# My customer holds back a percentage of every progress billing until the job is finished — how do I bill and track that retainage?

- **[United States · construction contractors]** Retainage is the practice of withholding a percentage of each progress billing until the construction project is substantially complete. → [CG-MCE-046#S01](#s-CG-MCE-046-S01)
- **[United States (federal): construction contracts financed or administered under U.S. Department of Agriculture Rural Development / Farm Service Agency programs · Parties to a construction contract using USDA Form RD 1924-18 — owner, contractor, architect or engineer, and the Agency]** On this form the partial payment estimate is presented as numbered lines in which Work Completed (line 4) and Stored Materials (line 5) add to a Subtotal (line 6), and the Amount Due (line 9) is that Subtotal less Retainage (line 7) and less Previous Payments (line 8); Work Completed, Stored Materials and Retainage each carry an asterisk. → [CG-MCE-046#S08](#s-CG-MCE-046-S08)
- **[United States · construction contractors]** Contractors must record retainage as a separate receivable, because the retained amount has been earned but has not yet been collected. → [CG-MCE-046#S03](#s-CG-MCE-046-S03)
- **[United States · construction contractors]** Withholding retainage affects cash flow management, working capital and contract asset balances, and requires detailed tracking and reconciliation throughout the project lifecycle; the article does not state the mechanics of that tracking or reconciliation. → [CG-MCE-046#S29](#s-CG-MCE-046-S29)
- **[United States — U.S. Federal Government procurement (Federal Acquisition Regulation) · Contractors under U.S. Government fixed-price construction contracts that include FAR clause 52.232-5]** When the work is substantially complete, the Contracting Officer may retain, out of previously withheld funds and future progress payments, the amount the Contracting Officer considers adequate for protection of the Government, and must release to the Contractor all the remaining withheld funds. → [CG-MCE-046#S42](#s-CG-MCE-046-S42)

## What this page establishes

- What retainage is, and what it does to an amount you have already billed — Established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.)
- What the progress billing itself has to show — Not established (Required authority: high quality professional secondary reference. Highest achieved: official platform documentation, primary regulator or government.)
- Where the withheld amount sits in your books, apart from ordinary receivables — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.)
- What decides when the withheld portion becomes revenue — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.)
- Tracking the retained balance to its job, its contract and its release — Partly established
- The documents that support the balance from contract term to release — Not established
- Earned and billed, but not yet collectible — Established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.)
- Separating the amount billed, the amount withheld and the amount due now — Not established (Required authority: high quality professional secondary reference. Highest achieved: official platform documentation, primary regulator or government.)
- Keeping retainage out of your ordinary trade receivables — Established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.)
- Revenue timing follows performance, not what you are allowed to collect — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.)
- Why the retained balance should never be aged or chased as overdue — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.)
- Tracking the balance by job and by customer — Not established (Required authority: high quality professional secondary reference. Highest achieved: official platform documentation.)
- Getting it released: the trigger, the document and the tie back to what was withheld — Partly established
- Collecting the release and proving the job's retained balance reached nil — Not established (Required authority: high quality professional secondary reference. Highest achieved: official platform documentation, primary regulator or government.)
- Reconciling your retained balance against the contract and the customer's records — Partly established
- What to keep for the contract, every billing that withheld, and the release — Not established (Required authority: high quality professional secondary reference. Highest achieved: official platform documentation, primary regulator or government.)
- When the retained amount will not come back in full — Not established

## What retainage is, and what it does to an amount you have already billed
<a id="need-CG-MCE-046-C1"></a>

- <a id="s-CG-MCE-046-S01"></a>Retainage is the practice of withholding a percentage of each progress billing until the construction project is substantially complete. _(jurisdiction: United States, entity_scope: construction contractors, conditions: long-term / project-based construction contracts)_ `CG-MCE-046#S01`
  > “Retainage accounting addresses the practice of withholding a percentage of each progress billing until a construction project is substantially complete.” — [AccountingTools, Inc. (author Steven Bragg) — Construction Accounting Explained](https://www.accountingtools.com/articles/construction-accounting.html), 2026-03-21; Section "Retainage Accounting", under the heading "Construction Accounting vs. Regular Accounting: The Key Differences". Verified 2026-09-09.

- <a id="s-CG-MCE-046-S02"></a>The amount retained from progress billings serves as assurance of the contractor's performance and of the quality of the work. _(jurisdiction: United States, entity_scope: construction contractors)_ `CG-MCE-046#S02`
  > “The retained amount serves as assurance of performance and quality.” — [AccountingTools, Inc. (author Steven Bragg) — Construction Accounting Explained](https://www.accountingtools.com/articles/construction-accounting.html), 2026-03-21; Section "Retainage Accounting", under the heading "Construction Accounting vs. Regular Accounting: The Key Differences". Verified 2026-09-09.

- <a id="s-CG-MCE-046-S03"></a>Contractors must record retainage as a separate receivable, because the retained amount has been earned but has not yet been collected. _(jurisdiction: United States, entity_scope: construction contractors)_ `CG-MCE-046#S03`
  > “Contractors must record retainage as a separate receivable, since it has been earned but not yet collected.” — [AccountingTools, Inc. (author Steven Bragg) — Construction Accounting Explained](https://www.accountingtools.com/articles/construction-accounting.html), 2026-03-21; Section "Retainage Accounting", under the heading "Construction Accounting vs. Regular Accounting: The Key Differences". Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-046-S04"></a>A receivable is an entity’s right to consideration that is unconditional, and a right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. _(jurisdiction: United States — U.S. GAAP (FASB Accounting Standards Codification), nongovernmental entities, entity_scope: Entities applying U.S. GAAP to contracts with customers within the scope of Topic 606 (606-10-15-1: the guidance in Subtopic 606-10 applies to all entities; exceptions listed in 606-10-15-2), accounting_basis: U.S. GAAP accrual accounting (FASB Accounting Standards Codification), effective_from: Annual reporting periods beginning after December 15, 2016 for a public business entity, a not-for-profit entity with publicly traded/listed/quoted securities or that is a conduit bond obligor, and an employee benefit plan filing with the SEC; annual reporting periods beginning after December 15, 2017 (interim periods within annual periods beginning after December 15, 2018) for all other entities (606-10-65-1))_ `CG-MCE-046#S04`
  > “606-10-45-4 A receivable is an entity’s right to consideration that is unconditional.
A right to consideration is unconditional if only the passage of time is required
before payment of that consideration is due.” — [Financial Accounting Standards Board (FASB) — Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) — Section A: Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40)](https://storage.fasb.org/ASU%202014-09_Section%20A.pdf), 2014-05; Section A — Amendments to Subtopic 606-10, “Other Presentation Matters > General”, paragraph 606-10-45-4 (printed page 42). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._

## Earned and billed, but not yet collectible
<a id="need-CG-MCE-046-P1"></a>

- See above: Retainage is the practice of withholding a percentage of each progress billing until the construction project is substantially complete. ([CG-MCE-046#S01](#s-CG-MCE-046-S01))

- See above: The amount retained from progress billings serves as assurance of the contractor's performance and of the quality of the work. ([CG-MCE-046#S02](#s-CG-MCE-046-S02))

- See above: Contractors must record retainage as a separate receivable, because the retained amount has been earned but has not yet been collected. ([CG-MCE-046#S03](#s-CG-MCE-046-S03))

- See above: A receivable is an entity’s right to consideration that is unconditional, and a right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. ([CG-MCE-046#S04](#s-CG-MCE-046-S04))

