would you like a better way of recording receiving the final retainage payment
this method shown in this video is a better way
because it gives you the ability to actually bill the client for the outstanding remaining
retainage if you have any questions about this topic you can leave them in the comments section
below and i'll do my best to help you and of course if you feel the video helped you
i hope you will click like and don't forget to subscribe to get updates on new videos
that come out all the time if you use this better method for receiving withheld retainage
then you must make a retainage payment item and put that item on the list of products and services
now the retainage payment item is part of method number two and it gives you more
of what you need as a quickbooks online user it only takes a moment to set up and again it allows
you to bill the client specifically for the last retention payment and the total amount outstanding
it actually adds the invoice for the last retention payment to the client's overall balance
and that will show in the customer detailed records so how do we set it up we have to
go to the list of products and services and create an item called final retention
payment we make it a service type of item and we connect it to the retention receivable account
so in the top right we click the cog wheel and we go to lists products and services and in the
top right we click new and we choose service now the name can be final retainage payment
and of course the account that it is connected to will be the retainage receivable account which is
a current asset up here retention receivable that was the account that increased when we
recorded uh the actual retention decreasing the invoices so that is the very same account
that we will put the final item in to wipe out the balance
so we click save and close and now we have it right here on the list
and now we're ready to bill kirschbaum for the southwood roads jobs retention final payment
what will happen in the trial balance at the moment we send the bill for the final outstanding
remainder of the retention well here in the trial balance retention receivable actually goes down
because you no longer will receive retention or it's no longer indicated as owed as
retention normal accounts receivable will go up so it basically takes the balance of what's owed for
retention and moves it over to the normal accounts receivable balance and that's part of the process
of sending it on an invoice and of course the client's actual balance in the client detailed
records will also increase when using this method so let's imagine on april 30 2022 we build
curse bound for the remaining retention of the southwoods road job and how do we know that the
amount that we should bill is 135 dollars well if we actually open up the trial balance you can see
that retention receivable in total is 135 and if we double click you can see why is it 135
because even though brown company was uh previously billed for their retention brown
company actually paid their retention and you can see it in the account but you see kirschbaum had
these two invoices for both ninety and forty five dollars that were placed on invoices that lowered
the invoice for this retention so it's really billing them for these two in order to get paid
for what was withheld from those invoices so you can see invoice number nine or one thousand nine
was forty five dollars invoice one uh 1010 was ninety dollars so the total amount that
we're billing for kirsh baum for the outstanding retention is a hundred and thirty-five dollars
so when we build kirschbaum what will happen in the trial balance well we're
billing for all the remaining retention for all clients because kirschbaum is the only one left
so retention receivable will become zero but if retention receivable becomes zero
where does the money go the money increases accounts receivable and accounts receivable
increases to fifteen thousand six hundred seventy three dollars and then we will have the retention
in the details of the clients records as well as wiping it out of the trial balance
from the top left we click new invoice we advance the date to april 30th of 2022 the job is
kirshbaum southwoods road now notice we still have this remaining estimate here but that's not really
part of our example so we're not really going to pay attention to that we're going to choose the
final retention payment and the amount that we're going to put is the amount that's outstanding
135 dollars now we click save and close and don't worry about the number just click yes
okay good now when we click reports and we go to the trial balance the results are exactly
as what we expected retention receivable is now down to zero because we have billed
everyone and accounts receivable has increased by the amount of retention that we just build
and therefore made part of normal accounts receivable but most importantly let's look
at the customer reports because the previous retention did not show on the customer reports
but now this invoice will so if we click reports and we go to uh customer balance detail
or in this case transaction list by customer we can go down to the kirsh bound job and we can
see that this invoice is now part of the detailed records of the client you can learn everything you
need in quickbooks regarding contractor features by watching the full playlist that this video
is a part of you can just click the link in the comment field or under the first paragraph in
the description field and there's also links in the top right of the video as it plays
you