Understanding Retainage Calculations for JD Edwards EnterpriseOne Contract Billing

This section provides examples of:

Multiple retainage rules with retainage in A/R with no deferred taxes.
Retainage in A/R with deferred taxes.
Retainage in G/L with no deferred taxes.
Retainage in G/L with deferred taxes.
Retainage on a partially complete contract with no schedule of values on the T and M (time and material) billing line.
Retainage on a partially complete contract with a schedule of values on the T and M billing line.
Multiple percentages complete with no schedule of values on the T and M billing line.
Multiple percentages complete with a schedule of values on the T and M billing line.
Multiple percentages complete with retainage rules and with a schedule of values on the T and M billing line.
Retainage with a discount.
Retainage on a partially complete contract with a discount.

Note. For all examples in this chapter, the retainage rules are set up to calculate retainage on only cost billing line types.

Multiple Retainage Rules with Retainage in A/R with No Deferred Taxes

This section discusses:

Example setup
Invoice generation
Retainage calculations
Populated tables
A/R entries
Customer ledger inquiry

Example Setup

In this example, three retainage rules are set at change order levels 000 and 001 and at the billing line level. The calculation is based on 100 percent completion of the contract. The control flag is set to blank to create retainage in A/R with no deferred taxes.

Draw and rated draw billing lines are excluded from the calculations.

These retainage rules are set up in the Retainage Rules Table program (P5204):

Retainage Rule	Description
A	10 percent retainage until 100 percent complete.
B	15 percent retainage until 100 percent complete.
C	5 percent retainage until 100 percent complete.

This contract is set up in the Contract Master Revisions program (P5201):

Contract Part	Retainage Rule	Offset	Control Flag	Tax Explanation	Tax Rate/Area
Contract	A	RETN		S	D1 = 3.5 percent
Change Order 000, Billing Line 001	B	RETN		S	D1 = 3.5 percent
Change Order 001	C	RETN		S	D1 = 3.5 percent

Invoice Generation

Running Invoice Generation (R52121) produces these values:

Billing Line	Billing Line Descr.	Change Order	Schedule of Values	Net Amount Current	Tax Amount Current	Total Amount Current	Retainage Amount Current
001	Lump Sum	000	12,000.00	3,000.00	105.00	3,105.00	450.00
002	Units	000	15,000.00	78.00	2.73	80.73	7.80
003	Milestone	000	2,500.00	275.00	9.63	284.63	27.50
004	Progress	000	3,500.00	455.00	15.93	470.93	45.50
005	Draw	000	1,500.00–	275.00-	9.63–	284.63–
006	Rated Draw	000	1,000.00–	130.00–	4.55–	134.55–
007	T and M	000		750.00	26.25	776.25	75.00
Change Order 000 Total			30,500.00	4,153.00	145.36	4,298.36	605.80
001	Lump Sum	001	6,000.00	100.00	3.50	103.50	5.00
Change Order 001 Total			6,000.00	100.00	3.50	103.50	5.00
Contract Total			36,500.00	4,253.00	148.86	4,401.86	610.80

Note. The draw billing line is cross-referenced to a milestone billing line.

The rated draw billing line is cross-referenced to a progress billing line.

Retainage Calculations

This equation shows how the system calculated retainage amounts for change order 000, billing line 001:

Billing Line	(Net Amount) × (Retainage Table B) = (Retainage Amount)
001	3,000.00 × .15 = 450.00

These equations illustrate how the system calculated retainage amounts for change order 000, billing lines 002 through 004 and 007:

Billing Line	(Net Amount) × (Retainage Table A) = (Retainage Amount)
002	78.00 × .10 = 7.80
003	275.00 × .10 = 27.50
004	455.00 × .10 = 45.50
007	750.00 × .10 = 75.00

This equation shows how the system calculated retainage amounts for change order 001:

Billing Line	(Net Amount) × (Retainage Table C) = (Retainage Amount)
001	100.00 × .05 = 5.00

Populated Tables

This table lists fields in the Billing Detail Workfile table (F4812) that relate to retainage and that are populated when you run Invoice Generation (R52121) with Journal Generation (R48131):

COCH	OPIM	TCLS	JTAX	ITOL	ITXA	ITAM	RGLC
000	001	8	105.00	3,105.00	3,000.00	105.00	RETN
000	002	8	2.73	80.73	78.00	2.73	RETN
000	003	8	9.63	284.63	275.00	9.63	RETN
000	004	8	15.93	470.93	455.00	15.93	RETN
000	005	8	9.63–	284.63–	275.00–	9.63–	RETN
000	006	8	4.55–	134.55–	130.00–	4.55–	RETN
000	007	8	26.25	776.25	750.00	26.25	RETN
001	001	8	3.50	103.50	100.00	3.50	RETN

This table lists fields in the Invoice Summary Work File table (F4822) that relate to retainage and that are populated when you run Invoice Generation (R52121) with Journal Generation (R48131):

