Retainage that never gets lost in AR aging
Fintra withholds retainage on every progress billing, parks it in a dedicated Retainage Receivable account, and reports the balance held per job - so your cash forecast reflects what is actually collectible today.
Illustrative product view
What retainage is and why it distorts cash
Retainage (or retention) is a percentage of each progress billing - typically 5–10% - that the owner withholds until the job is substantially complete. It protects the owner, but it means the amount you invoice never equals the cash you collect, and the withheld balance grows quietly across every draw on every job.
How Fintra keeps retainage clean
- Set a retainage percent per job (default 10%), with per-line overrides on a draw.
- Each progress billing splits the entry: net due to AR, withheld amount to Retainage Receivable (account 1210).
- The retainage report totals what is held per job - your release worklist.
- Because retainage lives in its own account, standard AR aging shows only collectible balances.
Retainage withheld
retainage = this_period_billing × retainage_pct = $120,000 × 10% = $12,000
Illustrative. The $12,000 posts to Retainage Receivable while the customer is invoiced for the $108,000 net due.
Retainage receivable and retainage payable
| Type | What it is | How Fintra handles it |
|---|---|---|
| Retainage receivable | What owners withhold from your draws | Split to a dedicated account on each progress billing; totaled on the retainage report |
| Retainage payable | What you withhold from subcontractors | Withheld on subcontractor bills so you don’t pay out retention early |
At close: keep retention honest
The construction close can reclassify retention out of ordinary receivables into a retention receivable account using each job’s retention percent, so the month-end balance sheet always separates held retainage from current AR. That reclass is part of the vertical close, not a manual journal entry someone has to remember.
Frequently asked questions
What is retainage in construction accounting?
Retainage (retention) is a portion of each progress billing - usually 5–10% - that the customer withholds until the project is substantially complete. It is earned but not yet collectible, so it must be tracked separately from ordinary accounts receivable to keep AR aging and cash forecasts accurate.
How does Fintra track retainage receivable?
On every AIA progress billing, Fintra splits the entry: the net due goes to accounts receivable and the withheld retainage goes to a dedicated Retainage Receivable account. The retainage report then totals what is held per job, giving you a clean list of balances to request on release.
Does Fintra handle retainage payable to subcontractors?
Yes. Just as owners withhold retainage from you, you can withhold retainage on subcontractor bills so you don’t release retention to a sub before you’ve collected it yourself. Retainage payable is tracked separately from ordinary accounts payable.
Why not just track retainage in accounts receivable?
Because retainage is not collectible until the job completes, leaving it in AR overstates what you can collect now and distorts your cash forecast. A dedicated retainage account keeps current AR honest and makes the held balance easy to report and release.
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