About progress billing holdback

Many job contracts include holdback. In the Progress Billing Setup window, you can set up rates.

When you calculate a progress bill for the first time, Sage 100 Contractor inserts the holdback rate for completed work in the Holdback Rate column for all line items. If certain line items require different rates of holdback, type the rates in the appropriate Holdback Rate cells. If you leave a Holdback Rate cell blank, Sage 100 Contractor will not compute holdback for that particular line item. You can then recalculate the holdback for the application.

If you want to withhold holdback for stored materials, type the rate in the Material Rate box. When you enter costs for stored materials in the Current Stored column, Sage 100 Contractor calculates the holdback using the rate in the Material Rate box from the Progress Billing Setup window.

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

When you are ready to bill the client for holdback, it is not necessary to create a new invoice. The holdback has already been declared income, so you simply release the holdback in accounts receivable. You can release holdback on each invoice individually, or you can release the holdback for the entire job at one time. You can then send the client a statement reflecting the amount that is due your company.