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How do I designate that Retainage is supposed to be held on a Sub-Contract?

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Retainage (or retention) is a common practice in construction contracts, where a percentage of the subcontractor’s payment is withheld until project completion or until specific milestones are met. This ensures that subcontractors complete their work according to contract requirements before receiving full payment.

In Contractor Foreman, you can specify retainage when creating or managing a Sub-Contract, ensuring that the retained amount is tracked correctly and deducted from payments until it is due. This article will guide you through the process of setting up retainage in a Sub-Contract and how it affects billing.

Access the Sub-Contracts Module

  1. Log in to Contractor Foreman.
  2. Navigate to the Sub-Contracts module from the Main Menu.
  3. Select an existing Sub-Contract or create a new one by clicking the + Sub-Contract button.

Specify Retainage Percentage in the Sub-Contract

  1. Once inside the Sub-Contract, locate the Retention % field in the details widget.
  2. Enter the percentage of retainage you want to apply (e.g., 10%).

By entering a retention percentage, Contractor Foreman will automatically calculate the withheld amount for each Bill created against this Sub-Contract.

How Retainage Works When Entering a Bill

When you generate a bill for completed work, the retainage percentage set in the Sub-Contract will be applied automatically.

Example:

  1. A subcontractor completes $4,000.00 worth of work under a Sub-Contract with 10% retainage.
  2. You generate a Bill for the completed work.
  3. Contractor Foreman will automatically withhold $400.00 (10%) and only mark $3,600.00 as payable.

This ensures that retainage is deducted correctly, and the remaining amount will be tracked until it is released at the end of the project or as per contract terms.

POST A PAYMENT TO THE BILL

Tracking Retainage on a Sub-Contract

To monitor withheld amounts:

  1. Open the Sub-Contract.
  2. In the details tab, you will see the Billed Amount, Total Retainage, and Remaining Retainage for the sub-contract.

Releasing Retainage

Once the subcontractor has met the conditions for final payment (e.g., project completion, inspections, or punch list completion):

  1. Generate a Bill from the Sub-Contract.
  2. Once created, click Add Item to Bill, and click Add Retainage (Partial or Full) for Payment.
  3. Enter the retainage amount you wish to release.
  4. Click Save & Close to add it to the bill

This ensures that the subcontractor is paid the full contract value while keeping financial records accurate.

By setting up retainage in Contractor Foreman, you can effectively manage withheld funds, ensuring subcontractors complete their work before full payment. Retainage is automatically applied when generating Bills and can be tracked within the Sub-Contracts module.

This feature helps maintain financial control, reduces risks, and ensures contract compliance, making it an essential tool for managing project finances efficiently.

For more details on managing Sub-Contracts, check out:

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