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._

## What the progress billing itself has to show
<a id="need-CG-MCE-046-C2"></a>

- <a id="s-CG-MCE-046-S06"></a>This source states that a progress billing contains information not found on a standard invoice, listing the adjusted total contract amount, the cumulative amount of progress billings to date, the percentage of completion of the project, and the total amount remaining to be billed; the source does not state that this list is exhaustive, and it does not list a withheld amount or an amount currently due among these items. _(jurisdiction: United States (publisher is a US accounting CPE/reference publisher; the article itself states no jurisdictional limit), entity_scope: Progress billings generally; the source names no industry or entity restriction for this list, conditions: Descriptive of what a progress billing contains; the source states no mandatory content requirement; List presented by the source without any statement that it is complete or exclusive)_ `CG-MCE-046#S06`
  > “A progress billing contains the following unique information that is not found on a standard invoice:
 The adjusted total contract amount
 The cumulative amount of progress billings to date
 The percentage of completion of the project
 The total amount remaining to be billed” — [AccountingTools, Inc. (author Steven Bragg) — Progress billing definition](https://www.accountingtools.com/articles/progress-billing), 2026-06-10; Section "Contents of a Progress Billing", lead-in sentence and its bulleted list (TEXT.txt lines 100-104). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S07"></a>This source states that customers sometimes build a withheld percentage of the total contract into the calculation of progress billings, and that this withheld percentage is not billed until the project is complete. _(jurisdiction: United States (publisher is a US accounting CPE/reference publisher; the article itself states no jurisdictional limit), entity_scope: Customer-contractor project billing arrangements where the customer builds in a withheld percentage, conditions: Hedged as something customers do 'sometimes', not as a general or required practice; Withholding is expressed as a percentage of the total contract; Non-billing of the withheld amount runs until the project is complete)_ `CG-MCE-046#S07`
  > “Customers sometimes build into the calculation of progress billings a withheld percentage of the total contract, which is not billed until the project is complete.” — [AccountingTools, Inc. (author Steven Bragg) — Progress billing definition](https://www.accountingtools.com/articles/progress-billing), 2026-06-10; Section "Contents of a Progress Billing", paragraph following the bulleted list, first sentence (TEXT.txt line 105). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S08"></a>On this form the partial payment estimate is presented as numbered lines in which Work Completed (line 4) and Stored Materials (line 5) add to a Subtotal (line 6), and the Amount Due (line 9) is that Subtotal less Retainage (line 7) and less Previous Payments (line 8); Work Completed, Stored Materials and Retainage each carry an asterisk. _(jurisdiction: United States (federal): construction contracts financed or administered under U.S. Department of Agriculture Rural Development / Farm Service Agency programs, entity_scope: Parties to a construction contract using USDA Form RD 1924-18 — owner, contractor, architect or engineer, and the Agency, conditions: Applies to partial payment estimates submitted on USDA Form RD 1924-18 (Rev. 6-97); Form displays OMB control numbers 0575-0042 and 0575-0189, stated to expire 3/31/2026)_ `CG-MCE-046#S08`
  > “4. Work Completed*
5. Stored Materials*
6. Subtotal (4 + 5)
7. Retainage*
8. Previous Payments
9. Amount Due (6-7-8)” — [U.S. Department of Agriculture, Rural Development / Farm Service Agency — Form RD 1924-18, Partial Payment Estimate](https://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD1924-18.PDF), 1997-06; Front page, ESTIMATE block, numbered lines 4-9. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S09"></a>The contractor certifies, to the best of their knowledge, information and belief, that the work covered by the payment estimate has been completed in accordance with the contract documents, that the contractor has paid all amounts for work covered by previous payment estimates for which payment was received from the owner, and that the current payment shown on the estimate is now due. _(jurisdiction: United States (federal): construction contracts financed or administered under U.S. Department of Agriculture Rural Development / Farm Service Agency programs, entity_scope: Parties to a construction contract using USDA Form RD 1924-18 — owner, contractor, architect or engineer, and the Agency, conditions: Applies to partial payment estimates submitted on USDA Form RD 1924-18 (Rev. 6-97); Form displays OMB control numbers 0575-0042 and 0575-0189, stated to expire 3/31/2026)_ `CG-MCE-046#S09`
  > “The undersigned Contractor certifies that to the best of their
knowledge, information and belief the work covered by this
payment estimate has been completed in accordance with
the contract documents, that all amounts have been paid by
the contractor for work for which previous payment estimates
was issued and payments received from the owner, and that
current payment shown herein is now due.” — [U.S. Department of Agriculture, Rural Development / Farm Service Agency — Form RD 1924-18, Partial Payment Estimate](https://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD1924-18.PDF), 1997-06; Front page, CONTRACTOR'S CERTIFICATION block. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S10"></a>Posting an invoice declares its gross amount as income, while a percentage of that gross amount is withheld as retention, so the client is billed the net amount, computed as gross invoice amount minus retention. _(jurisdiction: United States (Sage 100 Contractor U.S. product help, /US/ edition), entity_scope: Users of Sage 100 Contractor billing job contracts that include retention, platform: Sage 100 Contractor, platform_edition: Version 2023, published May 17, 2023 (U.S. help, 25_1 path))_ `CG-MCE-046#S10`
  > “Posting an invoice declares the gross amount of the invoice as income. However, a percentage of the gross amount is withheld as retention , so the client is actually billed for the net amount (gross invoice amount – retention = net invoice amount).” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — About progress billing retention](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/About_progress_billing_retention.htm), 2023-05-17; Body, paragraph 6 under heading "About progress billing retention" (TEXT.txt line 24). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S11"></a>Retention is included on billings, but payment of it is not due until the project is completed. _(jurisdiction: United States (Sage 100 Contractor U.S. product help, /US/ edition), entity_scope: Users of Sage 100 Contractor billing job contracts that include retention, platform: Sage 100 Contractor, platform_edition: Version 2023, published May 17, 2023 (U.S. help, 25_1 path))_ `CG-MCE-046#S11`
  > “While you include retention on billings, payment is not due until you complete the project.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — About progress billing retention](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/About_progress_billing_retention.htm), 2023-05-17; Body, paragraph 6 under heading "About progress billing retention" (TEXT.txt line 24). Verified 2026-09-09.

_Not established from an authoritative source._

_Required authority: high quality professional secondary reference. Highest achieved: official platform documentation, primary regulator or government._

## Separating the amount billed, the amount withheld and the amount due now
<a id="need-CG-MCE-046-P2"></a>

- See above: This source states that a progress billing contains information not found on a standard invoice, listing the adjusted total contract amount, the cumulative amount of progress billings to date, the percentage of completion of the project, and the total amount remaining to be billed; the source does not state that this list is exhaustive, and it does not list a withheld amount or an amount currently due among these items. ([CG-MCE-046#S06](#s-CG-MCE-046-S06))

- See above: This source states that customers sometimes build a withheld percentage of the total contract into the calculation of progress billings, and that this withheld percentage is not billed until the project is complete. ([CG-MCE-046#S07](#s-CG-MCE-046-S07))

- See above: On this form the partial payment estimate is presented as numbered lines in which Work Completed (line 4) and Stored Materials (line 5) add to a Subtotal (line 6), and the Amount Due (line 9) is that Subtotal less Retainage (line 7) and less Previous Payments (line 8); Work Completed, Stored Materials and Retainage each carry an asterisk. ([CG-MCE-046#S08](#s-CG-MCE-046-S08))

- See above: The contractor certifies, to the best of their knowledge, information and belief, that the work covered by the payment estimate has been completed in accordance with the contract documents, that the contractor has paid all amounts for work covered by previous payment estimates for which payment was received from the owner, and that the current payment shown on the estimate is now due. ([CG-MCE-046#S09](#s-CG-MCE-046-S09))

- See above: Posting an invoice declares its gross amount as income, while a percentage of that gross amount is withheld as retention, so the client is billed the net amount, computed as gross invoice amount minus retention. ([CG-MCE-046#S10](#s-CG-MCE-046-S10))

- <a id="s-CG-MCE-046-S12"></a>This source defines a progress billing as an invoice intended to obtain payment from a customer for the portion of a project completed to date. _(jurisdiction: United States (publisher is a US accounting CPE/reference publisher; the article itself states no jurisdictional limit), entity_scope: Sellers/contractors invoicing customers on projects; the source names no entity restriction, conditions: Definitional statement only; the source states no requirement as to invoice content or format)_ `CG-MCE-046#S12`
  > “A progress billing is an invoice that is intended to obtain payment from a customer for that portion of a project that has been completed to date.” — [AccountingTools, Inc. (author Steven Bragg) — Progress billing definition](https://www.accountingtools.com/articles/progress-billing), 2026-06-10; Section "What is a Progress Billing?", first sentence (TEXT.txt line 84). Verified 2026-09-09.

_Not established from an authoritative source._

_Required authority: high quality professional secondary reference. Highest achieved: official platform documentation, primary regulator or government._

## Where the withheld amount sits in your books, apart from ordinary receivables
<a id="need-CG-MCE-046-C3"></a>

- See above: Contractors must record retainage as a separate receivable, because the retained amount has been earned but has not yet been collected. ([CG-MCE-046#S03](#s-CG-MCE-046-S03))

- See above: A receivable is an entity’s right to consideration that is unconditional, and a right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. ([CG-MCE-046#S04](#s-CG-MCE-046-S04))

- <a id="s-CG-MCE-046-S13"></a>When either party to a contract with a customer has performed, the entity must present the contract in the statement of financial position as a contract asset or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment, and must present any unconditional rights to consideration separately as a receivable. _(jurisdiction: United States — U.S. GAAP (FASB Accounting Standards Codification), nongovernmental entities, entity_scope: Entities applying U.S. GAAP to contracts with customers within the scope of Topic 606 (606-10-15-1: the guidance in Subtopic 606-10 applies to all entities; exceptions listed in 606-10-15-2), accounting_basis: U.S. GAAP accrual accounting (FASB Accounting Standards Codification), effective_from: Annual reporting periods beginning after December 15, 2016 for a public business entity, a not-for-profit entity with publicly traded/listed/quoted securities or that is a conduit bond obligor, and an employee benefit plan filing with the SEC; annual reporting periods beginning after December 15, 2017 (interim periods within annual periods beginning after December 15, 2018) for all other entities (606-10-65-1))_ `CG-MCE-046#S13`
  > “606-10-45-1 When either party to a contract has performed, an entity shall
present the contract in the statement of financial position as a contract
asset or a contract liability, depending on the relationship between the
entity’s performance and the customer’s payment. An entity shall present
any unconditional rights to consideration separately as a receivable.” — [Financial Accounting Standards Board (FASB) — Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) — Section A: Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40)](https://storage.fasb.org/ASU%202014-09_Section%20A.pdf), 2014-05; Section A — Amendments to Subtopic 606-10, “Other Presentation Matters > General”, paragraph 606-10-45-1 (printed page 42). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-046-S14"></a>Retainage amounts may still be recorded as receivables, but could be classified as long-term receivables where the customer has the right to hold the amounts for more than a year; the article states this as a possible classification, not as a required one. _(jurisdiction: United States, entity_scope: construction contractors, conditions: classification as long-term applies where the customer has the right to hold the amounts for more than a year)_ `CG-MCE-046#S14`
  > “These retainage amounts may still be recorded as receivables , but could be classified as long-term receivables if the customer has the right to hold these amounts for more than a year.” — [AccountingTools, Inc. (author Steven Bragg) — Construction Accounting Explained](https://www.accountingtools.com/articles/construction-accounting.html), 2026-03-21; Section "Contract Retainage", under the heading "Construction Accounting Concepts". Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-046-S15"></a>Retention is already declared income yet not yet due, and Sage 100 Contractor therefore excludes retention from invoice aging and applies no finance charges to it. _(jurisdiction: United States (Sage 100 Contractor U.S. product help, /US/ edition), entity_scope: Users of Sage 100 Contractor billing job contracts that include retention, platform: Sage 100 Contractor, platform_edition: Version 2023, published May 17, 2023 (U.S. help, 25_1 path))_ `CG-MCE-046#S15`
  > “Therefore, retention is already declared income but is not yet due. Consequently, Sage 100 Contractor does not include retention in the invoice aging, and does not apply finance charges to it.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — About progress billing retention](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/About_progress_billing_retention.htm), 2023-05-17; Body, paragraph 6 under heading "About progress billing retention" (TEXT.txt line 24). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Partly established. Established: how amounts withheld under a retainage term are presented in the accounts separately from ordinary trade receivables (S03, S17); how amounts withheld under a retainage term are classified (S14). Missing: how amounts withheld under a retainage term are aged._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._

