Retention Discount
“Retention Discount” is a type of discount with a specific nature where the discount is calculated on the amount retained until the project period or the agreed-upon duration for the discount to be returned to you expires, so it can be easily recovered. This requires adjusting your accounting operations to suit the retention of the discount when deducted from the amount and when it is refunded, without affecting your accounting aspects, financial reports, and statements.
Apply the Retention Discount in the Invoice in Enerpize
Enerpize allows you to add the retention discount to the invoice simply. First, make sure that your account follows real estate investment activity. Let’s take an example of a 5% maintenance retention discount.
To do this, go to “Manage Invoices” under “Sales” in the main menu to edit an existing invoice, or choose “Create Invoice” to add a new one.
Then select the client, the service you provide, and its price.
Then go to the discount and adjustment section, add a 5% percentage next to the “Calculate Retention” button, and click on it. You will find that the total invoice amount is reduced by the discount value.
After a year has passed since the final project delivery, which means you have the right to refund the client a 5% maintenance discount, you can create a payment entry for the client for the maintenance discount that they have withheld from you as follows:
From the “Journal Entries” under “Accounting” in the main menu, you can click on the entry related to the invoice containing the maintenance discount that you want to refund to the client. Click on “Add Entry” while opening the old entry that includes the maintenance discount.
In the existing entry, you have the client’s account number, the maintenance discount account number, and the value of the maintenance discount.
In the new entry, you can add the client’s account as a debit with the discount amount and the maintenance discount account as a credit with the same value, then save the entry. You should add the payment to the entry at the time when you receive the value of the maintenance discount from the client.
