About unitary billing holdbacks

Many job contracts include holdbacks. While you include the holdback on the billings, payment is not due until you complete the project or change the holdback rates. In the Unitary Billing Setup window, you can set the holdback rate.

When you calculate a unitary bill the first time, Sage 100 Contractor inserts the holdback rate for completed work in the Holdback Rate column for all line items, then it calculates the holdback. If the holdback rate differs between line items, you can enter the individual rates in the appropriate Holdback Rate cells. If you leave a Holdback Rate cell blank, Sage 100 Contractor does not compute the holdback for that particular line item.

To change the holdback rate for the entire project, first change the rate in the Holdback Rate box in the Unitary Billing Setup window. Then change the rates in the Holdback Rate column and recalculate the unitary bill. If you lower the rate of holdback, you effectively release a portion of the holdback previously withheld.

Posting an invoice declares the gross amount of the invoice as income. However, a percentage of the gross amount is retained as holdback, so the client is actually billed for the net amount (gross invoice amount – holdback = net invoice amount). Therefore, the holdback is already declared income but is not yet due. Consequently, Sage 100 Contractor does not include holdbacks in the invoice aging, and does not apply finance charges to it.

When you are ready to bill the client for a holdback, create a holdback invoice in 3-2 Receivable Invoices/Credits. The holdback has already been declared income, so you release the holdback in unitary billing by changing the holdback rates and then create the holdback invoice in accounts receivable. You can create holdback invoices individually or for the entire job at one time. The next application for payment will include the released holdback. You can then send the client a statement reflecting the amount that is due your company.