What is – Retainage Release in Oracle Fusion.How to process Complex Work Order

What is retainage release

Retainage in Oracle fusion is the process where a percentage of a committed amount that is held for payment until a specified date.

For example, you can pay the retained amount after the completion of the contract, service, or receipt of all items on an order. If you create a voucher for 100 with retainage of 10 percent, the actual payment will be 90, with 10 held as retainage.

You release retainage by entering a payment voucher for the amount that you want to release. Note that you can release retainage and create a voucher at the same time.

For example, you issue a purchase order for 2000 against a billable job account. You receive an invoice from the vendor which may or may not indicate the retainage amount. You create a voucher for 2000 with retainage of 15 percent. Thus, the actual payment will be 1700, with 300 held as retainage. The 2000 creates a debit to the billable job account per the purchase order with a 1700 credit to the A/P trade account. The retainage of 300 creates a credit to the A/P retainage account. This fully relieves the 200 commitment.

When appropriate, you release retainage either with or without a subsequent invoice from the vendor. In either event, the initiation of retention release is a manual process.

You release retainage by entering a payment voucher for the amount that you want to release. In this example, the payment of 300 creates a credit to the A/P trade account and also creates a 300 debit to the A/P retainage account.

How to create Retainage release setup in Oracle Fusion

1.How to setup Complex Work Purchase Order

2.Retainage Account

3.How to create Standard Invoice with Retainage

4.Create Retainage Release Invoice.

5.To Create Retainage Release Invoice from Supplier Portal make sure Payables feature= “Supplier portal Invoicing enhancement” is enabled

Setup process for Retainage release

Setup Manage Document Style

Setup Retainage Account in Manage Common Options for Payables and Procurement

Create Purchase Order with Retainage Payment Terms

The Retainage Rate,Maximum Retainage Amount

Create Order

Create Standard Invoice matching to Purchase Orde

The Retainage Account defaults from Common Options and this account is not editable

Standard Invoice with Retainage (With Tax):

-The tax is calculated on Net of Retainage Amount (Line amount – Retainage Amount)

Retainage Release Invoice with Tax:

  • The tax is calculated on the Retainage Release amount

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