Service Titan Knowledge Base

Set up retainage based on Application for PaymentLast updated on 03/22/2022

Progress billing is often done for construction projects. Retainage is a percentage of invoice that is not billed until the project is complete and the customer has approved the work. Retainage gives the customer recourse if they aren't satisfied with the work done.

Things to know

  • Retainage on a project is optional.

  • Customer contracts specify if retainage is required and the retainage percentage.

  • To progressively bill, your customers may require you to use the construction industry standard and submit Applications for Payment.

  • Applications for Payment reflect deductions for retainage.

  • Retainage must be set up before creating an Application for Payment.

  • Retainage must be set up at both the account and project levels.

  • Progress billing is done at the project level.

  • Final invoices include retainage charges that were deducted from previous invoices.

  • Retainage can be withheld for projects not using Applications for Payment. See Create Retainage.

  • Retainage is also known as “holdback” in Canada.

Set up retainage with Application for Payment

To deduct retainage from progress invoices, you’ll first set up retainage receivable accounts and import them into ServiceTitan. Next, you’ll set up retainage at the account level and the project level.

  1. Set up retainage receivables:

    1. If you use Intacct:

    2. If you use QuickBooks:

  2. Set up retainage at the account level:

    1. Go to the navigation bar and click Settings icon-settings.png.

    2. In the side panel, click Operations > Application for Payment. The Application for Payment screen opens.

    3. Complete the fields as described below:

      • Code: Enter the service Code you want associated with a task.

      • Name: Enter Retainage or another name if you prefer.

      • Item Description: Enter the task description you want to appear on the invoice.

      • General Ledger Account: Select the GL retainage receivable account from the dropdown.

      • Payment Term: Select a payment term from the dropdown.

    4. Click Save in the upper right corner of the Application for Payment screen.

  3. Set up retainage at the project level

    1. Open the project you want to set up retainage for. Note: Retainage can only be set at the beginning of a project. You cannot enable retainage after the second Application for Payment has been made.

    2. Click icon-pencil.png to edit the project.

      Edit Project opens.

    3. Make sure Enable Retainage is toggled to on. Note: The retainage percentage shown is project level retainage. If you want to change the percentage for your project, enter a value in Retainage Percentage.

    4. Click Save.

Important note: Some features may not be currently included in your account and additional configuration may be required. Please contact technical support for details.