Create GL account for retainage

Overview

Use retainage if your customer wants to withhold a portion of the project cost until the work is complete. Retainage may be calculated using a single project-wide retainage rate or variable retainage rates by line item, depending on your Application for Payment settings.

Things to know

• Invoicing for retainage allows you to bill accurately as the project progresses, track retainage amount, and collect the cost at the end of project completion.  For more on progress billing, see Progress billing overview and setup.

• Use retainage as needed. If your customer requests retainage, then you can add it to the contract.

• The retainage calculation method (project-wide or item-level) does not affect how retainage receivable accounts are set up or mapped in your accounting integration.

Set up accounting integration

Before you create retainage for a project, you need to set up your accounting integration and ServiceTtian to account for the retainage:

• Set up your Intacct or QuickBooks integration with ServiceTitan. For more, see Intacct Onboarding Step 1: Set up the Intacct Integration with ServiceTitan and Web Connector Setup Step 1: Download and install ServiceTitan Web Connector.

• Add a new GL group in Intacct and QuickBooks called Retainage Receivable. For how, see Intacct Onboarding Step 4: Map pricebook items to Item GL Groups. and QBD Onboarding Step 3: Map pricebook items to a QuickBooks general ledger account.

• Add a new GL account in Intacct and QuickBooks called Retainage Receivable. For how, see Intacct Onboarding Step 5: Map payment types to GL Accounts and QBD Onboarding Step 3: Map pricebook items to a QuickBooks general ledger account.

Set up ServiceTitan

Once you set up your GL group and GL account, you’re ready to set up retainage in ServiceTitan:

Note: This retainage service and its associated GL account are used for retainage billing regardless of whether retainage is calculated at the project level or item level.

1. Go to the navigation bar and click Settings .

2. In the side panel, click Integration > Intacct or QuickBooks (depending on which integration you use) and sync the GL account. For more, see Intacct Onboarding Step 2: Sync Intacct objects with ServiceTitan and Web Connector Setup Step 3: Reconcile ServiceTitan with QuickBooks lists.

3. When you’re done, go to the navigation bar and click Pricebook.

4. From the side menu, click Services.

5. Click Add Service.
   

6. Enter the details for the retainage service:

   1. Name: Retainage

   2. Price: Enter -1
      Note: You’re entering a -1 in the price field because you want to ensure your invoice displays a negative. Once you identify what your retainage percentage is from your contract, you can edit this field during invoice creation.

   3. Taxable: Select this so you can tax the service when you bill for the retainage.
      

   4. General Ledger Account: Retainage receivable

      Note: This GL account should be identical to the one you just set up for retainage receivable.

   5. Project Label: Select the retainage label to ensure that the Budget vs Actual table accurately displays the retainage of the project.

      Note: You need to create a Retainage label and create a Retainage category to assign the Retainage label to. For more, see Project labels.

      

7. When you’re done, click Save.

Want to learn more?

• See Project Job Costing report template