Create retainageLast updated on 03/09/2023
Use retainage if your customer wants to retain a percentage of the whole cost of the project until it is complete. This ensures they’re satisfied with the work before they pay. Your customer can pay the retained amount when you bill the last invoice for the project. The percentage which is retained is usually agreed upon when signing the contract for the job. Before you begin billing your customers with retainage, complete the required account integration setup.
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.
Use retainage as needed. If your customer requests retainage, then you can add it to the contract.
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 Setting up the Intacct Integration with ServiceTitan and ServiceTitan Web Connector Setup Guide.
Add a new GL group in Intacct and QuickBooks called Retainage Receivable. For how, see How to map Pricebook items to Item GL Groups for Intacct and Map pricebook items to a QuickBooks general ledger account.
Add a new GL account in Intacct and QuickBooks called Retainage Receivable. For how, see Map payment types to GL Accounts for Intacct and 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:
Go to the navigation bar and click Settings
.In the side panel, click Integration > Intacct or QuickBooks (depending on which integration you use) and sync the GL account. For more, see Sync Intacct objects with ServiceTitan and Reconcile ServiceTitan with QuickBooks lists.
When you’re done, go to the navigation bar and click Pricebook.
From the side menu, click Services.
Click Add Service.
Enter the details for the retainage service:
Name: Retainage
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.
Taxable: Select this so you can tax the service when you bill for the retainage.
General Ledger Account: Retainage receivable Note: This GL account should be identical to the one you just set up for retainage receivable.
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.
When you’re done, click Save.
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Important note: Some features may not be currently included in your account and additional configuration may be required. Please contact technical support for details.
Disclaimer: Information provided in this article is for informational purposes only and it should not be construed to be legal advice. Information provided in this article may also not constitute the most up-to-date legal or other information. You should not act or refrain from acting on the basis of any information in this article to meet any compliance requirements without seeking independent legal or other professional advice.