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Retention Tracking Procedure

Document Type: Procedure
Version: 1.0
Last Updated: February 2026
Distribute To: AR Team, Project Managers

Purpose​

Establish procedures for tracking, managing, and collecting retention to ensure maximum cash flow.

What is Retention?​

Retention (retainage) is a percentage of each progress payment withheld until project completion to ensure contractor completes all work satisfactorily.

Typical Retention Rates:​

  • Private work: 5-10%
  • Public work: 5% (often regulated)
  • Reduction: 50% at substantial completion (varies)

Retention Tracking​

Information to Track:​

FieldDescription
ProjectProject name/number
Contract valueOriginal + change orders
Retention %Rate being withheld
Retention earnedTotal retention accumulated
Retention releasedAmount released
Retention balanceAmount still held
Release dateExpected release date

Retention Log​

================================================================
              RETENTION TRACKING LOG
================================================================

Project: ___________________________________________________

Contract Value: $___________________________________________

Retention Rate: ________%

================================================================

| Pay App # | Date | Earned | Retention | Cumulative |
|-----------|------|--------|-----------|------------|
| 1         |      |        |           |            |
| 2         |      |        |           |            |
| 3         |      |        |           |            |
| ...       |      |        |           |            |
| TOTAL     |      |        |           |            |

================================================================

RETENTION RELEASES:

| Date | Amount | Balance After |
|------|--------|---------------|
|      |        |               |
|      |        |               |

Current Retention Balance: $_________________________________

================================================================

Retention Release Triggers​

When Retention Can Be Released:​

Partial Release (Typical):

  • Substantial completion achieved
  • Certificate of Substantial Completion signed
  • Partial release per contract terms

Full Release:

  • Final completion achieved
  • All punch list items complete
  • All documentation delivered
  • All lien waivers collected
  • Final inspection passed

Retention Release Process​

Step 1: Verify Eligibility​

  • Milestone achieved per contract
  • All requirements met
  • Documentation complete
  • Lien waivers ready

Step 2: Prepare Release Request​

  • Calculate amount due
  • Prepare final/retention pay app
  • Compile supporting documents
  • Include required waivers

Step 3: Submit Request​

  • Submit per contract requirements
  • Include all documentation
  • Note contract provisions
  • Request timely processing

Step 4: Follow Up​

  • Track approval status
  • Address any issues
  • Escalate if delayed
  • Document communication

Step 5: Collect Payment​

  • Verify amount received
  • Apply to project
  • Update retention log
  • Provide final waivers

Retention Release Request​

================================================================
          RETENTION RELEASE REQUEST
================================================================

Date: _______________

Project: ___________________________________________________

Project #: _________________________________________________

To: ________________________________________________________

================================================================

REQUEST:

We respectfully request release of retention held on the 
above-referenced project.

Retention Held: $___________________________________________

Less: Previously Released: $_________________________________

Amount Requested: $_________________________________________

================================================================

BASIS FOR RELEASE:

☐ Substantial Completion achieved (Date: _____________)
☐ Final Completion achieved (Date: _____________)
☐ Per contract terms (Reference: _____________)

================================================================

SUPPORTING DOCUMENTATION:

☐ Certificate of Substantial/Final Completion
☐ Unconditional Final Lien Waiver (Contractor)
☐ Subcontractor Final Lien Waivers
☐ Supplier Final Lien Waivers
☐ Warranty documentation
☐ As-built drawings
☐ O&M manuals
☐ Other: _______________

================================================================

Please process this request in accordance with contract terms.

Submitted By: _______________________  Date: ________________

Title: _____________________________________________________

================================================================

Retention Collection Tips​

Best Practices:​

  1. Track continuously - Don't wait until closeout
  2. Know your contract - Understand release terms
  3. Complete closeout items - Don't give reasons to hold
  4. Submit promptly - Don't delay your own request
  5. Follow up regularly - Stay on top of it
  6. Escalate when necessary - Don't let it age

Common Release Delays:​

  • Incomplete punch list
  • Missing documentation
  • Outstanding lien waivers
  • Disputes/claims
  • Owner cash flow issues

Subcontractor Retention​

Tracking Sub Retention:​

  • Track retention withheld from each sub
  • Release per subcontract terms
  • Coordinate with owner retention

Sub Retention Release:​

  • After receiving owner's retention
  • After sub's work complete
  • After sub's final waiver received
  • Pay Application Procedure
  • Lien Waiver Management
  • Substantial Completion
  • Final Documentation

Template provided by support.construction. Customize with your company information.

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