## Keeping retainage out of your ordinary trade receivables
<a id="need-CG-MCE-046-P3"></a>

- See above: Contractors must record retainage as a separate receivable, because the retained amount has been earned but has not yet been collected. ([CG-MCE-046#S03](#s-CG-MCE-046-S03))

- See above: When either party to a contract with a customer has performed, the entity must present the contract in the statement of financial position as a contract asset or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment, and must present any unconditional rights to consideration separately as a receivable. ([CG-MCE-046#S13](#s-CG-MCE-046-S13))

- <a id="s-CG-MCE-046-S16"></a>A contract asset is defined as an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time, for example the entity’s future performance. _(jurisdiction: United States — U.S. GAAP (FASB Accounting Standards Codification), nongovernmental entities, entity_scope: Entities applying U.S. GAAP to contracts with customers within the scope of Topic 606 (606-10-15-1: the guidance in Subtopic 606-10 applies to all entities; exceptions listed in 606-10-15-2), accounting_basis: U.S. GAAP accrual accounting (FASB Accounting Standards Codification), effective_from: Annual reporting periods beginning after December 15, 2016 for a public business entity, a not-for-profit entity with publicly traded/listed/quoted securities or that is a conduit bond obligor, and an employee benefit plan filing with the SEC; annual reporting periods beginning after December 15, 2017 (interim periods within annual periods beginning after December 15, 2018) for all other entities (606-10-65-1))_ `CG-MCE-046#S16`
  > “Contract Asset
An entity’s right to consideration in exchange for goods or services that the entity
has transferred to a customer when that right is conditioned on something other
than the passage of time (for example, the entity’s future performance).” — [Financial Accounting Standards Board (FASB) — Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) — Section A: Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40)](https://storage.fasb.org/ASU%202014-09_Section%20A.pdf), 2014-05; Section A — Amendments to Subtopic 606-10, Glossary, definition of “Contract Asset” (printed page 19). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-046-S17"></a>In the article's specimen note wording, retained amounts are shown as included within accounts receivable and identified in the note as amounts retained pending contract completion and customer acceptance of deliverables. _(jurisdiction: United States (US professional accounting publisher; the article itself names no jurisdiction), entity_scope: Contractor with retainage receivables, in an illustrative note, conditions: Illustrative specimen disclosure wording, not a requirement; Figures and date (20X1) are illustrative placeholders)_ `CG-MCE-046#S17`
  > “Accounts receivable includes amounts due from clients of $234,000 at December 31, 20X1 that have been retained pending the completion of contracts and customer acceptance of deliverables.” — [AccountingTools, Inc. (author Steven Bragg) — Retainage definition](https://www.accountingtools.com/articles/retainage), 2026-03-28; Section "Disclosure of Retainages", specimen note disclosure given after "For example:". Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._

## Why the retained balance should never be aged or chased as overdue
<a id="need-CG-MCE-046-P5"></a>

- See above: Retention is already declared income yet not yet due, and Sage 100 Contractor therefore excludes retention from invoice aging and applies no finance charges to it. ([CG-MCE-046#S15](#s-CG-MCE-046-S15))

- <a id="s-CG-MCE-046-S18"></a>The author's guidance is that a contractor should also note the retainage amounts expected to be collected within one year and the years in which any additional retainage will be collected. _(jurisdiction: United States (US professional accounting publisher; the article itself names no jurisdiction), entity_scope: Contractors preparing financial statements with notes, conditions: Describes disclosure of expected collection timing in the notes; the document does not state a current/non-current balance-sheet classification rule or an aging-schedule method)_ `CG-MCE-046#S18`
  > “They should also note the amounts expected to be collected within one year and the years in which any additional retainage will be collected.” — [AccountingTools, Inc. (author Steven Bragg) — Retainage definition](https://www.accountingtools.com/articles/retainage), 2026-03-28; Section "Disclosure of Retainages", second sentence. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-046-S19"></a>In the article's specimen note wording, retentions are usually due 30 days after project completion and customer acceptance. _(jurisdiction: United States (US professional accounting publisher; the article itself names no jurisdiction), entity_scope: Contractor with retainage receivables, in an illustrative note, conditions: Hedged as 'usually'; Appears inside illustrative specimen note wording, not as a requirement; Due date runs from completion and acceptance, not from the billing date)_ `CG-MCE-046#S19`
  > “Retentions are usually due 30 days following the completion of a project and acceptance by the customer.” — [AccountingTools, Inc. (author Steven Bragg) — Retainage definition](https://www.accountingtools.com/articles/retainage), 2026-03-28; Section "Disclosure of Retainages", closing sentence of the specimen note disclosure. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-046-S20"></a>A change in the time frame for a right to consideration to become unconditional — that is, for a contract asset to be reclassified to a receivable — is given as an example of a change in an entity’s contract asset and contract liability balances. _(jurisdiction: United States — U.S. GAAP (FASB Accounting Standards Codification), nongovernmental entities, entity_scope: Entities applying U.S. GAAP to contracts with customers within the scope of Topic 606 (606-10-15-1: the guidance in Subtopic 606-10 applies to all entities; exceptions listed in 606-10-15-2), accounting_basis: U.S. GAAP accrual accounting (FASB Accounting Standards Codification), effective_from: Annual reporting periods beginning after December 15, 2016 for a public business entity, a not-for-profit entity with publicly traded/listed/quoted securities or that is a conduit bond obligor, and an employee benefit plan filing with the SEC; annual reporting periods beginning after December 15, 2017 (interim periods within annual periods beginning after December 15, 2018) for all other entities (606-10-65-1), conditions: listed as one example among the examples given in 606-10-50-10)_ `CG-MCE-046#S20`
  > “A change in the time frame for a right to consideration to become
unconditional (that is, for a contract asset to be reclassified to a
receivable)” — [Financial Accounting Standards Board (FASB) — Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) — Section A: Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40)](https://storage.fasb.org/ASU%202014-09_Section%20A.pdf), 2014-05; Section A — Amendments to Subtopic 606-10, “Disclosure > Contract Balances”, paragraph 606-10-50-10(d) (printed page 45). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-046-S21"></a>Where a final inspection finds problems with the contractor's work, the client continues to hold the retainage until the identified issues have been rectified. _(jurisdiction: United States (US professional accounting publisher; the article itself names no jurisdiction), entity_scope: Parties to a contract containing a retainage term (client and contractor), conditions: Conditional on the final inspection finding problems with the work)_ `CG-MCE-046#S21`
  > “If the final inspection finds problems with the contractor’s work, the retainage will continue to be held by the client until the targeted issues have been rectified.” — [AccountingTools, Inc. (author Steven Bragg) — Retainage definition](https://www.accountingtools.com/articles/retainage), 2026-03-28; Section "What is Retainage?", opening paragraph, third sentence. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Partly established. Established: how the retained balance is presented (S14, S17). Missing: how the retained balance is aged._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._

## What decides when the withheld portion becomes revenue
<a id="need-CG-MCE-046-C4"></a>

- <a id="s-CG-MCE-046-S24"></a>For each identified performance obligation, an entity must determine at contract inception whether it satisfies that obligation over time or at a point in time; if it does not satisfy the obligation over time, the obligation is satisfied at a point in time. _(jurisdiction: United States — U.S. GAAP (FASB Accounting Standards Codification), nongovernmental entities, entity_scope: Entities applying U.S. GAAP to contracts with customers within the scope of Topic 606 (606-10-15-1: the guidance in Subtopic 606-10 applies to all entities; exceptions listed in 606-10-15-2), accounting_basis: U.S. GAAP accrual accounting (FASB Accounting Standards Codification), effective_from: Annual reporting periods beginning after December 15, 2016 for a public business entity, a not-for-profit entity with publicly traded/listed/quoted securities or that is a conduit bond obligor, and an employee benefit plan filing with the SEC; annual reporting periods beginning after December 15, 2017 (interim periods within annual periods beginning after December 15, 2018) for all other entities (606-10-65-1))_ `CG-MCE-046#S24`
  > “606-10-25-24 For each performance obligation identified in accordance with
paragraphs 606-10-25-14 through 25-22, an entity shall determine at contract
inception whether it satisfies the performance obligation over time (in accordance
with paragraphs 606-10-25-27 through 25-29) or satisfies the performance
obligation at a point in time (in accordance with paragraph 606-10-25-30). If an
entity does not satisfy a performance obligation over time, the performance
obligation is satisfied at a point in time.” — [Financial Accounting Standards Board (FASB) — Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) — Section A: Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40)](https://storage.fasb.org/ASU%202014-09_Section%20A.pdf), 2014-05; Section A — Amendments to Subtopic 606-10, “Recognition > Satisfaction of Performance Obligations”, paragraph 606-10-25-24 (printed page 27). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-046-S25"></a>The completed contract method is applied where a contractor does not meet the criteria for recognising revenue over time, and under it revenue is recognised at a point in time, typically when the project is substantially complete and control of the asset transfers to the customer. _(jurisdiction: United States, entity_scope: construction contractors, accounting_basis: US GAAP (FASB ASC 606), conditions: contractor does not meet the criteria for recognizing revenue over time)_ `CG-MCE-046#S25`
  > “The completed contract method is applied when a contractor does not meet the criteria for recognizing revenue over time. In this situation, revenue is recognized at a point in time, typically when a project is substantially complete and control of the asset transfers to the customer.” — [AccountingTools, Inc. (author Steven Bragg) — Construction Accounting Explained](https://www.accountingtools.com/articles/construction-accounting.html), 2026-03-21; Section "Completed Contract Method", under "Contract Revenue Recognition". Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-046-S26"></a>In Sage 100 Contractor, posting a receivable invoice declares the gross amount of that invoice as income. _(jurisdiction: United States (Sage 100 Contractor U.S. product edition; help path US/25_1), entity_scope: Users of Sage 100 Contractor who issue receivable invoices on job contracts that include retention, platform: Sage 100 Contractor, platform_edition: Version 2023 (U.S. edition, published May 17, 2023; served from the 25_1 help path))_ `CG-MCE-046#S26`
  > “Posting an invoice declares the gross amount of the invoice as income.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — About accounts receivable retention](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/About_accounts_receivable_retention.htm), 2023-05-17; About accounts receivable retention — body, paragraph 2, sentence 1. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Not established from an authoritative source._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._

