Paying Retention Amounts

To release the retention amount to the vendor or supplier, use the Invoice Entry task. Enter the vendor, AP type, and invoice number as if you were going to make an adjustment to the invoice. However, don't enter amounts into the Adjustment Amt and Discount Amt fields. Instead, enter the amount of the retention as a negative in the Retention Amt field. (In the previous example, retention of -20.) The system issues the Is The Above Information Correct? prompt. Select Y to go to the Seq field where you can press F4 to exit the task. (No distribution needs to be entered since the distribution balance is zero.) This results in the following accounting:

 

Accounts Payable

Retention Payable

 

20

20

 

 

Now the balance on the invoice is equal to the amount you entered. Paying this amount as you would any other invoice amount results in the following accounting:

 

Accounts Payable

Cash in Bank

20

   

20

 

Adjusting Permanent Retention

 

If the retention is to be permanently retained and not paid, you must enter an adjustment in the Invoice Entry task. Using the figures from the previous example, enter -20 in the Adjustment Amt field and -20 in the Retention Amt field. Distribute the -20 to the expense account used for the original invoice entry. The following accounting takes place:


Accounts Payable

Retention Payable

Expense Account

20

20

20

   

20

 

If the supplier sends a credit memo to adjust the retention amount, the credit memo is entered normally. When you select the invoice in the

Payment Selection task, the retention is released as though it were paid. The credit memo and open retention are offset when the check is printed.



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