COCH	OPIM	THPD	STAM	ATXA	RTNG	RGLC	RTNR
000	001	3,105.00	105.00	3,000.00	450.00	RETN	B
000	002	80.73	2.73	78.00	7.80	RETN	A
000	003	284.63	9.63	275.00	27.50	RETN	A
000	004	470.93	15.93	455.00	45.50	RETN	A
000	005	284.63–	9.63–	275.00–		RETN	A
000	006	134.55–	4.55–	130.00–		RETN	A
000	007	776.25	26.25	750.00	75.00	RETN	A
001	001	103.50	3.50	100.00	5.00	RETN	C

This table lists fields in the Billing Detail Journal Workfile table (F48S910) that relate to retainage and that are populated when you run Invoice Generation (R52121) with Journal Generation (R48131):

COCH	LNID	TCLS	AA
000	001	8	3,105.00–
000	002	8	80.73–
000	003	8	284.63–
000	004	8	470.93–
000	005	8	284.63
000	006	8	134.55
000	007	8	776.25
001	001	8	103.50–

The AA field in the Summarized Journal Workfile table (F48S911) relates to retainage and is populated with 4,401.86– when you run Invoice Generation (R52121) with Journal Generation (R48131):

AA
4,401.86–

A/R Entries

The system creates these entries in the A/R ledger when you run Create A/R Entries (R48199) from the Batch Review program (P48221):

Account	Debit	Credit
Trade Accounts Receivable	3,791.06
Revenue		4,401.86–
Retainage	610.80

Customer Ledger Inquiry

This table shows the partial results of inquiring on the contract customer's account in the Customer Ledger Inquiry program (P03B2002) after running Create A/R Entries:

Doc Type	Pay Item	Invoice Date	Gross Amount	Open Amount	Pay Status	Remark
RI	001	November 15, 2005	3,105.00	3,105.00	A	Application 1 Adjust. 0
RI	002	November 15, 2005	450.00–	450.00–	A	Retainage
RI	003	November 15, 2005	450.00	450.00	H	Retainage
RI	004	November 15, 2005	80.73	80.73	A	Application 1 Adjust. 0
RI	005	November 15, 2005	7.80–	7.80–	A	Retainage
RI	006	November 15, 2005	7.80	7.80	H	Retainage
RI	007	November 15, 2005	284.63	284.63	A	Application 1 Adjust. 0
RI	008	November 15, 2005	27.50–	27.50–	A	Retainage
RI	009	November 15, 2005	27.50	27.50	H	Retainage
RI	010	November 15, 2005	470.93	470.93	A	Application 1 Adjust. 0
RI	011	November 15, 2005	45.50–	45.50–	A	Retainage
RI	012	November 15, 2005	45.50	45.50	H	Retainage
RI	013	November 15, 2005	284.63–	284.63–	A	Application 1 Adjust. 0
RI	014	November 15, 2005	134.55–	134.55–	A	Application 1 Adjust. 0
RI	015	November 15, 2005	776.25	776.25	A	Application 1 Adjust. 0
RI	016	November 15, 2005	75.00–	75.00–	A	Retainage
RI	017	November 15, 2005	75.00	75.00	H	Retainage
RI	018	November 15, 2005	103.50	103.50	A	Application 1 Adjust. 0
RI	019	November 15, 2005	5.00–	5.00–	A	Retainage
RI	020	November 15, 2005	5.00	5.00	H	Retainage
			4,401.86	4,401.86

Retainage in A/R with Deferred Taxes

This section discusses:

Example setup
Invoice generation
Retainage calculations
Tax calculations
The Journal Edit Register (R48300)
Populated tables
A/R entries
Customer ledger inquiry

Example Setup

In this example, only one retainage rule is set at the contract level. The calculation is based on 100 percent completion of the contract. The control flag is set to 1 to create retainage in A/R with deferred taxes.

This retainage rule is set up in the Retainage Rules Table program (P5204):

Retainage Rule	Description
A	10 percent Retainage ÷ 100 percent Complete

This contract is set up in the Contract Master Revisions program (P5201):

Contract Part	Retainage Rule	Offset	Control Flag	Tax Explanation	Tax Rate/Area
Contract	A	RETN	1	S	D1 - 3.5 percent

Invoice Generation

Running Invoice Generation (R52121) produces these values:

Billing Line	Billing Line Descr.	Change Order	Schedule of Values	Net Amount Current	Tax Amount Current	Total Amount Current	Retainage Amount Current
001	T and M	000		2,000.00	63.00	2,063.00	200.00
002	Lump Sum	000	12,000.00	1,000.00	31.50	1,031.50	100.00
Change Order Total			12,000.00	3,000.00	94.50	3,094.50	300.00
Contract Total			12,000.00	3,000.00	94.50	3,094.50	300.00

Retainage Calculations

These equations illustrate how the system calculated retainage amounts for change order 000:

Billing Line	(Net Amount) × (Retainage Table A) = (Retainage Amount)
001	2,000.00 × .10 = 200.00
002	1,000.00 × .10 = 100.00

Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line	(Net Amt) × (Tax Rate) = (Taxable Amt)
001	2,000.00 × .035 = 70.00
002	1,000.00 × .035 = 35.00

These equations illustrate how the system calculated the deferred tax amounts:

Billing Line	(Tax Amt) × (Retainage percent) = (Deferred Tax)
001	70.00 × .10 = 7.00
002	35.00 × .10 = 3.50

These equations illustrate how the system calculated the current tax amounts:

Billing Line	(Tax Amt) - (Deferred Amt) = (Tax Amt Current)
001	70.00 – 7.00 = 63.00
002	35.00 – 3.50 = 31.50

The Journal Edit Register (R48300)

The system creates these entries in the A/R ledger when you run the Journal Edit Register program (R48300):

Account	Debit	Credit	Offset Amt
Trade Accounts Receivable	2,749.50
Revenue		3,105.00–
Retainage	300.00		10.50

Populated Tables

This table lists fields in the Billing Detail Workfile table (F4812) that relate to retainage and that are populated during Invoice Generation with Invoice Journal Generation:

OPIM	TCLS	JTAX	ITOL	ITXA	ITAM	RGLC
001		70.00	2,070.00	2,000.00	70.00	RETN
002	8	35.00	1,035.00	1,000.00	35.00	RETN

This table lists fields in the Invoice Summary Work File table (F4822) that relate to retainage and that are populated during Invoice Generation with Invoice Journal Generation:

OPIM	THPD	STAM	ATXA	RTNG	RGLC	RCTL	DDTR
001	2,063.00	63.00	2,000.00	200.00	RETN	1	7.00
002	1,031.50	31.50	1,000.00	100.00	RETN	1	3.50

This table lists fields in the Billing Detail Journal Workfile table (F48S910) that relate to retainage and that are populated during Invoice Generation with Invoice Journal Generation:

LNID	TCLS	AA
001		2,070.00–
002	8	1,035.00–

The AA field in the Summarized Journal Workfile table (F48S911) relates to retainage and is populated with 3,105.00– during Invoice Generation with Invoice Journal Generation:

AA
3,105.00–
300.00

A/R Entries

The system creates these entries in the A/R ledger when you run Create A/R Entries (R48199) from the Batch Review program (P48221):

Account	Debit	Credit
Trade Accounts Receivable	2,794.50
Revenue		3,105.00–
Retainage	310.50

Customer Ledger Inquiry

This table shows the partial results of inquiring on the contract customer's account in the Customer Ledger Inquiry program (P03B2002) after running Create A/R Entries:

Doc Type	Pay Item	Invoice Date	Gross Amount	Open Amount	Pay Status	Remark
RI	001	November 15, 2005	2,063.00	2,063.00	A	Application 1 Adjust. 0
RI	002	November 15, 2005	200.00–	200.00–	A	Retainage
RI	003	November 15, 2005	200.00	200.00	H	Retainage
RI	004	November 15, 2005	7.00	7.00	H	Retainage
RI	005	November 15, 2005	1,031.50	1,031.50	A	Application 1 Adjust. 0
RI	006	November 15, 2005	100.00–	100.00–	A	Retainage
RI	007	November 15, 2005	100.00	100.00	H	Retainage
RI	008	November 15, 2005	3.50	3.50	H	Retainage
			3,105.00	3,105.00

Retainage in G/L with No Deferred Taxes

This section discusses:

Example setup
Invoice generation
Retainage calculations
Tax calculations
The Journal Edit Register (R48300)
Populated tables
A/R entries
Customer ledger inquiry

Example Setup

In this example, one retainage rule is set at the contract level. The calculation is based on 100 percent completion of the contract. The control flag is set to 2 to create retainage in G/L with no deferred taxes.

This retainage rule is set up in the Retainage Rules Table program (P5204):

Retainage Rule	Description
A	10 percent Retainage until 100 percent Complete

This contract is set up in the Contract Master Revisions program (P5201):

Contract Part	Retainage Rule	Offset	Control Flag	Tax Explanation	Tax Rate/Area
Contract	A	RETN	2	S	D1 = 3.5 percent

Invoice Generation

Running Invoice Generation (R52121) produces these values:

Billing Line	Billing Line Descr.	Change Order	Schedule of Values	Net Amount Current	Tax Amount Current	Total Amount Current	Retainage Amount Current
001	T and M	000		2,000.00	70.00	2,070.00	200.00
002	Lump Sum	000	12,000.00	1,000.00	35.00	1,035.00	100.00
Change Order Total			12,000.00	3,000.00	105.50	3,105.00	300.00
Contract Total			12,000.00	3,000.00	105.50	3,105.00	300.00

Retainage Calculations

These equations illustrate how the system calculated retainage amounts for change order 000:

Billing Line	(Net Amount) × (Retainage Table A) = (Retainage Amount)
001	2,000.00 × .10 = 200.00
002	1,000.00 × .10 = 100.00

Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line	(Net Amount) × (Tax Rate) = (Taxable Amount)
001	2,000.00 × .035 = 70.00
002	1,000.00 × .035 = 35.00

