When an owner holds back a percentage of each progress payment, the held amount is retainage receivable: an asset you have billed and earned but can’t collect until the contract’s release conditions are met (usually substantial or final completion, with closeout documents and final lien waivers). It’s tracked separately from regular accounts receivable and aged in its own bucket.
Why it matters
On long jobs retainage receivable can exceed the whole profit on the job. Lenders often exclude it from your borrowing base, and it’s easy to forget to bill its release.
Worked example
Riverside Pay App #9 (sample data) bills $2,310,400 this period at 10% retainage: $231,040 goes to Retainage Receivable, bringing the job’s balance to $3,300,000, which is G702 line 5.
Common mistakes
- Treating retainage as collectible cash in forecasts.
- Not billing the release when the trigger is met.
How os.construction handles it
In the accounting preview, AR invoices post retainage to its own receivable account and receipts can apply cash to the retainage bucket. Retainage release billing is not built yet. See Accounts receivable.