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