## Revenue timing follows performance, not what you are allowed to collect
<a id="need-CG-MCE-046-P4"></a>

- See above: The completed contract method is applied where a contractor does not meet the criteria for recognising revenue over time, and under it revenue is recognised at a point in time, typically when the project is substantially complete and control of the asset transfers to the customer. ([CG-MCE-046#S25](#s-CG-MCE-046-S25))

- See above: In Sage 100 Contractor, posting a receivable invoice declares the gross amount of that invoice as income. ([CG-MCE-046#S26](#s-CG-MCE-046-S26))

- <a id="s-CG-MCE-046-S27"></a>An entity’s right to payment for performance completed to date need not be a present unconditional right to payment, and in many cases an entity will have an unconditional right to payment only at an agreed-upon milestone or upon complete satisfaction of the performance obligation. _(jurisdiction: United States — U.S. GAAP (FASB Accounting Standards Codification), nongovernmental entities, entity_scope: Entities applying U.S. GAAP to contracts with customers within the scope of Topic 606 (606-10-15-1: the guidance in Subtopic 606-10 applies to all entities; exceptions listed in 606-10-15-2), accounting_basis: U.S. GAAP accrual accounting (FASB Accounting Standards Codification), effective_from: Annual reporting periods beginning after December 15, 2016 for a public business entity, a not-for-profit entity with publicly traded/listed/quoted securities or that is a conduit bond obligor, and an employee benefit plan filing with the SEC; annual reporting periods beginning after December 15, 2017 (interim periods within annual periods beginning after December 15, 2018) for all other entities (606-10-65-1))_ `CG-MCE-046#S27`
  > “606-10-55-12 An entity’s right to payment for performance completed to date
need not be a present unconditional right to payment. In many cases, an entity
will have an unconditional right to payment only at an agreed-upon milestone or
upon complete satisfaction of the performance obligation.” — [Financial Accounting Standards Board (FASB) — Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) — Section A: Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40)](https://storage.fasb.org/ASU%202014-09_Section%20A.pdf), 2014-05; Section A — Amendments to Subtopic 606-10, “Implementation Guidance and Illustrations > Right to Payment for Performance Completed to Date”, paragraph 606-10-55-12 (printed page 51). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Not established from an authoritative source._

_Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._

## Tracking the retained balance to its job, its contract and its release
<a id="need-CG-MCE-046-C5"></a>

- See above: Retention is included on billings, but payment of it is not due until the project is completed. ([CG-MCE-046#S11](#s-CG-MCE-046-S11))

- <a id="s-CG-MCE-046-S28"></a>In construction accounting a separate job is set up in the accounting system for each construction project, and costs are assigned to that project by coding them to the unique job number as they are incurred; the article states this for costs and does not extend it to retained amounts. _(jurisdiction: United States, entity_scope: construction contractors)_ `CG-MCE-046#S28`
  > “A separate job is set up in the accounting system for each construction project, and costs are assigned to the project by coding costs to the unique job number as the costs are incurred.” — [AccountingTools, Inc. (author Steven Bragg) — Construction Accounting Explained](https://www.accountingtools.com/articles/construction-accounting.html), 2026-03-21; Section "What is Construction Accounting?". Verified 2026-09-09.

- <a id="s-CG-MCE-046-S29"></a>Withholding retainage affects cash flow management, working capital and contract asset balances, and requires detailed tracking and reconciliation throughout the project lifecycle; the article does not state the mechanics of that tracking or reconciliation. _(jurisdiction: United States, entity_scope: construction contractors)_ `CG-MCE-046#S29`
  > “This practice affects cash flow management, working capital, and contract asset balances, requiring detailed tracking and reconciliation throughout the project lifecycle.” — [AccountingTools, Inc. (author Steven Bragg) — Construction Accounting Explained](https://www.accountingtools.com/articles/construction-accounting.html), 2026-03-21; Section "Retainage Accounting", under the heading "Construction Accounting vs. Regular Accounting: The Key Differences". Verified 2026-09-09.

- <a id="s-CG-MCE-046-S30"></a>The article states that a receivables reconciliation is usually constructed on an informal basis for individual customers, and that it compares the customer's version of outstanding receivable balances to the company's version. _(jurisdiction: United States (article published by AccountingTools, Inc., a US CPE/accounting publisher — site section "State CPE Requirements"; the article itself states no jurisdictional limit and describes general reconciliation practice), entity_scope: companies reconciling accounts receivable with individual customers, conditions: 'usually' constructed on an informal basis — the source describes prevailing practice, not a requirement; no retention/retainage balance is mentioned.)_ `CG-MCE-046#S30`
  > “The receivables reconciliation is usually constructed on an informal basis for individual customers , and compares their version of outstanding receivable balances to the company's version.” — [AccountingTools, Inc. (author Steven Bragg) — Reconciliation statement definition](https://www.accountingtools.com/articles/what-is-a-reconciliation-statement.html), 2026-09-05; Section "When to Use a Reconciliation Statement", bullet "Accounts receivable reconciliation statement". Verified 2026-09-09.

- <a id="s-CG-MCE-046-S31"></a>Retention can be released either on each invoice individually or for the entire job at one time. _(jurisdiction: United States (Sage 100 Contractor U.S. product help, /US/ edition), entity_scope: Users of Sage 100 Contractor billing job contracts that include retention, platform: Sage 100 Contractor, platform_edition: Version 2023, published May 17, 2023 (U.S. help, 25_1 path))_ `CG-MCE-046#S31`
  > “You can release retention on each invoice individually, or you can release the retention for the entire job at one time.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — About progress billing retention](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/About_progress_billing_retention.htm), 2023-05-17; Body, paragraph 7 under heading "About progress billing retention" (TEXT.txt line 25). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S32"></a>The document sent to the customer to show that the retention amount is now due is a Progress Billing report chosen from reports 21—42. _(jurisdiction: United States (Sage 100 Contractor U.S. product help), entity_scope: the customer billed on the job, platform: Sage 100 Contractor, platform_edition: U.S. edition, Version 2023 (25_1 help path))_ `CG-MCE-046#S32`
  > “Print the appropriate Progress Billing report, reports 21—42 and send this report to your customer to show the retention amount is now due.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — Creating final retention invoices](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/Creating_final_retention_invoices.htm), 2023-05-17; Part 1—To close your current bill, release retention , and print a progress billing report. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S33"></a>The retention credit invoice records the job number in its Job text box, tying the credit to a specific job. _(jurisdiction: United States (Sage 100 Contractor U.S. product help), entity_scope: receivable credit invoices in 3-2 Receivable Invoices/Credits, platform: Sage 100 Contractor, platform_edition: U.S. edition, Version 2023 (25_1 help path))_ `CG-MCE-046#S33`
  > “In the Job text box, enter the job number.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — Creating final retention invoices](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/Creating_final_retention_invoices.htm), 2023-05-17; Part 3—To create a retention credit invoice for the amount of the retention due (3-2 Receivable Invoices/Credits). Verified 2026-09-09.

_Partly established. Established: what event under the contract triggers the release (S19); how the balance is reconciled against the customer's own record of what it has withheld (S30, S53). Missing: how a retained balance is tracked to its job and contract; how release is requested; how release is recorded; how the balance is proved to be fully resolved at completion; that the balance is tracked to the customer withholding it; how the balance is reconciled against the contract term; how a difference between the two records is investigated._

## Tracking the balance by job and by customer
<a id="need-CG-MCE-046-P6"></a>

- See above: In construction accounting a separate job is set up in the accounting system for each construction project, and costs are assigned to that project by coding them to the unique job number as they are incurred; the article states this for costs and does not extend it to retained amounts. ([CG-MCE-046#S28](#s-CG-MCE-046-S28))

- See above: Withholding retainage affects cash flow management, working capital and contract asset balances, and requires detailed tracking and reconciliation throughout the project lifecycle; the article does not state the mechanics of that tracking or reconciliation. ([CG-MCE-046#S29](#s-CG-MCE-046-S29))

- <a id="s-CG-MCE-046-S34"></a>Construction accounting relies heavily on job costing, in which each project is treated as a distinct cost object and profit centre. _(jurisdiction: United States, entity_scope: construction contractors)_ `CG-MCE-046#S34`
  > “Construction accounting relies heavily on job costing, where each project is treated as a distinct cost object and profit center.” — [AccountingTools, Inc. (author Steven Bragg) — Construction Accounting Explained](https://www.accountingtools.com/articles/construction-accounting.html), 2026-03-21; Section "Job Costing", under the heading "Construction Accounting vs. Regular Accounting: The Key Differences". Verified 2026-09-09.

