When entering a Job Related Accounts Payable invoice linked to a Contract Management Progress Claim Certificate, the amount of retention on the invoice comes directly from the progress claim certificate as entered in the Contract Management module.
In the example below, a progress claim certificate has been entered against a contract (as per the contract in section 2.4) with 20% completion of the contract. The contract was for $30,000, so the claim for 20% works out to be for $6,000.
As per the settings in the Job Costing defaults, the amount of the retention has been deducted from the claim amount prior to applying any GST.
When entering the Job Related Accounts Payable invoice via in the Job Costing module (ensuring it is linked to the progress claim), the calculations are as follows:
The table below lists the Journals created by the above transaction, showing the distribution to the General Ledger accounts.
|
Account |
Account Name |
Description |
Debit |
Credit |
|
30100 |
Trade Creditors |
AP Invoice - BFORM - BRISBANE FORMWORK |
|
$5,940.00 |
|
10850 |
Work in Progress |
Concreting - BFORM - BRISBANE FORMWORK |
$5,340.00 |
|
|
30575 |
GST Paid |
Tax Payable - BFORM - BRISBANE FORMWORK |
$600.00 |
|
|
30200 |
Retentions Payable |
AP Invoice - Retention BRISBANE FORMWORK |
|
$660.00 |
|
30386 |
Deferred COGS - AP |
AP Invoice - Deferred BRISBANE FORMWORK |
$660.00 |
|
A subsequent Progress Claim is entered to 75% of 30,000: $22,500 less previous claimed $6000 = $16,500. Note that the amount of retention has capped at $900, as 5% of contract $30,000 is $1,500 and previous claim retentions totalled $600.
This can be summarised below
|
Progress Claim, cumulative |
$22,500 |
|
Previous Claim |
$6,000 |
|
Current net claim |
$16,500 |
|
Retention Cap (5%) |
$1,500 |
|
Previous Retention |
$600 |
|
Retention balance |
$900 |
Actual retention is $900 being the lesser of 10% of Progress claim and retention balance.
Claim works out to be $16,500 less $900 retention = $15,600 + 1,560 GST.
|
Invoice value |
$16,500 |
|
Retention (cap at 5% contract value) |
900 |
|
Net payable |
$15,600 |
|
GST (10%) |
1,560 |
|
Total payable |
$17,160 |
The corresponding Accounts Payable invoice then looks as follows:
The table below lists the Journals created by the above transaction, showing the distribution to the General Ledger accounts.
|
Account |
Account Name |
Description |
Debit |
Credit |
|
30100 |
Trade Creditors |
AP Invoice - BFORM - BRISBANE FORMWORK |
|
$17,160.00 |
|
10850 |
Work in Progress - |
Concreting - BFORM - BRISBANE FORMWORK |
$15,600.00 |
|
|
30575 |
GST Paid |
Tax Payable - BFORM - BRISBANE FORMWORK |
$1,560.00 |
|
|
30200 |
Retentions Payable |
AP Invoice - Retention BRISBANE FORMWOR |
|
$990.00 |
|
30386 |
Deferred COGS - AP |
AP Invoice - Deferred BRISBANE FORMWORK |
$990.00 |
|