7 Understanding Retainage Calculations for JD Edwards EnterpriseOne Contract Billing

This chapter contains the following topics:


Note:

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

7.1 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

7.1.1 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

7.1.2 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.

7.1.3 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 × 0.15 = 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 × 0.10 = 7.80
003 275.00 × 0.10 = 27.50
004 455.00 × 0.10 = 45.50
007 750.00 × 0.10 = 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 × 0.05 = 5.00

7.1.4 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 Blank 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 Blank
000 003 284.63 9.63 275.00 27.50 RETN Blank
000 004 470.93 15.93 455.00 45.50 RETN Blank
000 005 284.63– 9.63– 275.00–   RETN Blank
000 006 134.55– 4.55– 130.00–   RETN Blank
000 007 776.25 26.25 750.00 75.00 RETN Blank
001 001 103.50 3.50 100.00 5.00 RETN Blank

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 .100 8 3,105.00–
000 .200 8 80.73–
000 .300 8 284.63–
000 .400 8 470.93–
000 .500 8 284.63
000 .600 8 134.55
000 .700 Blank 776.25–
001 .100 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–

7.1.5 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  

7.1.6 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    

7.2 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

7.2.1 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

7.2.2 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 Tax Amount Deferred
001 T and M 000   2,000.00 63.00 2,063.00 200.00 7.00
002 Lump Sum 000 12,000.00 1,000.00 31.50 1,031.50 100.00 3.50
Change Order Total     12,000.00 3,000.00 94.50 3,094.50 300.00 10.50
Contract Total     12,000.00 3,000.00 94.50 3,094.50 300.00 10.50

7.2.3 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 × 0.10 = 200.00
002 1,000.00 × 0.10 = 100.00

7.2.4 Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line (Net Amt) × (Tax Rate) = (Taxable Amt)
001 2,000.00 × 0.035 = 70.00
002 1,000.00 × 0.035 = 35.00

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

Billing Line (Tax Amt) × (Retainage percent) = (Deferred Tax)
001 70.00 × 0.10 = 7.00
002 35.00 × 0.10 = 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

7.2.5 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

7.2.6 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–

7.2.7 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  

7.2.8 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 1,863.00 1,863.00 A Application 1 Adjust. 0
RI 002 November 15, 2005 200.00 200.00 H Retainage
RI 003 November 15, 2005 7.00 7.00 H Retainage
RI 004 November 15, 2005 931.50 931.50 A Application 1 Adjust. 0
RI 005 November 15, 2005 100.00 100.00 H Retainage
RI 006 November 15, 2005 3.50 3.50 H Retainage
      3,105.00 3,105.00    

7.3 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

7.3.1 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

7.3.2 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

7.3.3 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 × 0.10 = 200.00
002 1,000.00 × 0.10 = 100.00

7.3.4 Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line (Net Amount) × (Tax Rate) = (Taxable Amount)
001 2,000.00 × 0.035 = 70.00
002 1,000.00 × 0.035 = 35.00

7.3.5 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  

7.3.6 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
.100   2,070.00–
.200 8 1,035.00–
.100 R 200.00
.200 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 Account
3,105.00– Revenue
300.00 Retainage

7.3.7 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  

7.3.8 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    

7.4 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

7.4.1 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

7.4.2 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 Tax Amount Deferred
001 T and M 000   2,000.00 63.00 2,063.00 200.00 7.00
002 Lump Sum 000 12,000.00 1,000.00 31.50 1,031.50 100.00 3.50
Change Order Total     12,000.00 3,000.00 94.50 3,094.50 300.00 10.50
Contract Total     12,000.00 3,000.00 94.50 3,094.50 300.00 10.50

7.4.3 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 × 0.10 = 200.00
002 1,000.00 × 0.10 = 100.00

7.4.4 Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line (Net Amount) × (Tax Rate) = (Taxable Amount)
001 2,000.00 × 0.035 = 70.00
002 1,000.00 × 0.035 = 35.00

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

Billing Line (Tax Amount) × (Retainage percent) = Deferred Tax
001 70.00 × 0.10 = 7.00
002 35.00 × 0.10 = 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

7.4.5 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  

7.4.6 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
.100   2,070.00–
.200 8 1,035.00–
.100 R 200.00
.100 R 7.00
.200 R 100.00
.200 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 Account
3,105.00– Revenue
300.00 Retainage
10.50 Deferred Tax

7.4.7 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  

7.4.8 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 1,863.00 1,863.00 A Application 1 Adjust. 0
RI 002 November 15, 2005 931.50 931.50 A Application 1 Adjust. 0
      2,794.50 2,794.50    

7.5 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

7.5.1 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

7.5.2 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 60.00
002 Lump Sum 000 12,000.00 6,000.00 210.00 6,210.00 300.00
Change Order Total     12,000.00 7,200.00 252.00 7,452.00 360.00
Contract Total     12,000.00 7,200.00 252.00 7,452.00 360.00

7.5.3 Retainage Calculations

This equation shows how the system calculated the percent complete:

(Net Amount) ÷ (Schedule of Values) = (Percent Complete)
7,200.00 ÷ 12,000.00= 0.6

This equation shows how the system calculated the total retainage:

(Schedule of Values) × (Retainage Completion) × (Retainage Percentage) = (Retainage Amount)
12,000.00 × 0.30 × 0.10 = 360.00