- <a id="s-CG-MCE-046-S35"></a>Accounting systems engineered for project-based construction environments integrate automated retainage calculations along with job cost ledgers, cost codes, committed cost tracking, subcontract management, certified payroll reporting and progress billing under percentage-of-completion methods. _(jurisdiction: United States, entity_scope: construction contractors, conditions: accounting systems specifically engineered for project-based environments)_ `CG-MCE-046#S35`
  > “These platforms integrate job cost ledgers, cost codes, committed cost tracking, subcontract management, certified payroll reporting, progress billing under percentage-of-completion methods, and automated retainage calculations.” — [AccountingTools, Inc. (author Steven Bragg) — Construction Accounting Explained](https://www.accountingtools.com/articles/construction-accounting.html), 2026-03-21; Section "Invest in Construction-Specific Accounting Software", under "Top 5 Construction Accounting Best Practices". Verified 2026-09-09.

- <a id="s-CG-MCE-046-S36"></a>When a receivable invoice is created in Sage 100 Contractor, the program withholds retention at the rate specified in the job file, so the rate applied is held per job. _(jurisdiction: United States (Sage 100 Contractor U.S. product edition; help path US/25_1), entity_scope: Users of Sage 100 Contractor who issue receivable invoices on job contracts that include retention, platform: Sage 100 Contractor, platform_edition: Version 2023 (U.S. edition, published May 17, 2023; served from the 25_1 help path), conditions: a retention rate is specified in the job file)_ `CG-MCE-046#S36`
  > “When you create a receivable invoice, Sage 100 Contractor withholds retention at the rate specified in the job file.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — About accounts receivable retention](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/About_accounts_receivable_retention.htm), 2023-05-17; About accounts receivable retention — body, paragraph 1, sentence 2. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S37"></a>Some contracts stipulate that retention should stop accruing once a certain amount of the contract has been billed. _(jurisdiction: United States (Sage 100 Contractor U.S. product help, /US/ edition), entity_scope: Users of Sage 100 Contractor billing job contracts that include retention, platform: Sage 100 Contractor, platform_edition: Version 2023, published May 17, 2023 (U.S. help, 25_1 path), conditions: Contract terms that cap retention accrual)_ `CG-MCE-046#S37`
  > “Some contracts stipulate that retention should stop accruing after a certain amount of the contract has been billed.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — About progress billing retention](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/About_progress_billing_retention.htm), 2023-05-17; Body, paragraph 3 under heading "About progress billing retention" (TEXT.txt line 21). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S38"></a>The amount of retention withheld is restricted by typing the maximum amount to withhold in the Maximum Amount box of the Progress Billing Setup window. _(jurisdiction: United States (Sage 100 Contractor U.S. product help, /US/ edition), entity_scope: Users of Sage 100 Contractor billing job contracts that include retention, platform: Sage 100 Contractor, platform_edition: Version 2023, published May 17, 2023 (U.S. help, 25_1 path), conditions: Restricting the amount of retention withheld)_ `CG-MCE-046#S38`
  > “To restrict the amount of retention withheld, type the maximum amount of retention to withhold in the Maximum Amount box from the Progress Billing Setup window.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — About progress billing retention](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/About_progress_billing_retention.htm), 2023-05-17; Body, paragraph 3 under heading "About progress billing retention" (TEXT.txt line 21). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S39"></a>The job's Retention Rate is held in the Terms section of the 3-5 Jobs (Accounts Receivable) window and is cleared as part of releasing retention. _(jurisdiction: United States (Sage 100 Contractor U.S. product help), entity_scope: the job record in 3-5 Jobs (Accounts Receivable), platform: Sage 100 Contractor, platform_edition: U.S. edition, Version 2023 (25_1 help path))_ `CG-MCE-046#S39`
  > “In the Terms section of the window, clear the Retention Rate .” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — Creating final retention invoices](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/Creating_final_retention_invoices.htm), 2023-05-17; Part 2—To recalculate the retention and due dates (in 3-5 Jobs (Accounts Receivable)). Verified 2026-09-09.

_Not established from an authoritative source._

_Required authority: high quality professional secondary reference. Highest achieved: official platform documentation._

## Getting it released: the trigger, the document and the tie back to what was withheld
<a id="need-CG-MCE-046-P7"></a>

- See above: Retention can be released either on each invoice individually or for the entire job at one time. ([CG-MCE-046#S31](#s-CG-MCE-046-S31))

- See above: The document sent to the customer to show that the retention amount is now due is a Progress Billing report chosen from reports 21—42. ([CG-MCE-046#S32](#s-CG-MCE-046-S32))

- <a id="s-CG-MCE-046-S40"></a>Retention is released in the progress billing application by choosing Release Retention from the Update menu. _(jurisdiction: United States (Sage 100 Contractor U.S. product help), entity_scope: progress billing applications in 3-7 Progress Billing, platform: Sage 100 Contractor, platform_edition: U.S. edition, Version 2023 (25_1 help path))_ `CG-MCE-046#S40`
  > “From the Update menu, select Release Retention .” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — Creating final retention invoices](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/Creating_final_retention_invoices.htm), 2023-05-17; Part 1—To close your current bill, release retention , and print a progress billing report. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S42"></a>When the work is substantially complete, the Contracting Officer may retain, out of previously withheld funds and future progress payments, the amount the Contracting Officer considers adequate for protection of the Government, and must release to the Contractor all the remaining withheld funds. _(jurisdiction: United States — U.S. Federal Government procurement (Federal Acquisition Regulation), entity_scope: Contractors under U.S. Government fixed-price construction contracts that include FAR clause 52.232-5, effective_from: 2014-05 (clause dated May 2014), conditions: The work is substantially complete)_ `CG-MCE-046#S42`
  > “When the work is substantially complete, the Contracting Officer may retain from previously withheld funds and future progress payments that amount the Contracting Officer considers adequate for protection of the Government and shall release to the Contractor all the remaining withheld funds.” — [U.S. General Services Administration, Department of Defense and NASA (Federal Acquisition Regulation, published on Acquisition.GOV) — FAR 52.232-5 Payments under Fixed-Price Construction Contracts](https://www.acquisition.gov/far/52.232-5), 2026-07-28; Paragraph (e), Retainage. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S43"></a>On completion and acceptance of each separate building, public work or other division of the contract for which the price is stated separately in the contract, payment must be made for that completed work without retention of a percentage. _(jurisdiction: United States — U.S. Federal Government procurement (Federal Acquisition Regulation), entity_scope: Contractors under U.S. Government fixed-price construction contracts that include FAR clause 52.232-5, effective_from: 2014-05 (clause dated May 2014), conditions: Completion and acceptance of a separate building, public work or other division of the contract; The price for that division is stated separately in the contract)_ `CG-MCE-046#S43`
  > “Also, on completion and acceptance of each separate building, public work, or other division of the contract, for which the price is stated separately in the contract, payment shall be made for the completed work without retention of a percentage.” — [U.S. General Services Administration, Department of Defense and NASA (Federal Acquisition Regulation, published on Acquisition.GOV) — FAR 52.232-5 Payments under Fixed-Price Construction Contracts](https://www.acquisition.gov/far/52.232-5), 2026-07-28; Paragraph (e), Retainage (final sentence). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S44"></a>The Government must pay the amount due the Contractor under the contract after completion and acceptance of all work, presentation of a properly executed voucher, and presentation of a release of all claims against the Government arising by virtue of the contract, other than claims in stated amounts that the Contractor has specifically excepted from the release. _(jurisdiction: United States — U.S. Federal Government procurement (Federal Acquisition Regulation), entity_scope: Contractors under U.S. Government fixed-price construction contracts that include FAR clause 52.232-5, effective_from: 2014-05 (clause dated May 2014), conditions: Completion and acceptance of all work; Properly executed voucher presented; Release of claims presented, with any excepted claims stated in amounts)_ `CG-MCE-046#S44`
  > “The Government shall pay the amount due the Contractor under this contract after-
 (1) Completion and acceptance of all work;
 (2) Presentation of a properly executed voucher; and
 (3) Presentation of release of all claims against the Government arising by virtue of this contract, other than claims , in stated amounts, that the Contractor has specifically excepted from the operation of the release.” — [U.S. General Services Administration, Department of Defense and NASA (Federal Acquisition Regulation, published on Acquisition.GOV) — FAR 52.232-5 Payments under Fixed-Price Construction Contracts](https://www.acquisition.gov/far/52.232-5), 2026-07-28; Paragraph (h), Final payment, with subparagraphs (1) through (3). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S45"></a>Where an owner has withheld a retention from a direct contractor, the owner must pay that retention to the contractor within 45 days after completion of the work of improvement. _(jurisdiction: California, United States, entity_scope: Owner and direct contractor on a private work of improvement in California (Civil Code, Division 4, Part 6, Title 2), effective_from: 2011-01-01, conditions: applies where an owner withholds a retention from a direct contractor; operative July 1, 2012, by Sec. 105 of Ch. 697 and by Section 8052)_ `CG-MCE-046#S45`
  > “If an owner withholds a retention from a direct contractor, the owner shall, within 45 days after completion of the work of improvement, pay the retention to the contractor.” — [California Legislative Counsel, State of California (Civil Code, Division 4, Part 6, Title 2, Chapter 8, Article 2 — Retention Payment) — California Civil Code section 8812](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=8812), 2011-01-01; Civil Code - CIV, DIVISION 4. GENERAL PROVISIONS, PART 6. WORKS OF IMPROVEMENT, TITLE 2. PRIVATE WORKS OF IMPROVEMENT, CHAPTER 8. Prompt Payment, ARTICLE 2. Retention Payment [8810 - 8822] — Section 8812, subdivision (a). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S46"></a>Where part of a work of improvement ultimately will become the property of a public entity, the owner is permitted to condition payment of a retention allocable to that part on acceptance of that part by the public entity. _(jurisdiction: California, United States, entity_scope: Owner and direct contractor on a private work of improvement in California (Civil Code, Division 4, Part 6, Title 2), effective_from: 2011-01-01, conditions: applies where part of the work of improvement ultimately will become the property of a public entity; condition attaches only to the retention allocable to that part; operative July 1, 2012, by Sec. 105 of Ch. 697 and by Section 8052)_ `CG-MCE-046#S46`
  > “If part of a work of improvement ultimately will become the property of a public entity, the owner may condition payment of a retention allocable to that part
 on acceptance of the part by the public entity.” — [California Legislative Counsel, State of California (Civil Code, Division 4, Part 6, Title 2, Chapter 8, Article 2 — Retention Payment) — California Civil Code section 8812](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=8812), 2011-01-01; Civil Code - CIV, DIVISION 4. GENERAL PROVISIONS, PART 6. WORKS OF IMPROVEMENT, TITLE 2. PRIVATE WORKS OF IMPROVEMENT, CHAPTER 8. Prompt Payment, ARTICLE 2. Retention Payment [8810 - 8822] — Section 8812, subdivision (b). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S48"></a>The Notice to Claimant states that the document is enforceable against the claimant if the claimant signs it, even if the claimant has not been paid. _(jurisdiction: California, United States, entity_scope: Text prescribed for the statutory Unconditional Waiver and Release on Final Payment form under California Civil Code section 8138, effective_from: 2012-07-01, conditions: Added by Stats. 2010, Ch. 697, Sec. 20 (SB 189); effective January 1, 2011; operative July 1, 2012, by Sec. 105 of Ch. 697 and by Section 8052)_ `CG-MCE-046#S48`
  > “THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID.” — [California Legislative Counsel, State of California (Civil Code) — California Civil Code section 8138 — Unconditional Waiver and Release on Final Payment](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=8138), 2012-07-01; Civil Code - CIV, Division 4, Part 6 (Works of Improvement), Title 1, Chapter 3 (Waiver and Release), Section 8138 — prescribed form, “Notice to Claimant”. Verified 2026-09-09.