The Journal Edit Register (R48300)

The system creates these entries in the A/R ledger when you run the Journal Edit Register program (R48300):

Account	Debit	Credit
Trade Accounts Receivable	2,805.00
Revenue		3,105.00–
Retainage	300.00

Populated Tables

This table lists fields in the Billing Detail Workfile table (F4812) that relate to retainage and that are populated during Invoice Generation with Invoice Journal Generation:

OPIM	TCLS	JTAX	ITOL	ITXA	ITAM	RGLC
001		70.00	2,070.00	2,000.00	70.00	RETN
002	8	35.00	1,035.00	1,000.00	35.00	RETN
001	R		200.00–	200.00–		RETN
002	R		100.00–	100.00–		RETN

This tables list fields in the Invoice Summary Work File table (F4822) that relate to retainage and that are populated during Invoice Generation with Invoice Journal Generation:

OPIM	THPD	STAM	ATXA	RTNG	RGLC	RCTL
001	2,070.00	70.00	2,000.00	200.00	RETN	2
002	1,035.00	35.00	1,000.00	100.00	RETN	2

This table lists fields in the Billing Detail Journal Workfile table (F48S910) that relate to retainage and that are populated during Invoice Generation with Invoice Journal Generation:

LNID	TCLS	AA
001		2,070.00–
002	8	1,035.00–
001	R	200.00
002	R	100.00

This table lists the field in the Summarized Journal Workfile table (F48S911) that relates to retainage and that is populated during Invoice Generation with Invoice Journal Generation:

AA
3,105.00–

A/R Entries

The system creates these entries in the A/R ledger when you run Create A/R Entries (R48199) from the Batch Review program (P48221):

Account	Debit	Credit
Trade Accounts Receivable	2,805.00
Revenue		3,105.00–
Retainage	300.00

Customer Ledger Inquiry

This table shows the partial results of inquiring on the contract customer's account in the Customer Ledger Inquiry program (P03B2002) after running Create A/R Entries:

Doc Type	Pay Item	Invoice Date	Gross Amount	Open Amount	Pay Status	Remark
RI	001	November 15, 2005	2,070.00	2,070.00	A	Application 1 Adjust. 0
RI	002	November 15, 2005	200.00–	200.00–	A	Retainage
RI	003	November 15, 2005	1,035.00	1,035.00	A	Application 1 Adjust. 0
RI	004	November 15, 2005	100.00–	100.00–	A	Retainage
			2,805.00	2,805.00

Retainage in G/L with Deferred Taxes

This section discusses:

Example setup
Invoice generation
Retainage calculations
Tax calculations
The Journal Edit Register (R48300)
Populated tables
A/R entries
Customer ledger inquiry

Example Setup

In this example, one retainage rule is set at the contract level. The calculation is based on 100 percent completion of the contract. The control flag is set to 3 to create retainage in G/L with deferred taxes. The AAI for deferred taxes is RTVATD.

This retainage rule is set up in the Retainage Rules Table program (P5204):

Retainage Rule	Description
A	10 percent Retainage until 100 percent Complete

This contract is set up in the Contract Master Revisions program (P5201):

Contract Part	Retainage Rule	Offset	Control Flag	Tax Explanation	Tax Rate/Area
Contract	A	RETN	3	S	D1 = 3.5 percent

Invoice Generation

Running Invoice Generation (R52121) produces these values:

Billing Line	Billing Line Descr.	Change Order	Schedule of Values	Net Amount Current	Tax Amount Current	Total Amount Current	Retainage Amount Current
001	T and M	000		2,000.00	63.00	2,063.00	200.00
002	Lump Sum	000	12,000.00	1,000.00	31.50	1,031.50	100.00
Change Order Total			12,000.00	3,000.00	94.50	3,094.50	300.00
Contract Total			12,000.00	3,000.00	94.50	3,094.50	300.00

Retainage Calculations

These equations illustrate how the system calculated retainage amounts for change order 000:

Billing Line	(Net Amount) × (Retainage Table A) = (Retainage Amount)
001	2,000.00 × .10 = 200.00
002	1,000.00 × .10 = 100.00

Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line	(Net Amount) × (Tax Rate) = (Taxable Amount)
001	2,000.00 × .035 = 70.00
002	1,000.00 × .035 = 35.00

These equations illustrate how the system calculated the deferred tax amounts:

Billing Line	(Tax Amount ) × (Retainage percent) = Deferred Tax
001	70.00 × .10 = 7.00
002	35.00 × .10 = 3.50

These equations illustrate how the system calculated the current tax amounts:

Billing Line	(Tax Amount) – (Deferred Tax) = (Tax Amount Current)
001	70.00 – 7.00 = 63.00
002	35.00 – 3.50 = 31.50

The Journal Edit Register (R48300)

The system creates these entries in the A/R ledger when you run the Journal Edit Register program (R48300):

Account	Debit	Credit
Deferred Taxes	10.50
Accounts Receivable	2,794.50
Revenue		3,105.00–
Retainage	300.00

