Retainage Accounting: How to Track and Collect What You're Owed

Retainage is earned money you can't spend yet. On a busy backlog it can add up to more than a month of payroll, so it deserves its own tracking.

Track it separately

Use separate accounts for retainage receivable and retainage payable. Age retainage on its own report so it doesn't distort your regular receivables aging.

Get it released faster

1. 1Know the release terms in every contract before the job starts.
2. 2Start closeout documents and punch list early.
3. 3Request release in writing as soon as you hit substantial completion.
4. 4Follow up on a set schedule, and track the date of every request.