Understanding Retainage Setup for Advanced Contract Billing Contracts

Retainage is the amount of payment that the customer might withhold to ensure satisfactory contract performance. For example, you might agree to 10 percent retainage on the amount that you bill the customer. To specify how the system calculates retainage, you first set up retainage rules. You set up retainage rules using the Retainage Rules Table program (P5204).

After you set up retainage rules, you assign them to funding level contracts in the Create/Edit Advanced Contracts program (P52G01M). The system assigns the retainage rule from the funding level contract to all billing lines for that funding level contract. For some contracts, you might have different terms for some billing lines. In this case, you can change the retainage rule at the billing line level.