Handling Retention

SusanSusan Member Posts: 27
edited August 2016 in Accounts Hosted

Hi,

We are involved in the Building Industry where projects have retention - 2.5% of project value withheld from payment for 12 months after the project is completed.

I would like to move these retention amounts out of AR and into another AR type account called Retention. This is so that it doesn't show as an outstanding as it's not due receivable. Also to be able to know the value of Retentions as a whole.

Started to try this by creating an item called Retention which'll hit the Retention account but I'm not able to create an item to hit a non PL GL account. And in Sales Invoices, I can't seem to hit a specific GL account like with Purchase Bills.

I used to be able to do something in MYOB but can't seem to recreate in Reckon.

How I process to get a net result that is:

* CR AR
  DB Retention - (AR type account)

And then the reverse after 12 months?

Suggestions?

Thanks,

Susan

Comments

  • Kevin SilberbergKevin Silberberg Member Posts: 85
    edited July 2015
    One approach is to create an Other Current Asset: Retention.  This is a Balance Sheet account which can be used to record monies whose payment is deferred but will occur in the current financial year.  Then the journal to capture the Retention amounts would be Credit AR, DB Retention (Other Current Asset type account).
  • Kevin SilberbergKevin Silberberg Member Posts: 85
    edited July 2015
    Further to my earlier posting, when funds are received in relation to retention amounts, Debit Bank,Credit Other Current Asset:Retention account.
  • SusanSusan Member Posts: 27
    edited November 2015
    Thanks Kevin.
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