Populated Tables

This table lists fields in the Billing Detail Workfile table (F4812) that relate to retainage and that are populated during Invoice Generation with Invoice Journal Generation:

OPIM	TCLS	JTAX	ITOL	ITXA	ITAM	RGLC
001		70.00	2,070.00	2,000.00	70.00	RETN
002	8	35.00	1,035.00	1,000.00	35.00	RETN
001	R	7.00–	207.00–	200.00–	7.00–	RETN
002	R	3.50–	103.50–	100.00–	3.50–	RETN

This table lists fields in the Invoice Summary Work File table (F4822) that relate to retainage and that are populated during Invoice Generation with Invoice Journal Generation:

OPIM	THPD	STAM	ATXA	RTNG	RGLC	RCTL	DDTR
001	2,063.00	63.00	2,000.00	200.00	RETN	3	7.00
002	1,031.50	31.50	1,000.00	100.00	RETN	3	3.50

This table lists fields in the Billing Detail Journal Workfile table (F48S910) that relate to retainage and that are populated during Invoice Generation with Invoice Journal Generation:

LNID	TCLS	AA
001		2,070.00–
002	8	1,035.00–
001	R	200.00
001	R	7.00
002	R	100.00
002	R	3.50

This table lists a field in the Summarized Journal Workfile table (F48S911) that relates to retainage and that is populated during Invoice Generation with Invoice Journal Generation:

AA
3,105.00–
300.00
10.50

A/R Entries

The system creates these entries in the A/R ledger when you run Create A/R Entries (R48199) from the Batch Review program (P48221):

Account	Debit	Credit
Deferred Taxes	10.50
Trade Accounts Receivable	2,794.50
Revenue		3,105.00–
Retainage	300.00

Customer Ledger Inquiry

This table shows the partial results of inquiring on the contract customer's account in the Customer Ledger Inquiry program (P03B2002) after running Create A/R Entries:

Doc Type	Pay Item	Invoice Date	Gross Amount	Open Amount	Pay Status	Remark
RI	001	November 15, 2005	2,063.00	2,063.00	A	Application 1 Adjust. 0
RI	002	November 15, 2005	200.00–	200.00–	A	Retainage
RI	003	November 15, 2005	1,031.50	1,031.50	A	Application 1 Adjust. 0
RI	004	November 15, 2005	100.00–	100.00–	A	Retainage
			2,794.50	2,794.50

Retainage on a Partially Complete Contract with No Schedule of Values on the T and M Billing Line

This section discusses:

Example setup
Invoice generation
Retainage calculations
Tax calculations

Example Setup

In this example, one retainage rule is set at the contract level. The calculation is based on 30 percent completion of the contract. The control flag is set to blank to create retainage in A/R and no deferred taxes. The T and M line has no schedule of values.

This retainage rule is set up in the Retainage Rules Table program (P5204):

Retainage Rule	Description
D	10 percent Retainage until 30 percent Complete

This contract is set up in the Contract Master Revisions program (P5201):

Contract Part	Retainage Rule	Offset	Control Flag	Tax Explanation	Tax Rate/Area
Contract	D	RETN		S	D1 = 3.5 percent

Invoice Generation

Running Invoice Generation (R52121) produces these values:

Billing Line	Billing Line Descr.	Change Order	Schedule of Values	Net Amount Current	Tax Amount Current	Total Amount Current	Retainage Amount Current
001	T and M	000		1,200.00	42.00	1,242.00	66.00
002	Lump Sum	000	12,000.00	6,000.00	210.00	6,210.00	330.00
Change Order Total			12,000.00	7,200.00	252.00	7,452.00	396.00
Contract Total			12,000.00	7,200.00	252.00	7,452.00	396.00

Retainage Calculations

This equation shows how the system calculated the percent complete:

(Net Amount) ÷ ((Schedule of Values) + (Net Amount)) = (Percent Complete)
7,200.00 ÷ (12,000.00 + 1,200.00) = .545454

This equation shows how the system calculated the total retainage:

(Schedule of Values) × (Retainage Completion) × (Retainage Percentage) = (Retainage Amount)
13,200.00 × .30 × .10 = 396.00

This table shows how the system calculated the retainage for each billing line:

Billing Line	(Net Amount) ÷ (Total Net Amount) × (Retainage Amount) = Billing Line Retainage Amount
001	1,200.00 ÷ 7,200.00 × 396.00 = 66.00
002	6,000.00 ÷ 7,200.00 × 396.00 = 330.00

Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line	(Net Amount) × (Tax Rate) = (Taxable Amount)
001	1,200.00 × .035 = 42.00
002	6,000.00 × .035 = 210.00

Retainage on a Partially Complete Contract with a Schedule of Values on the T and M Billing Line

This section discusses:

Example setup
Invoice generation
Retainage calculations
Tax calculations

Example Setup

In this example, one retainage rule is set at the contract level. The calculation is based on 30 percent completion of the contract. The control flag is set to blank to create retainage in A/R with no deferred taxes. The T and M line has a schedule of values.

