Retention is an amount held back from a subcontractor's progress claim until the work is finished or defects are fixed.
Before you start
- Accounts and items set up
The AccountRight way
Where to find it: Lists > Accounts and Lists > Items
- Create a liability account: Account Type Other Liability, Account Name Retentions Payable.
- Create an item with Item Number RETWHELD and Name Retainer Withheld. Tick I Buy This Item only and link it to Retentions Payable. Ignore the warning that the account is not an expense account.
- On the item's Buying Details tab make sure GST/S15 is chosen in Tax/GST Code When Bought. Click OK.
- Enter each progress bill using the Item layout with Tax/GST Inclusive ticked. Add the claim line and add RETWHELD as a negative amount for the retention.
- Repeat for each progress payment until the last one. If you hold no more retention after the first payment, enter later payments with no RETWHELD line.
- Before the final bill run Reports > Index to Reports > Purchases > Item > Purchases (Item Summary). Filter to RETWHELD, set Purchase Status to All Bills and pick the dates. This shows the amount withheld.
- Enter the final bill with RETWHELD as a positive amount. This clears Retentions Payable.
Limits in AccountRight
- Set up by hand. No retention report.
- The help records the retention on a purchase in the Item layout, because RETWHELD is an item.
Good to know in AccountRight
- The help example is a $125,000 job paid over five months, with 10 percent ($12,500) held back from the first payment, which is entered as -$12,500.
Example in AccountRight
Example Concrete Pty Ltd sends a progress bill and you withhold retention using the RETWHELD item.
| Line | Amount | Tagged to |
|---|---|---|
| Progress claim | $20,000.00 | Item layout line |
| Retention withheld | -$1,000.00 | Item: RETWHELD, negative line |
The bill is $19,000.00 before any tax. Retentions Payable carries $1,000.00 until the job is signed off.
Common mistakes
- Entering the withheld amount as a positive line. It should be a negative line using RETWHELD.
- Expecting a retention report. Track what is owed through the Retentions Payable account.
More help
- How to match a bill to a purchase order in AccountRight
- How to job cost bill records in AccountRight
- How to report contractor payments for TPAR from AccountRight
- How to record retention on a subcontractor bill (any system)
- All AccountRight how-to guides
- Pulsify setup guides
Sources
Last checked 2026-10-19. Confidence: confirmed.
Common questions
How do I set up retention in AccountRight?
Create a liability account Retentions Payable (Other Liability) and an item RETWHELD, Retainer Withheld.
How do I record retention on a progress bill?
On each progress bill, enter the withheld amount as a negative line using RETWHELD.
Is there a retention report?
Set up is by hand and the help does not describe a retention report. Pay the retention when the job is signed off.
Does Pulsify track retention?
No. Track retention in your accounting system or a schedule.
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