20 Understanding Subcontractor Retention for Subcontract Management

This chapter contains the following topics:

• Section 20.1, "Subcontractor Retention for Subcontract Management"

20.1 Subcontractor Retention for Subcontract Management

Subcontract retention is a percentage of a committed amount that is held until a specified date after the order is complete. Retention processing applies to ongoing projects and only applies to services lines. Subcontract retention is not applicable to inventory based purchase order lines where the full cost of the product is due upon receipt of the product.

Note: In some industries, subcontract retention may be called retainage. Thus, the terms retainage and retention may be used interchangeably.

U.S. federal government requirements prohibit the billing of unpaid expenses. In the JD Edwards EnterpriseOne system, you use retainage functionality to automate the recording of retention to nonbillable accounts for transactions with an inventory interface of A and B only. The system uses financial automatic accounting instruction (AAI) PCNBRT for retainage processing during voucher match. To enable the subcontract retention functionality in the JD Edwards EnterpriseOne system, you must:

• Select the Non-Billable Retainage option on the Line Type Constants Revisions form (W40205B).

  New journal ledger entries are created if this subcontract retention option is selected.

• Perform two-way voucher match.

  
  

  Note: If you want to perform three-way voucher match, you must select the Expense At Voucher option on the Line Type Constants Revisions form (W40205B).

  
  

• Ensure that the retainage amount is not zero.

Before entering an order that includes retention, select the Display Retainage Indicator processing option on the Display tab of the Subcontract Order Entry program (P4310). When you enter an order that has retainage, select the Retainage Indicator check box on the order header form. This field notifies the AP clerk during the voucher match process to double-check the invoice from the supplier to see if there was an amount retained on the invoice. The Retainage Indicator check box can be used with or without the Retainage Percentage field.

You can display the Retainage Indicator field in the detail grid on the Voucher Match form by setting the Display Retainage Indicator processing option on the Display tab of the Voucher Match program (P4314). The system retrieves the retainage indicator setting from the order header. You also set the processing options on the Retainage tab of the P4314 program.

When performing voucher match, you can relieve commitments to billable and nonbillable accounts. The setting of the Non-Billable Retainage option on the Line Type Constants Revisions form determines whether the system uses the new nonbillable automatic accounting instruction (AAI) for retainage. Select this option to specify that the system use the financial AAI nonbillable retainage (PCNBRT) for retainage processing during voucher match.

See Also: "JD Edwards EnterpriseOne Procurement System Setup" in the JD Edwards EnterpriseOne Applications Subcontract Management Implementation Guide. "AAI Tables for the Financial System" in the JD Edwards EnterpriseOne Applications Subcontract Management Implementation Guide. "Setting Up Suppliers" in the JD Edwards EnterpriseOne Applications Subcontract Management Implementation Guide. "Understanding Subcontract Orders" in the JD Edwards EnterpriseOne Applications Subcontract Management Implementation Guide. "Setting Processing Options for Enter Subcontract Orders (P4310)" in the JD Edwards EnterpriseOne Applications Subcontract Management Implementation Guide. "Entering Order Header Information" in the JD Edwards EnterpriseOne Applications Procurement Management Implementation Guide. "Understanding Subcontract Vouchers" in the JD Edwards EnterpriseOne Applications Subcontract Management Implementation Guide. " Setting Processing Options for Voucher Match (P4314)" in the JD Edwards EnterpriseOne Applications Subcontract Management Implementation Guide. "Processing Retainage" in the JD Edwards EnterpriseOne Applications Subcontract Management Implementation Guide.