This retainage rule is set up in the Retainage Rules Table program (P5204):

Retainage Rule	Description
D	10 percent Retainage until 30 percent Complete

This contract is set up in the Contract Master Revisions program (P5201):

Contract Part	Retainage Rule	Offset	Control Flag	Tax Explanation	Tax Rate/Area
Contract	D	RETN		S	D1 = 3.5 percent

Invoice Generation

Running Invoice Generation (R52121) produces these values:

Billing Line	Billing Line Descr.	Change Order	Schedule of Values	Net Amount Current	Tax Amount Current	Total Amount Current	Retainage Amount Current
001	T and M	000	5,000.00	1,200.00	42.00	1,242.00	85.00
002	Lump Sum	000	12,000.00	6,000.00	210.00	6,210.00	425.00
Change Order Total			17,000.00	7,200.00	252.00	7,452.00	510.00
Contract Total			17,000.00	7,200.00	252.00	7,452.00	510.00

Retainage Calculations

This equation shows how the system calculated the percent complete:

(Net Amount) ÷ ((Schedule of Values) + (Net Amount)) = (Percent Complete)
7,200.00 ÷ 17,000.00 = .423529411

This equation shows how the system calculated the total retainage:

(Schedule of Values) × (Retainage Completion) × (Retainage Percentage) = (Retainage Amount)
17,000.00 × .30 × .10 = 510.00

This table shows how the system calculated the retainage for each billing line:

Billing Line	(Net Amount) ÷ (Total Net Amount) × (Retainage Amount) = (Billing Line Retainage Amount)
001	1,200.00 ÷ 7,200.00 × 510.00 = 85.00
002	6,000.00 ÷ 7,200.00 × 510.00 = 425.00

Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line	(Net Amount) × (Tax Rate) = (Taxable Amount)
001	1,200.00 × .035 = 42.00
002	6,00.00 × .035 = 210.00

Multiple Percentages Complete with No Schedule of Values on the T and M Billing Line

This section discusses:

Example setup
Invoice generation
Retainage calculations
Tax calculations

Example Setup

In this example, one retainage rule is set at the contract level. The calculation is based on two different percent completions on the contract. The control flag is set to blank to create retainage in A/R with no deferred taxes. The T and M line has no schedule of values.

This table shows how retainage rule E (Multi RETN Percentages on Completion) is set up in the Retainage Rules Table program (P5204):

Percent Retainage	Percent Complete
10 percent	20.00
15 percent	38.00

This contract is set up in the Contract Master Revisions program (P5201):

Contract Part	Retainage Rule	Offset	Control Flag	Tax Explanation	Tax Rate/Area
Contract	E	RETN		S	D1 = 3.5 percent

Invoice Generation

Running Invoice Generation (R52121) produces these values:

Billing Line	Billing Line Descr.	Change Order	Schedule of Values	Net Amount Current	Tax Amount Current	Total Amount Current	Retainage Amount Current
001	T and M	000		1,200.00	42.00	1,242.00	94.00
002	Lump Sum	000	12,000.00	6,000.00	210.00	6,210.00	470.00
Change Order Total			12,000.00	7,200.00	252.00	7,452.00	564.00
Contract Total			12,000.00	7,200.00	252.00	7,452.00	564.00

Retainage Calculations

This equation shows how the system calculated the percent complete:

(Net Amount) ÷ ((Schedule of Values) + (Net Amount)) = Percent Complete
7,200.00 ÷ 12,000.00 = .60

These equations illustrate how the system calculated the total retainage:

Percent Complete	(Schedule of Values) × (Retainage Completion) × (Retainage Percentage) = (Retainage Amount)
20 percent	12,000.00 × .20 × .10 = 240.00
38 percent - 20 percent = 18 percent remaining to be calculated	12,000.00 × .18 × .15 = 324.00
Total	340.00 + 459.00 = 564.00

This table shows how the system calculated the retainage for each billing line:

Billing Line	(Net Amount) ÷ (Total Net Amount) × (Retainage Amount) = (Billing Line Retainage Amount)
001	1,200.00 ÷ 7,200.00 ×564.00 = 94.00
002	6,000.00 ÷ 7,200.00 × 564.00 = 470.00

Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line	(Net Amount) × (Tax Rate) = (Taxable Amount)
001	1,200.00 × .035 = 42.00
002	6,000.00 × .035 = 210.00

Multiple Percentages Complete with a Schedule of Values on the T and M Billing Line

This section discusses:

Example setup
Invoice generation
Retainage calculations
Tax calculations

Example Setup

In this example, one retainage rule is set at the contract level. The calculation is based on three different completion percentages on the contract. The control flag is set to blank to create retainage in A/R with no deferred taxes. The T and M line has a schedule of values.

