What are Retentions?

A retention is a portion of a payment that is withheld until the completion of a project to ensure that all contractual obligations are met. Retentions are commonly used in the construction industry to provide a financial incentive for contractors to complete the project to the required standards and rectify any issues.

Project Managers are often the contract administrator / superintendent who will receive progress claims from the construction contractor, performing detailed assessments of work completed and applying any retentions, before issuing a Payment Certificate. This process is often aided by cost managers and quantity surveyors, and governed by the Security of Payments Act.

Challenges with Retentions, Payment Claims & Certification

Common challenges we see managing retentions & payments.

❌ Time Consuming: Setting up & maintaining spreadsheets to track progress claims & retention amounts, produce payment certificates, is error prone and time consuming.

❌ Tracking and Monitoring: Keeping track of accumulating retention amounts and release conditions across multiple payments can become overwhelming.

❌ Releasing Retentions: Ensuring timely and accurate release of retentions in accordance with contract terms and conditions.

❌ Incorporating Actuals: Manually integrating or updating actuals from an ERP system or other reports from finance/accounting departments is extremely difficult and boring.

❌ Reporting: Formatting / transposing spreadsheet tables into charts and visualizations for reporting takes a huge amount of time for an unsatisfactory, out of date result.

❌ Compliance: Ensuring accurate financial reporting and compliance with regulations such as the Security of Payments Act is complex and never certain.