Set up retentions

To set up retentions for a project:

1. Click the Retentions tab.
2. The Project Value field is pre-filled with the approved value of the linked quote. If a quote is not linked to the project, you can manually update this field. If this value includes GST, click Inc GST to calculate the ex GST value.
3. You can enter either a total dollar value in the Max Retention Value, or a percentage for the retention value in the Project Retention Margin % field.
   

   The Inv. Retention Margin % field can be used when the retention amount per invoice is different to the overall retention margin. This is especially useful when a contract requires a higher retention percent to be held from your invoices until the retention total amount is reached.

    
4. Choose what values should be included to calculate the Retention value.
   

   Markups used on your project are included when the Project Value is pre-filled. Markups can be excluded by un-ticking Inc Markup.

   Every project stage is included in the retention value, however, you can exclude values which aren't linked to a stage. Simply untick Inc. No Stage.

   If the contract includes variations in the retention, select the Inc Variations checkbox to allow task variations to be included in retention calculations.

    
5. Enter the Retention Period (no. of months). This is used to calculate the final date for retention claims based on the Project End Date.
6. Save Retentions to proceed to the final setup step.

Retention fields and settings

Completion and retention period claims

Once our retention information has been saved against the Project, we can set the retention percentage we can claim on project completion and/or after the retention period has lapsed.

If you can claim a percentage amount of your retentions when the project is completed, set the Completion Claim % value. This will modify the Liability Period % to the remaining percent so you don't claim for more or less that you are entitled to. The Claim Date shown is the Project Completion Date.

If you can only claim your retentions once the Retention Period has lapsed, there is nothing further to do since the default value for the Liability Period % is 100, meaning that we will be claiming the full amount of our retentions on the Claim Date shown (Retention Period + Project Completion Date).

 

Retention Alerts

By default, AroFlo will show an alert in your Message Board for both the Completion and Retention Period Claims 7 days before the claim date with a direct link to your project to help you manage the retention claim process. Find this setting in the Retentions tab of your project under Retention Alert Settings. From here you can: change when the alerts appear by editing the number of days prior to a claim needing to be made in the Days Before Claim Date box untick Claim Due Dashboard Alert to turn off these alerts. If the Claimed checkbox in any of the two Claim areas is ticked (see below), this will dismiss the relevant alert.

 

Retentions on invoices

Accounting Integration information

When a progress invoice with retention withheld is processed, a journal entry will appear that will debit your Retention Withheld account and credit your Liability for Defects account with the value of the Retention Withheld.

Show an example

 

 

When a Retention Claim Invoice is processed, a journal entry will appear that will credit your Retention Withheld account and debit your Liability for Defects account with the value of your Retention Claim.

Show an example

 

 

We recommend you set up your Accounting Integration before using project retentions.

1. For your integration entities, click the Retention tickbox under Post Zones and Save.
2. Add your relevant Account Codes from your accounting package into AroFlo
3. Map your account codes accordingly. Under Add Account Code Mapping:
   1. for Sales Invoices - select ‘Retention Withheld (Asset)’. This will be your Retention Withheld account. Add Mapping to save.
   2. for Sales Invoices - select ‘Liability for Defects (Liability)’. This will be your Liability for Defects account. Add Mapping to save.

This will add a new Retention tab when syncing data so you can push over the above journal entries when a progress invoice with retention withheld, or a retention claim invoice is processed.

 

 

Video and graphic showing Retentions Workflow

 

 

Progress or Stage Invoice

Progress claims or stage invoices will recalculate the value of your invoice and contain a negative retention line.

If you don't want to apply this on this invoice, tick Hide Retention and Save the invoice.

Site Administration includes a setting to have this ticked by default.

 

 

 

All Project invoices

All invoices raised against that project, whether it be a Task/Project or Progress invoice will show the retention amount for that invoice underneath the Balance Due for the invoice.

 

 

Once the invoice has been created, the retention amount will be added to the Provisional Retention Total area of the Retentions tab. When an invoice is Approved, the amount is transferred to an entry in the Retention Witholdings area to make it easier to track each amount.

Displaying Retention Amounts on an Invoice

You can use the invoice layout fields [Total (ex) less Retention] or [Total (inc) less Retention] to provide your client with an invoice that shows the balance with the retention withheld. To display your preset margin percentages on an invoice use the Static Data fields: Project Retention Margin % or Inv. Retention Margin %.

 

 

Create a Retention claim

When it's finally time to claim your retentions, click the relevant Create Retention Invoice button, depending on the scenario, to create your retention claim invoice. The relevant Claimed checkbox will change to ticked and the button will change to Retention Invoice Worksheet so you can view the invoice.