item 1 bill amount: $60
Retainage: $0
What is sent to QB:
Item 1 amount: $60
Sample RedTeam Go Invoice with Retainage Upload
RedTeam Go Owner Bill:
QuickBooks Invoice:
Last Owner Bill RedTeam Go Example:
QB Invoice:
Sample Sub Billing Retainage Upload - RedTeam Go
RedTeam Go Sub Bill:
QuickBooks Online Bill:
RedTeam Go Sub Bill with returned retainage:
QuickBooks Online Bill:
RedTeam Go Sub Bill with balanced-out last bill:
QuickBooks Online Bill:
Example Retainage Chart of Accounts for Retainage Receivable in QuickBooks Online:
Example Retainage Chart of Accounts for Retainage Payable in QuickBooks Online:
