Retention is common in contract work. The customer holds back a percentage until a defect period passes, as insurance that you will come back if something goes wrong.
It is reasonable. What is not reasonable is how often it is never claimed.
Why it gets forgotten
The job is finished, the team has moved on, the file is closed. The retention becomes due six or twelve months later, by which time nobody is looking at that project any more.
It sits in your receivables as an ageing balance that everyone assumes is a dispute, and eventually gets written off as bad debt when it was simply never asked for.
Treat it as a dated task, not a balance
The moment the job closes, record the retention amount and the date it becomes claimable. Then it is a diary entry, not a memory.
This one habit recovers more money for contract businesses than almost anything else, because the money is not disputed. Nobody asked.
Get the terms in writing at the start
- The exact percentage
- The exact period
- What ends it, whether that is a date or a certificate
- Who you claim from
Vague retention terms are how a twelve-month period becomes an eighteen-month conversation.
Price for it
If 10% of a job is held for a year, you have not been paid the quoted amount. You have been paid 90% now and 10% later, if you remember to ask.
That is a real cost of the work, and it belongs in the quotation rather than in your surprise a year later.
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