If your company holds retainage on subcontractors or waits on retainage from project owners, you need a clear view of every withheld dollar inside Microsoft Dynamics 365 Business Central, not in a separate spreadsheet.
How Construction Companies Track Retainage Payables and Receivables in Business Central
Why Standard AR/AP Workflows Fall Short for Construction Finance Teams
What Retainage Is and Why It Complicates Your Books
Retainage is the part of a contract price that is held back from progress payments until a project is substantially complete. The amount held back is typically 5% to 10%. States that set a legal limit are roughly . On a until the project closes out.
Retainage also flows down the payment chain. When a project owner holds back payment from a general contractor, the general contractor often from its subcontractors. As a result, many construction companies hold retainage on one side of the ledger and wait on it on the other.
Where Standard Workflows Break Down
Accounts receivable (AR) and accounts payable (AP) workflows are built around a simple idea: you issue or receive an invoice, and the full amount is due on its terms. Retainage splits each progress billing into two amounts on two timelines. One portion is due now. The other is such as substantial completion, punch list resolution, final acceptance, lien waivers, and proof of subcontractor payment.
When your system does not separate those amounts, your finance team has to track them somewhere else. Often that means retainage lives in a spreadsheet next to your Business Central data instead of inside it. Your team then has to answer questions like these by hand:
- How much retainage is outstanding, and for which customers, vendors, and projects?
- Which held amounts are now eligible for release?
- Is sales tax calculated correctly on the retained portion?
- Can you give your auditors a complete history of what was held, released, and applied?
Each of those questions gets harder as your project count grows and as retainage builds up on both the payables and receivables side.
How Retainage Payables and Retainage Receivables Work Within Business Central
Suite Engine offers two separate apps for this: and . Both are built within Business Central, so retainage is recorded against the same contract, invoice, and payment data your team already uses. You can implement either app on its own or use both together.
Retainage Payables tracks the retainage you hold on your vendors and subcontractors. With it, you can:
- Review amounts coming due and release them manually, or have the system suggest due retainage payments based on your setup
- Calculate tax on transactions that include retainage
- Report on retainage at any point and review its history
- Control when held amounts are paid
Retainage Receivables tracks the retainage owed to you. With it, you can:
- Post sales documents with retainage
- Keep a retainage sub-ledger
- Release retainage and apply or unapply documents
- Report on outstanding retainage
- Calculate tax, including the retainage amount
- Control when retained receivables are released
According to its Microsoft AppSource listing, Retainage Receivables calculates, stores, and tracks retainage while letting you decide when retained receivables are paid. It supports the Essentials and Premium editions of Business Central.
Who Uses Retainage
Retainage Payables and Retainage Receivables are for any Business Central user who holds or receives retainage. That includes general contractors, specialty contractors, and suppliers.
Which apps you need depends on where you sit in the payment chain. A general contractor has retainage held back by the owner and holds back retainage from its subcontractors, so it needs both sides. A supplier or specialty contractor that only waits on retainage from others may need Retainage Receivables alone.
Where HomeBuilder Fits
If you are a residential production builder running , Retainage is a separate product that integrates with HomeBuilder. Your project records and your retainage balances then live in the same Business Central environment.
You do not need HomeBuilder to use Retainage Payables or Retainage Receivables, and you do not need either Retainage app to use HomeBuilder. You choose the combination that fits how your company operates.
Take the Next Step
See how Retainage Payables and Retainage Receivables would work with your Business Central data.
You can also .