_Partly established. Established: what triggers release (S19). Missing: what document requests release; how the released amount ties back to what was withheld._

## Collecting the release and proving the job's retained balance reached nil
<a id="need-CG-MCE-046-P8"></a>

- <a id="s-CG-MCE-046-S49"></a>Release of retention is verified by opening Invoices from 3-5 Jobs (Accounts Receivable) for the job and reviewing the Net Due amount. _(jurisdiction: United States (Sage 100 Contractor U.S. product help), entity_scope: the job record in 3-5 Jobs (Accounts Receivable), platform: Sage 100 Contractor, platform_edition: U.S. edition, Version 2023 (25_1 help path))_ `CG-MCE-046#S49`
  > “On 3-5 Jobs (Accounts Receivable) , click Invoices , and then review the Net Due amount to verify that the retention has been released.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — Creating final retention invoices](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/Creating_final_retention_invoices.htm), 2023-05-17; Part 2—To recalculate the retention and due dates (final step). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S50"></a>The credit is applied to all open retention in the 3-3-1 Cash Receipts window. _(jurisdiction: United States (Sage 100 Contractor U.S. product help), entity_scope: open retention for the job or client in 3-3-1 Cash Receipts, platform: Sage 100 Contractor, platform_edition: U.S. edition, Version 2023 (25_1 help path))_ `CG-MCE-046#S50`
  > “In 3-3-1 Cash Receipts apply the credit to all open retention .” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — Creating final retention invoices](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/Creating_final_retention_invoices.htm), 2023-05-17; Part 4—To apply the credit to retention. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S51"></a>The amounts entered in the Credit column must balance to zero. _(jurisdiction: United States (Sage 100 Contractor U.S. product help), entity_scope: the 3-3-1 Cash Receipts grid when applying a credit, platform: Sage 100 Contractor, platform_edition: U.S. edition, Version 2023 (25_1 help path))_ `CG-MCE-046#S51`
  > “Important! The amounts in the Credit column must balance to zero.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — Creating final retention invoices](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/Creating_final_retention_invoices.htm), 2023-05-17; Part 4—To apply the credit to retention — "Important!" note. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S52"></a>The printed job statement details all outstanding amounts due, including the retention invoice. _(jurisdiction: United States (Sage 100 Contractor U.S. product help), entity_scope: the job statement printed for the job number entered, platform: Sage 100 Contractor, platform_edition: U.S. edition, Version 2023 (25_1 help path), conditions: Include Paid Invoices and Include Payment History selected as described)_ `CG-MCE-046#S52`
  > “Your statement details all outstanding amounts due, including the retention invoice.” — [The Sage Group plc (Sage 100 Contractor U.S. product help) — Creating final retention invoices](https://help-sage100contractor.na.sage.com/Sage100Contractor/US/25_1/Content/Modules/3-Accounts_Receivable/Creating_final_retention_invoices.htm), 2023-05-17; Part 6—To print a 3-4 Statement for detailed billing information (after printing). Verified 2026-09-09.

_Not established from an authoritative source._

_Required authority: high quality professional secondary reference. Highest achieved: official platform documentation, primary regulator or government._

## Reconciling your retained balance against the contract and the customer's records
<a id="need-CG-MCE-046-P9"></a>

- See above: The article states that a receivables reconciliation is usually constructed on an informal basis for individual customers, and that it compares the customer's version of outstanding receivable balances to the company's version. ([CG-MCE-046#S30](#s-CG-MCE-046-S30))

- <a id="s-CG-MCE-046-S53"></a>The article defines a reconciliation statement as a document that starts from the company's own record of an account balance, adds and subtracts reconciling items in a set of additional columns, and uses those adjustments to arrive at the record of the same account held by a third party. _(jurisdiction: United States (article published by AccountingTools, Inc., a US CPE/accounting publisher — site section "State CPE Requirements"; the article itself states no jurisdictional limit and describes general reconciliation practice), entity_scope: any company reconciling one of its account balances to the record of the same account held by a third party, conditions: This is a definition of the document form, not a requirement to prepare one.)_ `CG-MCE-046#S53`
  > “A reconciliation statement is a document that begins with a company's own record of an account balance , adds and subtracts reconciling items in a set of additional columns, and then uses these adjustments to arrive at the record of the same account held by a third party.” — [AccountingTools, Inc. (author Steven Bragg) — Reconciliation statement definition](https://www.accountingtools.com/articles/what-is-a-reconciliation-statement.html), 2026-09-05; Section "What is a Reconciliation Statement?", first paragraph, first sentence. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S54"></a>The article states that the differences between the two accounts are detailed in the reconciliation statement, and that this makes it easier to determine which of the reconciling items may be invalid and in need of adjustment. _(jurisdiction: United States (article published by AccountingTools, Inc., a US CPE/accounting publisher — site section "State CPE Requirements"; the article itself states no jurisdictional limit and describes general reconciliation practice), entity_scope: any company preparing a reconciliation statement between its own account record and a third party's, conditions: The source says such items 'may be' invalid; it does not state that any identified item is invalid, nor prescribe an investigation procedure.)_ `CG-MCE-046#S54`
  > “The differences between the two accounts are detailed in the reconciliation statement, which makes it easier to determine which of the reconciling items may be invalid and in need of adjustment.” — [AccountingTools, Inc. (author Steven Bragg) — Reconciliation statement definition](https://www.accountingtools.com/articles/what-is-a-reconciliation-statement.html), 2026-09-05; Section "What is a Reconciliation Statement?", first paragraph, third sentence. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S55"></a>The article states that reconciliation statements are even more useful for clarifying substantial differences between the amounts two parties recorded for a transaction, and that such differences may require adjustments by either party to modify its recorded balances. _(jurisdiction: United States (article published by AccountingTools, Inc., a US CPE/accounting publisher — site section "State CPE Requirements"; the article itself states no jurisdictional limit and describes general reconciliation practice), entity_scope: two parties whose recorded amounts for the same transaction differ substantially, conditions: 'may require adjustments by either party' — the source does not state that an adjustment is required, nor which party must adjust.)_ `CG-MCE-046#S55`
  > “The statements are even more useful for clarifying substantial differences between the amounts recorded for a transaction , which may require adjustments by either party to modify their recorded balances.” — [AccountingTools, Inc. (author Steven Bragg) — Reconciliation statement definition](https://www.accountingtools.com/articles/what-is-a-reconciliation-statement.html), 2026-09-05; Section "When to Use a Reconciliation Statement", closing paragraph, second sentence. Verified 2026-09-09.

