Holding Retainage

Although the retainage terms are established on the Award transaction, the actual withholding of Retainage in Advantage Financial occurs in the Payment Request and Automated Disbursements processes. Based on the information entered on the Award transaction, payments are made to the contractor for the invoice amount, less retainage withheld. The retainage is recorded as a liability until liquidated (for example, paid out to vendor or third party or forfeited to the public entity).

In Advantage Financial, once the retainage terms have been defined, the holding of retainage is an automated process (refer to Automated Disbursements). When the vendor invoice is received, a Payment Request transaction is entered into the system. If the Payment Request references an Award, the Award number and commodity line number are entered on the commodity line of the Payment Request transaction. When the Payment Request is validated, the system verifies all information related to the Award. If the referenced Award commodity line is subject to retainage, the amount is automatically calculated on the Payment Request based on the retainage terms entered on the Award. When the payment transaction is submitted, the Retainage Amount is updated to the Pending Retainage field on the Retainage Summary by Award. Retainage Summary By Commodity Line and the Retainage Detail pages. To manually enter or override retainage terms on the payment request transaction, refer to Entering or Overriding Retainage Terms tab.

During the Automated Disbursements Process, retainage is withheld on the Disbursement (AD or EFT) transaction. The Retainage Amount is taken from the referenced payment transaction. The Retainage Amount is not recalculated during disbursements. When there is retainage on a disbursement transaction, a posting line is created for the Retainage Amount. When the disbursement transaction is submitted, the Retainage Withheld field is updated on the Retainage Summary by Award, Retainage Summary By Commodity Line and the Retainage Detail pages.

If a Manual Disbursement (MD) transaction references the payment transaction that has retainage, a posting line will be created for the Retainage Amount. When the MD transaction is submitted, the Retainage Withheld field is updated on the Retainage Summary by Award, Retainage Summary By Commodity Line, and the Retainage Detail pages. When the MD references a payment request with retainage, the user has the option to exclude retainage from the check with the use of the Exclude Retainage check box. If the Exclude Retainage check box is selected on the Accounting Line of the MD, retainage from the referenced payment transaction will not be withheld. When the MD transaction is submitted, the Retainage Line Amount on the MD will be set to zero. The Total Retainage Withheld field will not be updated on the Retainage Summary By Commodity Line record and the Pending Retainage Amount will decrease by the amount of the referenced payment request.

Hold Retainage