This table shows how retainage rule F (Multi RETN Percentages on Completion) is set up in the Retainage Rules Table program (P5204):

Percent Retainage	Percent Complete
10 percent	20.00
15 percent	38.00
25 percent	60.00

This contract is set up in the Contract Master Revisions program (P5201):

Contract Part	Retainage Rule	Offset	Control Flag	Tax Explanation	Tax Rate/Area
Contract	F	RETN		S	D1 = 3.5 percent

Invoice Generation

Running Invoice Generation (R52121) produces these values:

Billing Line	Billing Line Descr.	Change Order	Schedule of Values	Net Amount Current	Tax Amount Current	Total Amount Current	Retainage Amount Current
001	T and M	000	5,000.00	1,200.00	42.00	1,242.00	164.00
002	Lump Sum	000	12,000.00	6,000.00	210.00	6,210.00	820.00
Change Order Total			17,000.00	7,200.00	252.00	7,452.00	984.00
Contract Total			17,000.00	7,200.00	252.00	7,452.00	984.00

Retainage Calculations

This equation shows how the system calculated the percent complete:

(Net Amount) ÷ ((Schedule of Values) + (Net Amount)) = Percent Complete
7,200.00 ÷ 17,000.00 = .423529411

These equations illustrate how the system calculated the total retainage:

Percent Complete	(Schedule of Values) × (Retainage Completion) × (Retainage Percentage) = (Retainage Amount)
20 percent	17,000.00 × .20 × .10 = 340.00
38 percent – 20 percent = 18 percent remaining to be calculated	17,000.00 × .18 × .15 = 459.00
Percent complete on the contract is .423529411 – .38 = .043529411 percent complete remaining to be calculated.	17,000.00 × .043529411 × .25 = 185.00
Total	340.00 + 459.00 + 185.00 = 984.00

This table shows how the system calculated the retainage for each billing line:

Billing Line	(Net Amount) ÷ (Total Net Amount) × (Retainage Amount) = Billing Line Retainage Amount
001	1,200.00 ÷ 7,200.00 × 84.00 = 164.00
002	6,000.00 ÷ 7,200.00 × 984.00 = 820.00
Total	164,00 + 820.00 = 984.00

Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line	(Net Amount) × (Tax Rate) = (Taxable Amount)
001	1,200.00 × .035 = 42.00
002	6,000.00 × .035 = 210.00

Multiple Percentages Complete with Retainage Rules and with a Schedule of Values on the T and M Billing Line

This section discusses:

Example setup
Invoice generation
Retainage calculations
Tax calculations

Example Setup

In this example, a retainage rule is set both at the contract level and on both billing lines on the contract. The calculation is based on three different completion percentages on the contract. The control flag is set to blank to create retainage in A/R with no deferred taxes. The T and M line has a schedule of values.

This table shows how retainage rule F (Multi RETN Percentages on Completion) is set up in the Retainage Rules Table program (P5204):

Percent Retainage	Percent Complete
10 percent	20.00
15 percent	38.00
25 percent	60.00

This contract is set up in the Contract Master Revisions program (P5201):

Contract Part	Retainage Rule	Offset	Control Flag	Tax Explanation	Tax Rate/Area
Contract	F	RETN		S	D1 = 3.5 percent

Invoice Generation

Running Invoice Generation (R52121) produces these values:

Billing Line	Billing Line Descr.	Change Order	Schedule of Values	Net Amount Current	Tax Amount Current	Total Amount Current	Retainage Amount Current
001	T and M	000	5,000.00	1,200.00	42.00	1,242.00	130.00
002	Lump Sum	000	12,000.00	6,000.00	210.00	6,210.00	924.00
Change Order Total			17,000.00	7,200.00	252.00	7,452.00	1,054.00
Contract Total			17,000.00	7,200.00	252.00	7,452.00	1,054.00

Retainage Calculations

This table shows how the system calculated the percent complete for each billing line:

Billing Line	(Net Current Amount) ÷ (Schedule of Values) = Percent Complete
001	1,200.00 ÷ 5,000.00 = .24
002	6,000.00 ÷ 12,000.00 = .50

This table shows how the system calculated the retainage for billing line 001:

Billing Line	(Schedule of Values) × (Percent Complete) × (Retainage Percentage) = Billing Line Retainage Amount
001	5,000.00 × .20 ×.10 = 100.00
001	5,000.00 × .04 ×.15 = 30.00
Total	100.00 + 30.00 = 130.00

This table shows how the system calculated the retainage for billing line 002:

Percent Complete	(Schedule of Values) × (Percent Complete) × (Retainage Percentage) = Billing Line Retainage Amount
20 percent	12,000.00 ×.20 × .10 = 240.00
38 percent – 20 percent = 18 percent remaining to be calculated	12,000.00 ×.18 × .15 = 324.00
50 - .38 (retainage completion already calculated) = 12 percent complete on billing line	12,000.00 ×.12 × .25 = 360.00
Total	240.00 + 324.00 + 360.00 = 924.00

Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line	(Net Amount) × (Tax Rate) = (Taxable Amount)
001	1,200.00 × .035 = 42.00
002	6,000.00 × .035 = 210.00

Retainage with a Discount

This section discusses:

Example setup
Invoice generation
Tax calculations
Retainage calculations

Example Setup

In this example, payment terms with discounts and one retainage rule are set at the contract level. The calculation is based on 100 percent completion of the contract. The control flag is set to blank to create retainage in A/R with no deferred taxes. The T and M line has no schedule of values, but does have a markup of 25.00 on the T and M line.

