Guides · Invoicing
Retention money in invoicing
Retention money is a slice of a bill the buyer deliberately holds back — often on a contract or project — until some condition is met, like completion or a defect-free period. It is billed but not yet collectable.
What retention is and why it exists
On many project and contract supplies, the buyer pays most of an invoice but retains a portion as security that the work holds up. That retained amount is released later, once the agreed condition — final completion, or the end of a warranty window — is met.
From the supplier's side, retention is money it has earned and billed but cannot yet collect, which makes it a special kind of receivable.
Why it changes the receivable picture
Retention distorts a simple outstanding figure: part of the balance is genuinely overdue and part is retained by agreement and not yet due. Treating the two the same either overstates what is chaseable or hides money that should be collected.
So retention needs to be tracked as its own line with its own release condition, separate from ordinary overdue amounts.
How Lekha tracks what is collectable
Lekha tracks each bill to payment with buyer-wise aging and a follow-up log, so what has been paid, what is genuinely outstanding, and what is still to come can be followed per bill.
Lekha records what your documents say and tracks the money on both sides — what you owe and what you are owed. It records and tracks; it does not replace your accountant.
Questions
- What is retention money?
- A portion of an invoice the buyer holds back as security until an agreed condition — like completion or a defect-free period — is met, then releases.
- Is retention money overdue?
- Not while the release condition is unmet. It is billed but held back by agreement, which is different from an ordinary overdue amount.
- Why track retention separately?
- Because lumping it with ordinary outstanding either overstates what you can chase now or hides money you should be collecting once the condition is met.