Project Invoicing, Retention

[Former Member]

Hi, I've having a scenario whereby retention is required but seems like there is no such function in ByDesign. Would appreciate some assistance if anyone came across a solution on the possibility on performing the retention function in customer invoicing?

Regards,

Jae

[Andie]

Hi,

I do get this requirement very often with my customers. This process is not fully supported in ByD but there are some workarounds. I will try to give you some hints.

*Keep in mind that you need to align your process with Revenue Recognition*

1. Insert a "Credit Line" on the project invoice request.

1.1 Sales Order

When you prepare the SO you split up the retainage on a separate line. Let's say that the total value is 100 k with 10% retainage.

(I think you can put the full amount on 1 line too. )

1.2 Project Invoice Request (PIR)

In th PIR, there is a hidden field, named "Debit-Credit". You may want to unhide that field.

When you prepare the PIR you split your amounts like this :

On the Debit line in enter 100k and on the credit line you put 10k

1.3 Reclass to Balance Sheet

The result of doing this is that the 10 k will hit the PnL, this is a behaviour you can't avoid.

You will either have to create a manual JE to reclass the amount or create a PDI solution to automatically reclass the amount to BS. To track the retainage into the customer you may want to use the JE type 00085- Manual entry for AR and select the customer account.

Maybe you want to explore the "Repost " functionality to swing the balance into a different AR account

2. Create a script in the customer form

Another workaround is to "tweek" the customer invoice form with script.

2.1 Sales Order

same Step as 1.1

2.2 Project Invoice Request (PIR)

When is prepare the PIR you invoice 90 k, the amount without retainage. But in the customer form you create a script that will retrieve the gross amount. You can create an extension field in the SO with extension scenario to the customer invoice. In that extension field you would insert the % of retainage and use that field in the customer form to retrieve the grosss amount and split it up in the customer invoice form in 2 line

100 k

(10)k

Net : 90k

2.3 Reclass to Balance Sheet

You would still need to do a manual journal entry to track the retainage in the customer AR. This journal entry would be DT - Balance Sheet " UnbilledRetainage @ CT Balance "Due Retainage"

These workarounds aren't perfect but I have implemented these at several customers and it works fine. You may want to have the discussion with your customers to select the most suitable option. There are probably other variables to consider in your scenario - be careful

Hope this helps!

Andréanne

[SUDHIRJAI]

Hi Sahalya,

Let me explain the "Retention". Currently one of our customer required this functionality in SAP ByD.

Retention is a percentage (often 5%) of the amount certified as due to the contractor on an interim certificate, that is deducted from the amount due and retained by the client. The purpose of retention is to ensure that the contractor properly completes the activities required of them under the contract.

In India all the project based company's will face this payment terms. Is there any functionality to capture this in outstanding invoice as retention money.

For Ex: Total project value will be 100000 INR for customer "A"

based on the payment term milestone 65 % in the first payment another 30% will be pain in second payment the reaming 5% as retention it will be paid after three month from the project completion.

when ever we generate the outstanding report we should show this as "retention" for that project.

Regards,

Sudhir.Jaisankar

[SahalyaBegum]

Dear Jeo,

Could you please tell us what is meant as retention?

Best regards,
Sahalya