_Partly established. Established: how the retained balance is reconciled against the customer's own record of what it has withheld (S30, S53). Missing: how the retained balance is reconciled against the contract; how a difference is investigated._

## The documents that support the balance from contract term to release
<a id="need-CG-MCE-046-C6"></a>

- See above: The document sent to the customer to show that the retention amount is now due is a Progress Billing report chosen from reports 21—42. ([CG-MCE-046#S32](#s-CG-MCE-046-S32))

- See above: The retention credit invoice records the job number in its Job text box, tying the credit to a specific job. ([CG-MCE-046#S33](#s-CG-MCE-046-S33))

- See above: The Government must pay the amount due the Contractor under the contract after completion and acceptance of all work, presentation of a properly executed voucher, and presentation of a release of all claims against the Government arising by virtue of the contract, other than claims in stated amounts that the Contractor has specifically excepted from the release. ([CG-MCE-046#S44](#s-CG-MCE-046-S44))

- See above: The printed job statement details all outstanding amounts due, including the retention invoice. ([CG-MCE-046#S52](#s-CG-MCE-046-S52))

- <a id="s-CG-MCE-046-S57"></a>A contractor's request for a progress payment must carry substantiation that includes an itemization of the amounts requested tied to the elements of work covered, the amount included for work performed by each subcontractor, the total amount of each subcontract, the amounts previously paid to each such subcontractor, and any additional supporting data in the form and detail the Contracting Officer requires. _(jurisdiction: United States — U.S. Federal Government procurement (Federal Acquisition Regulation), entity_scope: Contractors under U.S. Government fixed-price construction contracts that include FAR clause 52.232-5, effective_from: 2014-05 (clause dated May 2014))_ `CG-MCE-046#S57`
  > “ (1) The Contractor’s request for progress payments shall include the following substantiation:
 (i) An itemization of the amounts requested, related to the various elements of work required by the contract covered by the payment requested.
 (ii) A listing of the amount included for work performed by each subcontractor under the contract.
 (iii) A listing of the total amount of each subcontract under the contract.
 (iv) A listing of the amounts previously paid to each such subcontractor under the contract.
 (v) Additional supporting data in a form and detail required by the Contracting Officer .” — [U.S. General Services Administration, Department of Defense and NASA (Federal Acquisition Regulation, published on Acquisition.GOV) — FAR 52.232-5 Payments under Fixed-Price Construction Contracts](https://www.acquisition.gov/far/52.232-5), 2026-07-28; Paragraph (b)(1), including subparagraphs (i) through (v). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S58"></a>The asterisked estimate amounts on the face of the form (Work Completed, Stored Materials and Retainage) are supported by a detailed breakdown attached to the estimate. _(jurisdiction: United States (federal): construction contracts financed or administered under U.S. Department of Agriculture Rural Development / Farm Service Agency programs, entity_scope: Parties to a construction contract using USDA Form RD 1924-18 — owner, contractor, architect or engineer, and the Agency, conditions: Applies to partial payment estimates submitted on USDA Form RD 1924-18 (Rev. 6-97); Form displays OMB control numbers 0575-0042 and 0575-0189, stated to expire 3/31/2026)_ `CG-MCE-046#S58`
  > “* Detailed breakdown attached” — [U.S. Department of Agriculture, Rural Development / Farm Service Agency — Form RD 1924-18, Partial Payment Estimate](https://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD1924-18.PDF), 1997-06; Front page, footnote to the ESTIMATE block (below line 9 / TOTALS). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S59"></a>The detailed breakdowns should, as a minimum, contain the information shown in the typical breakdown formats printed on the reverse of the form; the formats are stated as a minimum, not as a closed or exhaustive specification. _(jurisdiction: United States (federal): construction contracts financed or administered under U.S. Department of Agriculture Rural Development / Farm Service Agency programs, entity_scope: Parties to a construction contract using USDA Form RD 1924-18 — owner, contractor, architect or engineer, and the Agency, conditions: Applies to partial payment estimates submitted on USDA Form RD 1924-18 (Rev. 6-97); Form displays OMB control numbers 0575-0042 and 0575-0189, stated to expire 3/31/2026)_ `CG-MCE-046#S59`
  > “* As a minimum, detailed breakdowns should contain this information.” — [U.S. Department of Agriculture, Rural Development / Farm Service Agency — Form RD 1924-18, Partial Payment Estimate](https://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD1924-18.PDF), 1997-06; Reverse (RD 1924-18 REVERSE), footnote below the typical breakdown formats. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S60"></a>In the typical retainage breakdown, retainage is shown for this estimate as a percent and as an amount retained, split across the rows Work Completed, Stored Materials and Other, with totals. _(jurisdiction: United States (federal): construction contracts financed or administered under U.S. Department of Agriculture Rural Development / Farm Service Agency programs, entity_scope: Parties to a construction contract using USDA Form RD 1924-18 — owner, contractor, architect or engineer, and the Agency, conditions: Applies to partial payment estimates submitted on USDA Form RD 1924-18 (Rev. 6-97); Form displays OMB control numbers 0575-0042 and 0575-0189, stated to expire 3/31/2026)_ `CG-MCE-046#S60`
  > “RETAINAGE
THIS ESTIMATE

PERCENT

RETAINED

%
WORK COMPLETED:
STORED MATERIALS:
OTHER (explain)
TOTALS” — [U.S. Department of Agriculture, Rural Development / Farm Service Agency — Form RD 1924-18, Partial Payment Estimate](https://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD1924-18.PDF), 1997-06; Reverse, TYPICAL STORED MATERIALS AND RETAINAGE BREAKDOWN panel, retainage columns and rows. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S61"></a>The Exceptions section of the form provides a line on which disputed claims for extras are stated as a dollar amount. _(jurisdiction: California, United States, entity_scope: Text prescribed for the statutory Unconditional Waiver and Release on Final Payment form under California Civil Code section 8138, effective_from: 2012-07-01, conditions: Added by Stats. 2010, Ch. 697, Sec. 20 (SB 189); effective January 1, 2011; operative July 1, 2012, by Sec. 105 of Ch. 697 and by Section 8052)_ `CG-MCE-046#S61`
  > “Disputed claims for extras in the amount of: $” — [California Legislative Counsel, State of California (Civil Code) — California Civil Code section 8138 — Unconditional Waiver and Release on Final Payment](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=8138), 2012-07-01; Civil Code - CIV, Division 4, Part 6 (Works of Improvement), Title 1, Chapter 3 (Waiver and Release), Section 8138 — prescribed form, “Exceptions”. Verified 2026-09-09.

- <a id="s-CG-MCE-046-S62"></a>The form includes the claimant's statement that the claimant has been paid in full. _(jurisdiction: California, United States, entity_scope: Text prescribed for the statutory Unconditional Waiver and Release on Final Payment form under California Civil Code section 8138, effective_from: 2012-07-01, conditions: Added by Stats. 2010, Ch. 697, Sec. 20 (SB 189); effective January 1, 2011; operative July 1, 2012, by Sec. 105 of Ch. 697 and by Section 8052)_ `CG-MCE-046#S62`
  > “The claimant has been paid in full.” — [California Legislative Counsel, State of California (Civil Code) — California Civil Code section 8138 — Unconditional Waiver and Release on Final Payment](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=8138), 2012-07-01; Civil Code - CIV, Division 4, Part 6 (Works of Improvement), Title 1, Chapter 3 (Waiver and Release), Section 8138 — prescribed form, “Unconditional Waiver and Release”. Verified 2026-09-09.

_Not established from an authoritative source._

## What to keep for the contract, every billing that withheld, and the release
<a id="need-CG-MCE-046-P10"></a>

- See above: The Government must pay the amount due the Contractor under the contract after completion and acceptance of all work, presentation of a properly executed voucher, and presentation of a release of all claims against the Government arising by virtue of the contract, other than claims in stated amounts that the Contractor has specifically excepted from the release. ([CG-MCE-046#S44](#s-CG-MCE-046-S44))

- See above: A contractor's request for a progress payment must carry substantiation that includes an itemization of the amounts requested tied to the elements of work covered, the amount included for work performed by each subcontractor, the total amount of each subcontract, the amounts previously paid to each such subcontractor, and any additional supporting data in the form and detail the Contracting Officer requires. ([CG-MCE-046#S57](#s-CG-MCE-046-S57))

- See above: The asterisked estimate amounts on the face of the form (Work Completed, Stored Materials and Retainage) are supported by a detailed breakdown attached to the estimate. ([CG-MCE-046#S58](#s-CG-MCE-046-S58))

- See above: The detailed breakdowns should, as a minimum, contain the information shown in the typical breakdown formats printed on the reverse of the form; the formats are stated as a minimum, not as a closed or exhaustive specification. ([CG-MCE-046#S59](#s-CG-MCE-046-S59))

- See above: In the typical retainage breakdown, retainage is shown for this estimate as a percent and as an amount retained, split across the rows Work Completed, Stored Materials and Other, with totals. ([CG-MCE-046#S60](#s-CG-MCE-046-S60))

- See above: The Exceptions section of the form provides a line on which disputed claims for extras are stated as a dollar amount. ([CG-MCE-046#S61](#s-CG-MCE-046-S61))

- <a id="s-CG-MCE-046-S63"></a>With each request for a progress payment the Contractor must furnish the stated certification or payment will not be made; the certification remains acceptable if the Contractor elects to delete paragraph (c)(4) from it. _(jurisdiction: United States — U.S. Federal Government procurement (Federal Acquisition Regulation), entity_scope: Contractors under U.S. Government fixed-price construction contracts that include FAR clause 52.232-5, effective_from: 2014-05 (clause dated May 2014))_ `CG-MCE-046#S63`
  > “Along with each request for progress payments, the Contractor shall furnish the following certification, or payment shall not be made: (However, if the Contractor elects to delete paragraph (c)(4) from the certification, the certification is still acceptable.)” — [U.S. General Services Administration, Department of Defense and NASA (Federal Acquisition Regulation, published on Acquisition.GOV) — FAR 52.232-5 Payments under Fixed-Price Construction Contracts](https://www.acquisition.gov/far/52.232-5), 2026-07-28; Paragraph (c), Contractor certification. Verified 2026-09-09.

