Retention held in someone else's bank
Retention is profit you already earned, held in someone else's bank. Here's how to track it by job and know when it's due. Then here's how to get it released at closeout.
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The money you earned and forgot
On a lot of jobs, the GC keeps part of every pay app until the work is done. It adds up fast. At $5M in revenue with typical retainage, the amount held across your jobs can be a six figure sum.
Then the job ends and the money stays in the GC's account. The punch list drags, the owner is slow, someone leaves the GC, and you stop calling because the job feels over. Eventually the number gets written off, or never noticed.
That money isn't a favor. It's your margin on the job. On many jobs it's more than the net profit you reported.
Track it by job
Start a sheet with one row per job. List the contract, the retainage percent in the contract, the amount held to date, and the amount you'd expect at closeout. Update it each time you send a pay app, since the pay app already shows the retainage held.
Add the date it's due. Read the contract for the trigger, which might be substantial completion, final acceptance or a set number of days after that. Many states set limits on how long a GC or owner can hold it, and our retainage by state page lists them.
Add a column for what's needed to release it. Common items are the final lien waiver, the closeout documents, warranties, as built drawings and a punch list sign off. Without these, the GC has a good reason to keep waiting.
Review the sheet once a month. Any job past substantial completion with money still held gets an owner and a date to call. Write the date on the sheet.
Closeout paperwork that releases it
Start the closeout package before the work ends. Gather warranties, manuals, certificates and lien waivers as you go, and not in the last week when the crew has left. A complete package sent on the day of completion often gets paid a month earlier.
Send a final pay app that bills the retainage as its own line, with a short letter pointing to the contract clause. Send it to the person who approves payment, and not only to the job contact. Ask for a payment date and write it on your list.
If it's late, follow the statute. Many states have interest or notice rules. A written notice to the GC citing the date often gets a check faster than another phone call.
How CFOS does it
CFOS for QuickBooks keeps retainage on the pay app. The schedule of values on each G702 and G703 includes the retainage percent, what's held this period and what's held in total, so the number comes from the billing. It doesn't come from a side sheet.
You can see what's held across all your jobs, and revisions are kept. Pay app due dates send reminders to the PM. The AR aging and collections list include the old retention you still haven't been paid.
COIs and lien waivers are read when they come in and flagged red when missing or expiring within 30 days, so the paperwork to release your own retention is less likely to be late. Closeout is where retention gets stuck. For state limits on holding it, see the retainage by state page.
At $2M, one sheet with a row per job does the job. At $8M with twenty open jobs, retention is large enough to track in the same place you bill. That's the only way it stays current.
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We email you when CFOS for QuickBooks opens, plus a few updates before then. Your address stays with Run On CFOS. One click unsubscribes.
30 days free, a 90-day money-back guarantee, and cancel anytime. It opens January 2027. We email you the day it opens.
What people ask
How do I know how much retention a $4M sub has outstanding?
Add the amount held on each job's last pay app. If you don't have those numbers in one list, build the list. You can't collect what you can't see.
Should the owner of a $6M company chase retention personally?
At least the biggest ones. A call from the owner to the GC's owner or controller often gets a check the PM's calls didn't. Keep the PM on the paperwork.
When is retention due on a typical $5M job?
It depends on the contract and your state. Many contracts tie it to substantial completion or final acceptance. The retainage by state page lists the statutory limits.
Can I bill retention in CFOS for an $8M company?
Yes. Retainage is kept on the pay app. The held amount and the release are billed on the same schedule of values.
What if I wrote off retention on a $3M job years ago?
Check your state's deadlines and the contract. Some claims can still be made. A short letter costs little.
- Job costing for contractors doing $1M to $10M a year
- G702 and G703 pay apps from your schedule of values
- Keep your profit
- One price. Every module. Priced by your revenue.
- Use all of it, or just the part you need
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