How do I Release Retainage in Accounts Receivable?

How do I Release Retainage in Accounts Receivable(Manually or Automatically)

AR Release Retainage - Use this form to release retainage that you held back for payment. You can release retainage for all invoices related to a customer or for a specific customer contract.

You can only release retainage if the following conditions apply:

• Retainage was previously applied to the contract or invoice.

• You have not fully paid or released retainage.

• You entered the invoices entered directly into AR rather than interfaced them from JB.

  Once you specify a customer, all invoices for that customer (contract and non-contract) are displayed in the grid. Additional inputs allow you to restrict display of invoices to all invoices for a specific JC company or all invoices for a JCCo and Contract.

  Although retainage is applied to individual items on an invoice, you will release retainage at the invoice level. The system will then determine the amount to release for each item on the invoice based on the method used to release retainage and the amount released.

  Releasing Retainage

  You can release retainage manually or automatically. If releasing retainage manually, once you have entered the filter criteria and released retainage invoice information, click the chevron button. Then for each invoice in the grid, manually enter the release percent or release amount. Once you move off the line, the record is saved and you can then access the line detail (via the Release Details button) to adjust the release amounts for each invoice line as applicable.

  To release retainage automatically, check the Auto Calculate Release Retainage option, specify the date through which to release billed retainage, and select the method by which to calculate the retainage to release. There are two release methods available:

• Percentage - With this method, you specify the percentage to release, which is applied to all invoices. For each invoice, the system releases the specified percentage of the total open retainage for the invoice. It then distributes that amount to the items, beginning with the first item and continuing with subsequent items until the released amount is fully distributed. For example, you have an invoice with a total of $2000 in open retainage, with item retainage as follows:

  Item 1: 600.00

  Item 2: 700.00

  Item 3: 700.00

  You release 45% of the invoice's total open retainage, which calculates to $900. The system applies this amount to the items as follows:

  Item	Open Retg	Release Amt	Release Pct
  1	600.00	600.00	100.00%
  2	700.00	300.00	42.86%
  3	700.00	0.00	0.00%

  Since the amount does not fully cover the retainage for all three items, it releases the first item fully, applies the remainder to Item 2, and releases nothing for Item 3.

   

• Amount - With this method, you specify a flat amount to release. The system will release retainage beginning with the oldest invoice and continuing through each successive invoice until the total amount you

specified has been released. For example, if you specified to release $3500 of open retainage, it would be released as follows:

For Invoice #100 and #101, retainage is fully released for each item. However, since only part of the retainage was released for Invoice #102, the system applies the release amount to the first item and if a balance remains, continues to apply to remaining items until amount is fully applied.

Regardless of whether you release retainage manually or automatically, once retainage is released, the following occurs:

1. The system creates a single credit transaction for the total release amount. This transaction is assigned a transaction type of Release Retainage and a transaction number. A transaction line is created for each invoice line being released, with each line applied to the transaction number and line number of the original invoice.

2. The system then creates a single invoice (using the invoice number specified in the release retainage header) with one item for each line on the transaction. If multiple lines point to the same contract item, they will be combined into a single invoice item.

Once you process the batch, the invoice is then available for printing using the AR Invoice report. AR Release Retainage form closes and the system releases the retainage accordingly. The system creates a single invoice (using the invoice number from the Invoice # field in the header section) with one line item for the total amount of released retainage. To print this invoice, use the AR Invoice report in the AR Reports folder.

Incorrect Invoice Date/Due Date Indicated when Retainage was released.