AP retainage lets you track amounts withheld from vendor bills and purchase orders. In Adaptive, you can set a default retainage code, apply retainage rates to purchase orders, automatically calculate retainage on linked bills, and review retained amounts from the job budget.
1. Set Up Retainage
To set up retainage:
Go to Settings.
Open General.
Find the Retainage section.
Turn on Enable retainage.
Select a Default cost code / account.
Optional: Turn on Set default rate on POs and enter a default AP retainage rate.
The default retainage code is used when Adaptive creates or identifies retainage lines.
Important: The default code is required for retainage tracking. If both AR and AP retainage are enabled, use a cost code that works for your retainage reporting across both workflows.
Note: The Default rate on POs applies to purchase orders created going forward. Existing purchase orders are not automatically updated when this setting changes.
2. Use Hold Retainage on Purchase Orders
When AP retainage is set up, purchase orders can use Hold retainage.
To hold retainage on a purchase order:
Create or open a Purchase order.
In the purchase order details, select Hold retainage.
Review the retainage percentage.
Save the purchase order.
If a default AP retainage rate is set in General settings, new purchase orders can default to that rate.
The Hold retainage label may show:
The retainage percentage, such as Hold retainage (10%)
Variable rate, if different lines use different rates
3. Adjust Retainage on PO Lines
You can adjust retainage on individual purchase order lines when a different rate should apply.
Use this when:
A change order line has a different retainage rate
Some lines should not hold retainage
The PO needs variable retainage by line
Note: The retainage rate on a purchase order helps Adaptive calculate retainage on linked bills. It does not change the total purchase order amount.
4. Link Bills to Purchase Orders
When a bill is linked to a purchase order with retainage, Adaptive can automatically suggest the retainage amount to hold.
Adaptive calculates retainage from the retainage rate on the linked PO and the bill amount. The bill keeps the full cost on the regular cost line, and Adaptive adds a separate retainage line using the default retainage code.
This allows the job budget to show the full cost while payment reflects the amount net of retainage.
Important: If you change retainage on a purchase order after bills have already been linked, the retainage lines on those linked bills are not automatically recalculated.
5. Review Retainage Detected From Bills
Adaptive can also detect retainage from an attached bill image.
When Adaptive detects retainage, you may see a message such as:
Retainage amount pulled from the attached bill image
Retainage amount auto-calculated from the % set on the linked PO
Retainage amount pulled from the attached bill image does not match the % set on the linked PO
If the attached bill image and linked PO calculate different retainage amounts, review the bill before approving or syncing.
6. Manually Hold or Release Retainage
You can also manage retainage manually by adding a bill line coded to the default retainage code.
Use this when:
The bill is not linked to a PO
You need to make an adjustment
You need to release retainage previously held
To manually hold retainage, add a negative line coded to the default retainage code.
To manually release retainage, add a positive line coded to the default retainage code.
Important: Lines coded to the default retainage code are treated as not billable and are not added to a draw.
7. Review Retainage in the Budget
To review retainage on a job:
Open the job.
Go to the Budgets tab.
Filter or search for the default retainage code.
Open Actual costs to date for the retainage line.
Use this view to review bill lines coded to retainage and confirm held or released amounts.
8. Summary
To use AP retainage successfully:
Enable Retainage in Settings > General.
Select a Default cost code / account.
Optional: Set a Default rate on POs.
Use Hold retainage on purchase orders.
Link bills to purchase orders when you want Adaptive to calculate retainage automatically.
Review any mismatch between retainage detected from a bill image and retainage calculated from the linked PO.
Use positive and negative retainage lines for manual releases or adjustments.
If you have any questions or want to share feedback, feel free to reach out at [email protected].