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Posting Purchase/Sales Invoice With Retention

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Posted on by ADIGA88 47
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,
  • Suggested answer
    Ben Baxter Profile Picture
    Ben Baxter 4,608 Super User 2024 Season 2 on at
    Posting Purchase/Sales Invoice With Retention
    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
  • ADIGA88 Profile Picture
    ADIGA88 47 on at
    Posting Purchase/Sales Invoice With Retention
    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
  • Suggested answer
    KasparsSemjonovs Profile Picture
    KasparsSemjonovs 3,786 Super User 2024 Season 2 on at
    Posting Purchase/Sales Invoice With Retention
    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.
  • Suggested answer
    gdrenteria Profile Picture
    gdrenteria 10,136 Most Valuable Professional on at
    Posting Purchase/Sales Invoice With Retention

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