Definition

Retention receivable (or retainage receivable) is the amount of progress payments withheld by the owner that the contractor expects to receive upon completion (or per contract release terms). It is an asset on the balance sheet and is collected when the owner releases retainage—often at substantial completion and at final release.

Why It Matters

Retention can be a large balance on long or high-value jobs. It affects cash flow and working capital. Tracking retention by job and aging (e.g., how long it has been held) helps with collection and forecasting. Accounting treatment (when to recognize revenue on retention) can follow GAAP or tax rules and may differ from when it is billed.

Field Example

Job has $200,000 in progress billings; 10% retainage = $20,000 held by owner. That $20,000 is retention receivable. At substantial completion, owner releases $10,000; retention receivable drops to $10,000 until final release. The contractor records the receivable and collects when the owner pays.

Calculation / Formula (if applicable)

Retention receivable (per job) = Sum of retainage withheld on all progress billings − Sum of retainage released. Total retention receivable = Sum across all jobs.

Software Application

Track retainage amount on each progress billing and total retention receivable per job. When owner releases retainage, record payment and reduce retention receivable. Report retention by job and aging. Include in accounts receivable and cash flow forecasts. Support partial releases (e.g., half at substantial completion).

Tooltip Version

Retention receivable is the amount the owner is holding from progress payments until completion; you track it so you know what’s still to collect and when to expect release.

Retention Receivable