Progress billing & holdbacks


M

Marion Mitchell

I have a new client who does progress billing and holdbacks. They are not
using the qb system for proress billing as yet, they are keeping track of it
manually.

If I use the progress billing system in QB 2004 whereby I invoice am amount
(say $5,000.) - this shows up in the revenue, but on the same invoice I am
subtracting $500.00 as a holdback which i have posting to a HB receivable
acct. so the actual invoice is really $4500.00.

Confused. there must be a good way. Does the Manufacturing/Contracting
program have a good method for this?
 
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T

Tee

Marion Mitchell said:
I have a new client who does progress billing and holdbacks. They are not
using the qb system for proress billing as yet, they are keeping track of
it manually.

If I use the progress billing system in QB 2004 whereby I invoice am
amount (say $5,000.) - this shows up in the revenue, but on the same
invoice I am subtracting $500.00 as a holdback which i have posting to a
HB receivable acct. so the actual invoice is really $4500.00.

Confused. there must be a good way. Does the Manufacturing/Contracting
program have a good method for this?
It should still balance out at the end of the year. How do you plan to
handle the final invoice whereby you are looking to collect the retainage
held back? Invoices automatically post to A/R and you'll already have this
amount built up in the Retainage/HB A/R account so you can't record it on an
invoice again. Do you just plan to have the customer issue you a check of
their own accord, which you'll post against the HB account?

Two of the GCs I work for do progress billing. We only bill for the amount
we expect to receive and don't include a retainage line item. If the total
job is $1.2m then we bill what we expect to be paid that period and leave
the balance to be billed/paid intact. You could always do this..bill for
$4500..and make a text line notation that this bill is for $5,000 minus $500
retainage. This keeps everything neat and requires no special footwork
later on to record checks or invoices against retainage. It also leaves
your balance to be billed accurate.

I also do retainage for two of my clients who are subcontractors, working
for GCs, and have retainage held back on them until their portion of the
work is completed & gets a clean inspection. In their cases, I bill the GC
for the full amount of the draw, knowing they will withhold 10% for
retainage, and record the payment against the invoice. This leaves a 10%
invoice balance left in receivables and I let it ride there because its a
blatant reminder that the GC still owes us money. When an inspection is
completed I send a statement to the GC that shows the balances due by
invoice (from withheld retainage).
 
F

forked tongue

Tee said:
It should still balance out at the end of the year. How do you plan to
handle the final invoice whereby you are looking to collect the retainage
held back? Invoices automatically post to A/R and you'll already have this
amount built up in the Retainage/HB A/R account so you can't record it on an
invoice again. Do you just plan to have the customer issue you a check of
their own accord, which you'll post against the HB account?

Two of the GCs I work for do progress billing. We only bill for the amount
we expect to receive and don't include a retainage line item. If the total
job is $1.2m then we bill what we expect to be paid that period and leave
the balance to be billed/paid intact. You could always do this..bill for
$4500..and make a text line notation that this bill is for $5,000 minus $500
retainage. This keeps everything neat and requires no special footwork
later on to record checks or invoices against retainage. It also leaves
your balance to be billed accurate.

I also do retainage for two of my clients who are subcontractors, working
for GCs, and have retainage held back on them until their portion of the
work is completed & gets a clean inspection. In their cases, I bill the GC
for the full amount of the draw, knowing they will withhold 10% for
retainage, and record the payment against the invoice. This leaves a 10%
invoice balance left in receivables and I let it ride there because its a
blatant reminder that the GC still owes us money.
A very good practice. I've got my current job because the last person in my
position didn't and missed collecting the other 50% of a job which was supposed
to be a COD. A couple of months later when the commission on the job was due,
he couldn't hide it any more.
 
M

Marion Mitchell

Thanks I'll see if I can get the client to bill the full amount and then
have the GC deduct the holdback. I was checking back in their holdback
receivable account, and found approximately $4,000.00 which wasn't billed as
yet = stuff from Mar of this year and October from last year which I know
the project has been inspected and competed.

Thanks again everyone Marion
 
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I have a new client who does progress billing and holdbacks. They are not
using the qb system for proress billing as yet, they are keeping track of it
manually.

If I use the progress billing system in QB 2004 whereby I invoice am amount
(say $5,000.) - this shows up in the revenue, but on the same invoice I am
subtracting $500.00 as a holdback which i have posting to a HB receivable
acct. so the actual invoice is really $4500.00.

Confused. there must be a good way. Does the Manufacturing/Contracting
program have a good method for this?
Hold backs -If you are matching Revenues to Expenses can you invoice the HB at the end of the job when deficiencies lists are completed?
 
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Hold Backs

Holdbacks-- If you are matching Revenues to Expenses can you invoice the HB at the end of the job when deficiencies lists are completed?
 
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