Accounts Receivable Holdback

Many job contracts include holdback. When you create a receivable invoice, Sage 100 Contractor withholds holdback at the rate specified in the job file. If you do not set up a default rate in the job file, you can withhold a flat amount on each individual invoice.

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 as 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 only need to release the holdback that has been withheld. You can release holdback on each invoice individually, or you can release the holdback for the entire job at one time. Having released the holdback, you can then send the client a statement reflecting the amount that is due your company.