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Can we include retainage as payment due this period on a final invoice or does retainage need to be invoiced separately
Can we bill for retainage on our final invoice or does retainage need to be billed seperately as a final ?
2 replies
Dec 4, 2019
First, if the contract has specific requirements for billing retainage, then those requirements should be followed. But, if the contract is silent, then there may be some flexibility.
As long as it's apparent what amounts constitute retainage and what amounts are being billed as usual, it might be permissible to include both retainage and other amounts on the same bill. But, to be sure: lumping in retainage amounts with other amounts being invoiced might cause some confusion or even dispute. Retainage amounts may represent amounts owed for work that's been performed - but it's generally released a bit differently from ordinary progress or final payments.
With that being said, I'm no construction accounting expert - so it might be helpful to reach out to an expert in construction accounting for additional clarity.
For additional discussion on retainage: The Ultimate Guide to Retainage in the Construction Industry.
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Dec 11, 2019
Retainage is usually billed separately at the end of the job, and the retainage invoice is often just a standard, non-AIA invoice. It is billed separately because those 5-10% is all that should be owed at that point, so you would have a better cash flow during the project work.
Hope this helps.
Let me know if you any more questions,
Elizabeth Boals