would you like to see a better way of recording the last retainage payment
well then watch this video and you'll see
a better way than what we did in the previous video for recording the last retention payment
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and i'll do my best to help you and of course if you feel the video helped you i hope you will
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in this video we will show the second method of recording the last retainage payment when it's
finally received by a client you see this method uses something called the retainage payment item
now it only takes a moment to set up but it will give you more of what you need when you record
receiving the last retention payment for a job using this method allows you to bill the client
specifically for the last retention payment it will then add the invoice that you sent to the
client for the last retention payment to the client's overall balance and it shows on the
retention report for that specific client which is better than what was shown a moment ago in the
previous video so how do we set it up well it's very simple we create an item on the items list
called final retention payment and we make it an other charge type of item we then connect it
to the retention receivable account just like we did the original retention item from the
main menu we click list item list these are the items we've been working with the whole course
from the bottom left we click item new and we choose other charge and the name of it is last
retention
payment and that's exactly how it will look when you put it on an invoice and
the account that it's connected to is the other current asset retention receivable
click ok and that's the item that we put on the invoice when we formally request payment from
a client for the last retention payment and now let's see how this works let's bill brown company
for the lillian court retention final payment what will happen at the moment we put the final
retention item on an invoice and send it to the client well the retention receivable obviously
will go down because we just build the client for the last retention receivable but if we build them
for the last retention receivable that means that the normal accounts receivable will go up
along with that specific client's balance and that's what makes this method better
in the previous video retention receivable went down and cash went up and you did not have any
subsidiary client records about billing and receiving the last retainage payment
but using this method will it will eliminate the retention receivable account and it will add it
to the normal account receivable so let's imagine on august 1 of 2018 we build brown company for the
remaining retention of lillian court well what will happen in the trial balance at the moment
we take our new item and put it on an invoice and bill brown company you see lillian court
is the only retention receivable that remains in the retention receivable account this 625 is only
for that one job so at the moment that we bill the client for that final retention payment retention
receivable becomes zero because they don't owe us retention anymore because now it's on a bill
but what happens is it goes into regular accounts receivable and regular accounts receivable will
increase by that 625 and become 124 915 now you don't have any retention receivable
you only have normal invoices as part of accounts receivable let's take a look at how it works we'll
open the trial balance before we get started so that we can see the change immediately
this 625 if you double click you'll see it's only for the lillian court job because in
the previous video this 5000 paid off these others but now we're doing a better method
so we open the invoice window and we put the date well let's make it nice we put the date uh august
31st of 2018 i believe the year is
okay it's uh all right good now we choose the lillian court job now we are not going
to choose the estimate okay the estimate might still be open but we won't choose it
because at this point the estimate should be completed a hundred percent but it should still
say the retainage remaining now we click for the item and we find the la the item we just made
last retention payment and we have to know we have to be able to look at the reports and know
that the last retainage payment for this particular job that's due is 625
so when we click save and close we achieved everything we need there is no more retention
receivable it is now part of normal accounts receivable but the most important thing is to look
at the customer specific reports because that's what makes this method better if you look at the
open invoice report you see for lillian court you now have was lily in court
you had this look at what you have the january 31 is a regular job invoice that's still open
and the august 31st is the retainage invoice so you can see in the client's balance the within
the client detailed reports you can see that they owe us twelve thousand five hundred eleven eight
seventy five for the last invoice and since the work was confirmed finished they also owe
us six twenty five for the final retention payment and that clearly shows why 12 500
is owed for lillian court and that's why this method is a better method and one last benefit
to using this method you can include the final retainage payment in the retention report you
just have to filter it the right way if i open the retention report it only shows the item of
retention itself it doesn't include the last payment retention item that we just created
and the basic retention report includes all clients but let's filter it down for just lillian
court and add the final retention payment item and see what this report looks like customize report
filter by item but this time we'll choose multiple items you have to you have to scroll up watch this
scroll up to choose multiple items scroll down we want the retention item and we
also want the last retention payment click ok now we're also filtering by name because we
want only that one job lillian court and when we click ok now you can see that here are the
retention items and the dates and the invoices they were on in this case there was only one
and then here is the last retention payment for that very same client so usually there'll be
several down here make the name wider so you can print and give this to whomever you need
that these are all the invoices and the amounts of retention withheld from them and in this section
here shows the last retention payment and the date and invoice number that it was billed
you can learn everything you need in quickbooks regarding contractor features
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