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 × 360.00 = 60.00
002 6,000.00 ÷ 7,200.00 × 360.00 = 300.00

7.5.4 Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line (Net Amount) × (Tax Rate) = (Taxable Amount)
001 1,200.00 × 0.035 = 42.00
002 6,000.00 × 0.035 = 210.00

7.6 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

7.6.1 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

7.6.2 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

7.6.3 Retainage Calculations

This equation shows how the system calculated the percent complete:

(Net Amount) ÷ (Schedule of Values) = (Percent Complete)
7,200.00 ÷ 17,000.00 = 0.423529411

This equation shows how the system calculated the total retainage:

(Schedule of Values) × (Retainage Completion) × (Retainage Percentage) = (Retainage Amount)
17,000.00 × 0.30 × 0.10 = 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

7.6.4 Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line (Net Amount) × (Tax Rate) = (Taxable Amount)
001 1,200.00 × 0.035 = 42.00
002 6,00.00 × 0.035 = 210.00

7.7 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

7.7.1 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

7.7.2 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

7.7.3 Retainage Calculations

This equation shows how the system calculated the percent complete:

(Net Amount) ÷ (Schedule of Values) = Percent Complete
7,200.00 ÷ 12,000.00 = 0.60

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 × 0.20 × 0.10 = 240.00
38 percent - 20 percent = 18 percent remaining to be calculated 12,000.00 × 0.18 × 0.15 = 324.00
Total 240.00 + 324.00 = 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

7.7.4 Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line (Net Amount) × (Tax Rate) = (Taxable Amount)
001 1,200.00 × 0.035 = 42.00
002 6,000.00 × 0.035 = 210.00

7.8 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

7.8.1 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

7.8.2 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

7.8.3 Retainage Calculations

This equation shows how the system calculated the percent complete:

(Net Amount) ÷ (Schedule of Values) = Percent Complete
7,200.00 ÷ 17,000.00 = 0.423529411

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 × 0.20 × 0.10 = 340.00
38 percent – 20 percent = 18 percent remaining to be calculated 17,000.00 × 0.18 × 0.15 = 459.00
Percent complete on the contract is 0.423529411 – 0.38 = 0.043529411 percent complete remaining to be calculated. 17,000.00 × 0.043529411 × 0.25 = 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 × 984.00 = 164.00
002 6,000.00 ÷ 7,200.00 × 984.00 = 820.00
Total 164,00 + 820.00 = 984.00

7.8.4 Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line (Net Amount) × (Tax Rate) = (Taxable Amount)
001 1,200.00 × 0.035 = 42.00
002 6,000.00 × 0.035 = 210.00

7.9 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

7.9.1 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
Billing Line 001 F RETN   S D1 = 3.5 percent
Billing Line 002 F RETN   S D1 = 3.5 percent

7.9.2 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

7.9.3 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 = 0.24
002 6,000.00 ÷ 12,000.00 = 0.50

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 × 0.20 ×.10 = 100.00
001 5,000.00 × 0.04 ×.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 × 0.10 = 240.00
38 percent – 20 percent = 18 percent remaining to be calculated 12,000.00 ×.18 × 0.15 = 324.00
50 - 0.38 (retainage completion already calculated) = 12 percent complete on billing line 12,000.00 ×.12 × 0.25 = 360.00
Total 240.00 + 324.00 + 360.00 = 924.00

7.9.4 Tax Calculations

These equations illustrate how the system calculated the taxable amounts:

Billing Line (Net Amount) × (Tax Rate) = (Taxable Amount)
001 1,200.00 × 0.035 = 42.00
002 6,000.00 × 0.035 = 210.00

7.10 Retainage with a Discount

This section discusses:

  • Example setup

  • Invoice generation

  • Tax calculations

  • Retainage calculations

7.10.1 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

7.10.2 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

7.10.3 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) × 0.035 = 42.88
002 (6,000.00 + 0.00) × 0.035 = 210.00

7.10.4 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) – (Retainage)) × (Discount Percent) = (Discount Amount)
001 (1,200.00 + 25.00 – 122.50) × .01 = 11.03
002 (6,000.00 + 00.00 – 600) × .01 = 54.00

7.11 Retainage on a Partially Complete Contract with a Discount

This section discusses:

  • Example setup

  • Invoice generation

  • Tax calculations

  • Retainage calculations

7.11.1 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

7.11.2 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 61.04
002 Lump Sum 000 12,000.00 6,000.00 210.00 6,210.00 298.96
Change Order Total     12,000.00 7,200.00 252.88 7,477.88 360.00
Contract Total     12,000.00 7,225.00 252.88 7,477.88 360.00

7.11.3 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

7.11.4 Retainage Calculations

This equation shows how the system calculated the percent complete:

(Net Amount) ÷ (Schedule of Values) = (Percent Complete)
7,200.00 ÷ 12,000.00= .6

This equation shows how the system calculated the retainage amount:

(Schedule of Values) × (Retainage Completion) × (Retainage Percentage) = (Retainage Amount)
12,000.00 × .30 × .10 = 360.00

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) × 360 = 61.04
002 (6,000.00 + 00.00) ÷ (7,200.00 + 25.00) × 360 = 298.96

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 = 11.64
002 (6,000.00 + 00.00 - 329.48) × .01 = 57.01