This retainage rule is set up in the Retainage Rules Table program (P5204):

Retainage Rule	Description
A	10 percent Retainage until 100 percent Complete

This contract is set up in the Contract Master Revisions program (P5201):

Contract Part	Retainage Rule	Offset	Control Flag	Tax Explanation	Tax Rate/Area	Payment Terms
Contract	A	RETN		S	D1 = 3.5 percent	1/10 Net 30

Invoice Generation

Running Invoice Generation (R52121) produces these values:

Billing Line	Billing Line Descr.	Change Order	Schedule of Values	Net Amount Current	Tax Amount Current	Total Amount Current	Retainage Amount Current
001	T and M	000		1,225.00	42.88	1,267.88	122.50
002	Lump Sum	000	12,000.00	6,000.00	210.00	6,210.00	600.00
Change Order Total			12,000.00	7,200.00	252.88	7,477.88	722.50
Contract Total			12,000.00	7,225.00	252.88	7,477.88	722.50

Tax Calculations

This table shows how the system calculated the taxable amounts:

Billing Line	(Cost Amount) + (Markup Amount) × (Tax Rate) = (Taxable Amount)
001	1,200.00 + 25.00 × .035 = 42.88
002	6,000.00 + .00 × .035 = 210.00

Retainage Calculations

This table shows how the system calculated the retainage for each billing line:

Billing Line	(Cost Amount) + (Markup) × (Retainage Amount) = (Billing Line Retainage Amount)
001	1,200.00 + 25.00 × .10 = 122.50
002	6,000.00 + 00.00 × .10 = 600.00

This table shows how the system calculated the discount for each billing line:

Billing Line	(Cost Amount) + (Markup) × (Discount Percent) = (Discount Amount)
001	1,200.00 + 25.00 × .01 = 11.03
002	6,000.00 + 00.00 × .01 = 54.00

Retainage on a Partially Complete Contract with a Discount

This section discusses:

Example setup
Invoice generation
Tax calculations
Retainage calculations

Example Setup

In this example, payment terms with discounts and one retainage rule are set at the contract level. The calculation is based on 30 percent completion of the contract. The control flag is set to blank to create retainage in A/R with no deferred taxes. The T and M line has no schedule of values, but has a markup of 25.00 on the T and M line.

This retainage rule is set up in the Retainage Rules Table program (P5204):

Retainage Rule	Description
D	10 percent Retainage until 30 percent Complete

This contract is set up in the Contract Master Revisions program (P5201):

Contract Part	Retainage Rule	Offset	Control Flag	Tax Explanation	Tax Rate/Area	Payment Terms
Contract	D	RETN		S	D1 = 3.5 percent	1/10 Net 30

Invoice Generation

Running Invoice Generation (R52121) produces these values:

Billing Line	Billing Line Descr.	Change Order	Schedule of Values	Net Amount Current	Tax Amount Current	Total Amount Current	Retainage Amount Current
001	T and M	000		1,225.00	42.88	1,267.88	67.49
002	Lump Sum	000	12,000.00	6,000.00	210.00	6,210.00	329.48.55
Change Order Total			12,000.00	7,200.00	252.88	7,477.88	396.75
Contract Total			12,000.00	7,225.00	252.88	7,477.88	396.75

Tax Calculations

This table shows how the system calculated the taxable amounts:

Billing Line	(Cost Amount) + (Markup Amount) × (Tax Rate) = (Taxable Amount)
001	1,200.00 + 25.00 × .035 = 42.88
002	6,000.00 + .00 × .035 = 210.00

Retainage Calculations

This equation shows how the system calculated the percent complete:

(Net Amount) ÷ ((Schedule of Values) + (Net Amount)) = (Percent Complete)
7,200.00 ÷ (12,000.00 + 1,225.00) = .54442344

This equation shows how the system calculated the retainage amount:

((Schedule of Values) + (Discount)) × (Retainage Completion) × (Retainage Percentage) = (Retainage Amount)
(13,200.00 + 25.00) × .30 × .10 = 396.75

This table shows how the system calculated the retainage for each billing line:

Billing Line	((Net Amount) + (Markup)) ÷ ((Total Net Amount) + (Markup)) × (Total Retainage Amount) = (Billing Line Retainage Amount)
001	(1,200.00 + 25.00) ÷ (7,200.00 + 25.00) × 396.75 = 67.27
002	(6,000.00 + 00.00) ÷ (7,200.00 + 25.00) × 396.75 = 329.48

This table shows how the system calculated the discount for each billing line:

Billing Line	((Cost Amount) + (Markup) - (Retainage)) × (Discount Percent) = (Discount Amount)
001	(1,200.00 + 25.00 - 67.27) × .01 = 11.58
002	(6,000.00 + 00.00 - 329.48) × .01 = 56.71