_Not established from an authoritative source._

_Required authority: high quality professional secondary reference. Highest achieved: official platform documentation, primary regulator or government._

## When the retained amount will not come back in full
<a id="need-CG-MCE-046-P11"></a>

- See above: Where a final inspection finds problems with the contractor's work, the client continues to hold the retainage until the identified issues have been rectified. ([CG-MCE-046#S21](#s-CG-MCE-046-S21))

- See above: The Exceptions section of the form provides a line on which disputed claims for extras are stated as a dollar amount. ([CG-MCE-046#S61](#s-CG-MCE-046-S61))

- <a id="s-CG-MCE-046-S65"></a>Where there is a good faith dispute between the owner and the direct contractor as to a retention payment due, the owner is permitted to withhold from final payment an amount not in excess of 150 percent of the disputed amount. _(jurisdiction: California, United States, entity_scope: Owner and direct contractor on a private work of improvement in California (Civil Code, Division 4, Part 6, Title 2), effective_from: 2011-01-01, conditions: applies where there is a good faith dispute between the owner and direct contractor as to a retention payment due; operative July 1, 2012, by Sec. 105 of Ch. 697 and by Section 8052)_ `CG-MCE-046#S65`
  > “If there is a good faith dispute between the owner and direct contractor as to a retention payment due, the owner may withhold from final payment an amount not in excess of 150 percent of the disputed amount.” — [California Legislative Counsel, State of California (Civil Code, Division 4, Part 6, Title 2, Chapter 8, Article 2 — Retention Payment) — California Civil Code section 8812](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=8812), 2011-01-01; Civil Code - CIV, DIVISION 4. GENERAL PROVISIONS, PART 6. WORKS OF IMPROVEMENT, TITLE 2. PRIVATE WORKS OF IMPROVEMENT, CHAPTER 8. Prompt Payment, ARTICLE 2. Retention Payment [8810 - 8822] — Section 8812, subdivision (c). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S66"></a>If, after making a certified progress payment request, the Contractor discovers that part or all of the request is payment for performance that fails to conform to the specifications, terms and conditions of the contract (the 'unearned amount'), the Contractor must notify the Contracting Officer of the performance deficiency. _(jurisdiction: United States — U.S. Federal Government procurement (Federal Acquisition Regulation), entity_scope: Contractors under U.S. Government fixed-price construction contracts that include FAR clause 52.232-5, effective_from: 2014-05 (clause dated May 2014), conditions: Contractor discovers, after a certified request, that part or all of it is payment for non-conforming performance)_ `CG-MCE-046#S66`
  > “If the Contractor, after making a certified request for progress payments, discovers that a portion or all of such request constitutes a payment for performance by the Contractor that fails to conform to the specifications, terms, and conditions of this contract (hereinafter referred to as the "unearned amount"), the Contractor shall -
 (1) Notify the Contracting Officer of such performance deficiency; and” — [U.S. General Services Administration, Department of Defense and NASA (Federal Acquisition Regulation, published on Acquisition.GOV) — FAR 52.232-5 Payments under Fixed-Price Construction Contracts](https://www.acquisition.gov/far/52.232-5), 2026-07-28; Paragraph (d), Refund of unearned amounts, with subparagraph (1). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S67"></a>For an unearned amount, the Contractor is obligated to pay the Government interest on that amount (computed by the Contracting Officer under paragraph (j)) running from the 8th day after receipt of the unearned amount until either the date the Contractor notifies the Contracting Officer that the deficiency has been corrected or the date the Contractor reduces a subsequent certified progress payment request by an amount equal to the unearned amount. _(jurisdiction: United States — U.S. Federal Government procurement (Federal Acquisition Regulation), entity_scope: Contractors under U.S. Government fixed-price construction contracts that include FAR clause 52.232-5, effective_from: 2014-05 (clause dated May 2014), conditions: An unearned amount as defined in paragraph (d) has been received)_ `CG-MCE-046#S67`
  > “ (2) Be obligated to pay the Government an amount (computed by the Contracting Officer in the manner provided in paragraph (j) of this clause) equal to interest on the unearned amount from the 8 thday after the date of receipt of the unearned amount until-
 (i) The date the Contractor notifies the Contracting Officer that the performance deficiency has been corrected; or
 (ii) The date the Contractor reduces the amount of any subsequent certified request for progress payments by an amount equal to the unearned amount.” — [U.S. General Services Administration, Department of Defense and NASA (Federal Acquisition Regulation, published on Acquisition.GOV) — FAR 52.232-5 Payments under Fixed-Price Construction Contracts](https://www.acquisition.gov/far/52.232-5), 2026-07-28; Paragraph (d)(2), with subparagraphs (i) and (ii). Verified 2026-09-09.

- <a id="s-CG-MCE-046-S68"></a>An entity must assess a contract asset for impairment in accordance with Topic 310 on receivables, and any impairment of a contract asset must be measured, presented and disclosed in accordance with Topic 310. _(jurisdiction: United States — U.S. GAAP (FASB Accounting Standards Codification), nongovernmental entities, entity_scope: Entities applying U.S. GAAP to contracts with customers within the scope of Topic 606 (606-10-15-1: the guidance in Subtopic 606-10 applies to all entities; exceptions listed in 606-10-15-2), accounting_basis: U.S. GAAP accrual accounting (FASB Accounting Standards Codification), effective_from: Annual reporting periods beginning after December 15, 2016 for a public business entity, a not-for-profit entity with publicly traded/listed/quoted securities or that is a conduit bond obligor, and an employee benefit plan filing with the SEC; annual reporting periods beginning after December 15, 2017 (interim periods within annual periods beginning after December 15, 2018) for all other entities (606-10-65-1))_ `CG-MCE-046#S68`
  > “An entity shall
assess a contract asset for impairment in accordance with Topic 310 on
receivables. An impairment of a contract asset shall be measured, presented,
and disclosed in accordance with Topic 310 (see also paragraph 606-10-504(b)).” — [Financial Accounting Standards Board (FASB) — Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) — Section A: Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40)](https://storage.fasb.org/ASU%202014-09_Section%20A.pdf), 2014-05; Section A — Amendments to Subtopic 606-10, “Other Presentation Matters > General”, paragraph 606-10-45-3 (printed page 42). Verified 2026-09-09.

_Not established from an authoritative source._

## Not yet fully established from an authoritative source

- Establish what a contractual retainage or holdback on progress billings is and what it changes about the status of an amount that has been billed. _(established; below the required authority class)_
- Establish what a progress billing must show when part of the billed amount is withheld under the contract, so the amount currently due is unambiguous to both parties. _(not established; below the required authority class)_
- Establish how amounts withheld under a retainage term are presented in the accounts separately from ordinary trade receivables, including how they are classified and how they are aged. _(partly established; below the required authority class)_
- Establish what determines when the withheld portion of a progress billing is recognised as revenue under each accounting basis a small business may use. _(not established; below the required authority class)_
- Establish how a retained balance is tracked to its job and contract, how release is requested and recorded, and how the balance is proved to be fully resolved at completion. Establish also that the balance is tracked to the customer withholding it, what event under the contract triggers the release, and how the balance is reconciled against the contract term and against the customer's own record of what it has withheld, including how a difference between the two records is investigated. _(partly established)_
- Establish what documentation supports a retained balance through the life of a job, including the contract term, each withholding and the release, and what has to be established when the amount released is reduced or withheld entirely. _(not established)_
- Establish what a contractual withholding on progress billings is and what it changes about an amount already billed, so the reader understands they are tracking something earned and billed that is not yet collectible. _(established; below the required authority class)_
- Establish how the progress billing must present the billed amount, the withheld amount and the amount currently due. _(not established; below the required authority class)_
- Establish where the withheld amount is held in the records so that it is separated from ordinary trade receivables. _(established; below the required authority class)_
- Establish what determines when the withheld portion is recognised as revenue, given the accounting basis the business keeps its books on. _(not established; below the required authority class)_
- Establish how the retained balance is presented and aged, so it is neither reported as overdue nor pursued through ordinary collection follow-up. _(partly established; below the required authority class)_
- Establish how the retained balance is tracked by job and by customer so it can be tied to the contract term that created it and to the event that will release it. _(not established; below the required authority class)_
- Establish the release mechanism: what triggers release, what document requests it, and how the released amount ties back to what was withheld. _(partly established)_
- Establish how the released amount is collected and how the retained balance for a completed job is proved to have reached nil. _(not established; below the required authority class)_
- Establish how the retained balance is reconciled against the contract and against the customer's own record of what it has withheld, and how a difference is investigated. _(partly established)_
- Establish what documentation supports the retained balance across the life of the job, including the contract term, each billing that withheld an amount, and the release. _(not established; below the required authority class)_
- Establish what has to be determined before a retained amount that will not be collected in full is dealt with in the records, without resolving the write-off itself. _(not established)_

## Related

- [A customer paid a deposit or retainer before the work was done — how do I record it, and how do I apply it to the invoice later?](https://uppago.com/resources/a-customer-paid-a-deposit-or-retainer-before-the-work-was-done-how-do-i-record)
- [How do I write off a customer invoice I'm never going to collect, and what do I need on file to support the write-off?](https://uppago.com/resources/how-do-i-write-off-a-customer-invoice-i-m-never-going-to-collect-and-what-do-i)

_Reference date 2026-09-07. Statements are quoted verbatim from their sources; scope and verification dates are shown on each._