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Reconciliation Pattern

Retention Money

Track retention holdbacks and release against project milestones

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What this pattern solves

Construction, engineering, and infrastructure projects routinely withhold a percentage of contractor payments (typically 5–10%) as retention money — held until project completion or defect liability period. Managing retention across dozens of contracts creates a receivable that is difficult to track in standard accounting systems. The Retention Money pattern tracks retention deductions per invoice, monitors the cumulative holdback per contract, and reconciles retention releases against project completion milestones or performance certificates.

Use this pattern when:

  • You receive retention deductions on construction or project invoices
  • You withhold retention on contractor payments
  • You need to track cumulative retention per contract and release schedule
  • Retention releases are tied to project milestones or performance certificates
  • You need audit-ready documentation of retention balances per contract

How it works in TransactIG

01

Configure retention terms

Retention percentage, cap, and release conditions are configured per contract. TransactIG reads these terms when processing each invoice.

02

Track retention per invoice

On each payment, the retention amount is logged against the invoice and contract record. Cumulative retention is maintained per contract.

03

Match retention release

When a milestone is certified and retention is released, TransactIG matches the release payment against the accumulated retention balance for that contract.

Matching rules

Retention deduction
Payment net = gross − TDS − retention at configured percentage.
Release match
Release payment matches cumulative retention balance for contract.
Partial release
Milestone-based partial release matched against percentage of retention.

Variance taxonomy

V
Retention deducted
Holdback applied per contract terms.
V
Retention released — full
Full retention balance released at project completion.
V
Retention released — partial
Milestone-based partial release.
V
Excess deduction
Payer deducted more than the contracted retention percentage.

Frequently asked questions

Can TransactIG track retention across hundreds of contracts simultaneously?

Yes. Retention tracking is per-contract. TransactIG maintains individual balances for each contract and provides a consolidated view of total retention receivable or payable.

What if the retention release is tied to a performance certificate number?

Release conditions can be configured to require a performance certificate reference before the retention match is confirmed.

See the Retention Money pattern in action

Terra Insight will run a live TransactIG demo using this matching pattern on data from your industry vertical.

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