Dealing with Retainage


B

Beth3

How do I deal with retainage so that I don't show very overdue A/P and A/R
balances? I used to use an item that pointed to a liability/asset account
and enter a credit at time of payment, but items cannot reference liability
accounts in SBA.
 
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C

Chris Schatte

Hi Beth3,
This is how we do it. Create another invoice with the amount of retainage
separate from the original for A/R. Payables for us are paid when due. When
retainage payment is made the job costs equal to what we projected.
 
A

Allan Martin

Chris Schatte said:
Hi Beth3,
This is how we do it. Create another invoice with the amount of retainage
separate from the original for A/R. Payables for us are paid when due.
When
retainage payment is made the job costs equal to what we projected.

Chris,

That is a kluge, SBA does not have retainage functionality and at 39.99
should not be faulted for same.
 
B

Bud Aaron

It's only a kluge if it doesn't work - and that's TWO big words.
Congratulations!!!!!!!!
 
A

Allan Martin

Bud Aaron said:
It's only a kluge if it doesn't work - and that's TWO big words.
Congratulations!!!!!!!!

It doesn't work, and there are a lot more where that come from.
 
C

Chris Schatte

Allan,
Please provide details of why it doesn't work. Specifics please.
You know, how and which account posting would be wrong to = the bid price.
Specific details of the user function difference in qb vs SBA sp2. What is
missing? Where are the details in your reply?
Just trying to learn something here as well as the OP...

Chris
--
use the Office Online web based newsreader here:
http://www.microsoft.com/office/community/en-us/default.mspx
In Office System 2003 applications:
Help/Assistance Pane/Communities
SBA Spotlight
 
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A

Allan Martin

Chris Schatte said:
Allan,
Please provide details of why it doesn't work. Specifics please.
You know, how and which account posting would be wrong to = the bid price.
Specific details of the user function difference in qb vs SBA sp2. What is
missing? Where are the details in your reply?
Just trying to learn something here as well as the OP...

Accounting applications that support retainage will automaticaly split an
invoice up into two parts automatically. One part, a certain percentage
gets posted to A/P the balance to retainage payable. When the retainage
period is up, the program should automatically reverse the retainage and
post the accounts payable account. The terms of both payables can and often
are different.. I do not expect to see this type of functionality in SBA or
QB.
 
C

Chris Schatte

Allan, Thanks for the comments.
So what is your suggested "workaround" for qb and SBA users that have
contracts (Government, General Contractor, etc...) that require retainage as
a part of the contract?
 
B

Beth3

QB workaround: For A/R retainage, you post a credit at the time the invoice
is paid to a retainage item that links to A/R retainage (other current
asset). When you receive the retainage, you apply the deposit to this
account. For A/P retainage, you post a credit at the time you pay the bill
to a retainage item that links to A/P retainage (other current liablility)
using the item screen to post to the job. When you pay the retainage, you
cut a check and apply it to this account.

An SBA workaround would be to create double customers and vendors, one as
regualr and one as retainage (ABC Co and ABC Co Retainage) so you can see
what is retainage (can be held for years) and what is current
payable/receivable.

Beth
 
C

Chris Schatte

Beth3,
Thanks, that is what we do now, dependant on how long the retainage is held.
Most of ours is upon job completion 30-90 days.
Actually was trying to finally get a straight answer from Allan. He is our
resident critic on this group...
 
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A

Allan Martin

Chris Schatte said:
Beth3,
Thanks, that is what we do now, dependant on how long the retainage is
held.
Most of ours is upon job completion 30-90 days.
Actually was trying to finally get a straight answer from Allan. He is our
resident critic on this group...
Allan does not have an answer, at least not one I would want to use.

If retainage accounting is frequent and an important part of a business
then perhaps programs like QB and SBA are not the proper accounting
solution.

Move up the software food chain is my solution.
 
C

Chris Schatte

Allan,
Forgot to ask you (in another post) if qb offers a 5 user product for 39.99
or even at SBA's regular price.
 
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A

Allan Martin

Chris Schatte said:
Allan,
Forgot to ask you (in another post) if qb offers a 5 user product for
39.99
or even at SBA's regular price.

When QB first came out Intuit gave their product away also. However if 93.7%
of recent retail sales for small business software went to QB you do not
have to nor should one give it away. That said, if you compare both products
there is a big difference in features and quality. More than enough to
compensate for the price differential.

SBA is a nice little program, but not so nice if the user is dumb enough to
switch from using QB.
 

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