[jloverly6]

Just found out a project is not holding retainage... their ap dept. has been adding the 10% retainage to our invoice amount. When I tried to figure it out, I added the 10% to the invoice amount. He explained that retainage was added to the gross amount and not net. When I reversed the formulas it did work out but can't understand the logic - anyone?
Thanks!:confused:

[morgaine300]

Are you saying that the total invoice includes this retainage as a percent of the total invoice? i.e. the net amount is 90% of the total?

For instance, if I had something that was $14 and add on an amount that would 10% of the amount after the addition, I can take $14 and divide by 90% and get $15.55. 15.55 - 14 = 1.55. The 1.55 is 10% of the $15.55, not of the $14. Is this what you're saying?

I looked up retainage and what I don't get is why it's being added to your invoices at all. But then, I'm not quite sure I understand who is paying who here. i.e are they sending you invoices and they are adding it? Or you are sending them invoices and they are adding to that? Either way, I don't get why they're adding it at all. Unless the "net" billings are the part to be paid now, and the "gross" is the actual total bill. In which case, it makes total sense. The 10% held out would have to be on gross.