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How do you track retainage receivable and payable?

Quick answer

Track retainage on both sides of every job: the amount held from your billings (receivable) and the amount you hold from each sub (payable). For each, record the percentage, the running balance, and the expected release date, then reconcile at closeout so every withheld dollar is collected or released on time.

Set it up per job, per side

For each project, note your retainage percentage and apply it to every pay application. Keep a running receivable balance (what you are owed) and a payable balance per sub (what you hold). The totals are real money that does not show up in a normal accounts-receivable aging report.

Watch the release dates

Retainage is released at substantial completion or final acceptance. Put the expected release date on each balance and follow up as closeout approaches. This is where contractors most often lose money, because the job is done, the team has moved on, and the final retainage check never gets chased.

Frequently asked questions

Why not just track retainage in accounts receivable?
Standard AR aging treats retainage like a normal overdue invoice or ignores it. Retainage has its own release timing, so it needs its own ledger.
Should I track retainage I hold from subs?
Yes. You are responsible for releasing it on time, and tracking it protects your relationships and avoids disputes.

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