Article

How to configure the customer retainage process for Microsoft Dynamics AX 2012

by Muhammad Burhan
Dynamics AX consultant, Maison Consulting and Solutions
November 07 2013

Retainage is the money that is owed by an upstream party to a downstream party to ensure the agreed project work satisfies the contractual obligation. It is an essential part of the billing cycle in the contracting and construction industry. To understand how to manage retainage - also known as retention - in the context of a business process managed by Microsoft Dynamics AX 2012, this article will explore both the business rules and system setup behind the model.

There are two types of retainage - withheld "by customers" and withheld "from vendors". This article will only cover retainage withheld by customers.

Retainage withheld by customers

A customer withholds a certain percentage from each submitted approved project invoice based upon contractual obligations. These withheld amounts are released at different phases or completion milestones of the project.

System setup and configuration for a Customer Retainage

I am using the "USSI" Demo Company in Dynamics AX to configure customer retainage process for this article. The steps below explain how to setup and configure the system for customer retainage.

1. Create customer retainage accounts in your COA under the heading of an Assets.

2. Setup a customer retainage posting profile from:

"General ledger > Setup > Posting > Accounts for automatic transactions".

Field

Description

Posting Type

Select Customer Payment Retention Receivable

Main account

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AX 2012 AX 2012 R2 Accounting Construction Dynamics AX Invoice Processing
About Muhammad Burhan

Presently I am working in Intergen Ltd a renowned Microsoft Gold Partner in New Zealand and Australia region as a Dynamics Consultant.

I have more than 13 years' industrial experience. I am experienced in implementing various ERP modules (Finance, Production, Supply Chain, Project Management and accounting and HRM) of Microsoft Dynamics AX 2009 & 2012 from initiation to closure.

As a Microsoft Certified Technology Specialist and PMP certified with a Masters degree in computer science, I have extensive technical skills, and the ability to work cross functionally in a time intensive environment, I eagerly await more career challenges that can be met by my enterprising attitude and organizational capabilities.

Implementation experience in the following industry sectors:

  • Construction Industry
  • Engineering and Contracting
  • Manufacturing
  • Ceramics and Porcelain Tile Manufacturing
  • Professional Services
  • Wholesale and Trading
More about Muhammad Burhan
Meredith
Submitted by MEREDITH ILANG-ILANG on Wed, 11/20/2013 - 13:12 Permalink
I have done the steps that you have shown above but I still do not see it posting correctly after I invoice my on account without WIP. It still has the full sales amount as credit and AR as debit, but prior to me finalizing my invoice, I looked at the totals and the print preview and I saw the retention there. Even on the Control tab where it says, Customer Retained Payments. So now I'm confused. I see on the pending transactions my retained payments per invoice, so I posted it on the fee journal but I still could not see a proposal after that. Please help. Thanks, Meredith
Muhammad
Submitted by hmburhan on Thu, 11/21/2013 - 03:18 Permalink
Hi Meredith, I am glad to know you have almost completed the process by following the Article. Please check your Fees journal, is there any pending entry related to retention’s category? If you would find the transaction, please share the error message. Usually, this problem occurs when due to some reason the system enables to post retention's fees entry. Specially when worker associated with Fees journal under the Default value tab is different than Logged in Ax user. This fees entry transaction should be posted automatically at the time of posting customer invoice. Then, it will correctly impact on your GL, only in this case the system shows the retention transaction under Request retained amount section, to create invoice proposal to request retention amount. Cheers,
Abdul
Submitted by abdulsirajuddin on Mon, 02/11/2019 - 02:18 Permalink
Retention amount for previous month not posting in project module when the current month is on hold. It showing a message that the period is closed. But the invoice is posing with out retention in project transactions and GL. In SSRS report showing the retention. can you provide a solution to rectify this error.