Use Retention Accounting for Accounts Payable (tick box)

Used to control whether retention is applied to the Accounts Payable invoice process or not

Apply Retention After Tax (radio box)

Used to ensure the retention process is applied after tax has been deducted

Apply Retention Before Tax (radio box)

Used to ensure the retention process is applied before tax has been deducted (please note – this is the required option for this training manual)

Retentions Payable Acc

The selected General Ledger account will hold the retained values from any claims or invoices that are processed. This is normally a liability type account in lieu of the fact that these sums are payable at the end of the retention period.

Deferred COS Acc

The selected General Ledger account is used to offset the retained amount as the Cost of Sales are not yet recognised in the Profit & Loss (as tax has not been paid on the retained amount).

DL Inv Recoup Acc

Applicable only to Development Ledger users. If this module is not in use, select the same account as per the Deferred COS account (mentioned previously).

For Development Ledger users, this account is used to reduce the amount of capitalised inventories written into the General Ledger. This reduction account is not required for Job Costing transactions as Job entry transactions only have one WIP account, but Development Ledger may have many.

Although the Job Costing defaults control whether retention is used or not, retention percentages will need to be applied to each individual commitment or transaction. These retention parameters are then used during the progress claim/invoice entry process.