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Posting Purchase/Sales Invoice With Retention

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Posted on by ADIGA88

Hi Dears,

In construction we have what called Invoice retention when dealing with sub-contractors, in short it's about holding a portion of the invoice payment usually for one year, and posting should hit the payable and retention accounts and for Vendor Ledger Entry, two entries should be posting with different due date (one for the current due and the other for the retention period), is there an extension or a way to apply this in Business Central.

Thanks and Regards,

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Dynamics 365 Business Central

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Gerardo Rentería Ga... 25,225 Most Valuable Professional on at

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Hi

Maybe here you can found an properly extension

https://appsource.microsoft.com/es-es/marketplace/apps?search=retention&page=1&product=dynamics-365-business-central

Best Regards

Gerardo

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KasparsSemjonovs 4,774 Super User 2025 Season 2 on at

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You can check if deferrals can suit this need. But if You need the Invoice to be split into two, then most likely You need to look for something else.
Explore the Jobs (Project) module - but it is more to the Customer invoices.

Other option would be to use Purchase Orders - where You post Receipt of everything that has been done (in one or several receipts) and issue an Invoice only for half - at the start, and for other half You Post the invoice after a year, or 50% of the invoice amount can be set as Prepayment. depends on your needs/accounting procedures.

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ADIGA88 on at

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Dear KasparsSemjonovs,

Thanks for the suggestions, for the deferrals will not help here because it will full credit the full amount to the payable account while I need to credit only the non retained amount, and will split the debit on which not I need.

for the Purchase Order suggestion, I need to calculate VAT for the whole order (invoiced) so can't only invoice the non-retained amount.

The following example is what I need for G/L Transaction

the Total Order Amount Inc. VAT is 2300 and the Retention is 10% of the Amount Exl. VAT which is 200

Posting Date	G/L Account Name	Description	Debit Amount	Credit Amount
08/10/2023	Revenue - Invoiced	Order SO-2100004		2,000.00
08/10/2023	VAT on Sales	Order SO-2100004		300
08/10/2023	Customers (Receivable)	Order SO-2100004	2,300.00
08/10/2023	Customers (Receivable)	Order SO-2100004, Retention		200
08/10/2024	Retention Receivables	Order SO-2100004, Retention	200

This is the Customer Ledger:

Posting Date	Document Type	Description	Amount (LCY)	Due Date
08/10/2023	Invoice	Sales Invocie	2,100.00	08/10/2023
08/10/2023	Invoice	Sales Invocie Retention	200.00	08/10/2024

Same for the payable side

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Ben Baxter 6,620 Super User 2025 Season 2 on at

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There are Extensions available on AppSource which provide this functionality. Look into the Jobs/Project based Extensions. The way I have seen it handled by Cost Control's Job Manager product is it splits the retainage amount out of the order and stores it in a retainage table. Then there is a process to invoice for retainage balances based on their date. So instead of billing it all upfront with a future posting date, the system stores the retainage balance for future invoicing. You would have visibility into the total retainage balance to see what has been held back.

You should reach out to your local support partner, who I would assume has experience in construction, and ask them for their recommendation on Extensions they recommend for this purpose.

Best Regards,

Ben Baxter

Accent Software Inc

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