Adjust Maximum Bill

There are two options for retention amount distribution:

  • Composite Percentage - With this option, the system takes the final retention amount and calculates an overall percentage rate which it applies to all contract items equally.

  • Item Percentage from Invoice - With this option, the system distributes the final retention amount based on the work completed retainage percent value for each line. The system continues to distribute in this manner until the retention amount is depleted. The system places any leftover amount on one final item on the contract, resulting in a calculated retention percentage value for that item only. The system sets the work completed retainage percent to zero for all remaining items on the contract.

    Example : Composite Percentage

    If you have set the maximum retention amount for a contract at $10,000, and you have already created invoices with retention amounts totaling $8,000, you will only have $2,000 left before you reach the maximum retention setting. If you invoice $3,000 retention for two more items (as seen in Table 1), the system will calculate a composite retention percentage and apply it to each item.

    The system uses this calculation to determine the composite retention percentage: Maximum retention remaining ($2,000) / New Invoice Items Total ($30,000) = Composite Retention Percentage (.066666). The system then updates the work completed retention percentage and work completed retention amounts based on the composite retention percentage (as seen in Table 2).

    Table 1. Retention Amounts Prior to Distribution

    This Invoice

    Invoice Amount

    Retention %

    Retention Amount

    Item #1

    $10,000

    10%

    $1,000

    Item #2

    $20,000

    10%

    $2,000
    Table 2. Retention Amounts After Distribution

    This Invoice

    Invoice Amount

    Retention %

    Retention Amount

    Item #1

    $10,000

    6.67%

    $668

    Item #2

    $20,000

    6.66%

    $1,332

    Example: Item Percentage from Invoice

    Tables 3 and 4 display how the system would distribute the retention amount for a contract with a maximum retention of $400. Table 3 shows the retention amounts prior to distribution, while Table 4 displays the retention amounts after the distribution.

    Table 3. Retention Amounts Prior to Distribution

    This Invoice

    Invoice Amount

    Retention %

    Retention Amount

    Item #1

    $1,000

    10.00%

    $100

    Item #2

    $2,000

    10.00%

    $200

    Item #3

    $3,000

    10.00%

    $300

    Item #4

    $3,000

    10.00%

    $300
    Table 4. Retention Amounts After Distribution

    This Invoice

    Invoice Amount

    Retention %

    Retention Amount

    Item #1

    $1,000

    10.00%

    $100

    Item #2

    $2,000

    10.00%

    $200

    Item #3

    $3,000

    3.33%

    $100

    Item #4

    $3,000

    0.00%

    $0

     

JC Contracts