Tracking Retainage (Holdbacks) in Xero

Retainage or holdbacks is the sum withheld by the customer on progress payments and is later released to the contractor per the terms of the contract. In regards to Sage Construction Management, retainage is applicable on both Prime Invoice (A/R) and Sub Invoice (A/P) features.

When exporting progress invoices to Xero, the Sync Wizard can either include retainage or not depending on the Sync Preferences. If it will be tracked in Xero, please follow the setup guidelines below.

Type of Record	Name	Type
Chart of Account	Retentions Payable	Non Tax Related | Other Current Liability
Chart of Account	Retentions Receivable	Non Tax Related | Other Current Asset
Item	Retention or Holdbacks	AP Chart of Account = Retentions Payable AR Chart of Account = Retentions Receivable

Retainage Example

The example below shows how Retainage (i.e. Holdbacks) is handled depending on Sync Preferences.

Sage Construction Management Invoice Example - 10% Retainage (Applies to Prime Invoices or Sub Invoices)

Item Description	Inv. Total	Retainage	Total Less Retainage	Job Cost Code
Concrete	$50,000	$5,000	$45,000	03000
Masonry	$40,000	$4,000	$36,000	04000
Total	$90,000	$9,000	$81,000

Invoice Exported To Xero WITHOUT Retainage Shown

Item Description	Inv. Total	Item Reference
Concrete	$45,000	03000
Masonry	$36,000	04000
Total	$81,000

Invoice Exported To Xero WITH Retainage Shown

Item Description	Inv. Total	Item Reference
Concrete	$50,000	03000
Masonry	$40,000	04000
Retention	-$9,000	Retention
Total	$81,000