Capped Retainage is a retention strategy in which the user can establish a retainage rate for the first 50% of a contract and another rate for the second 50% of a contract. Capped Retainage is sometimes stipulated by state law.
As a best practice, Capped Retainage should be applied on the first application for payment (AFP) against a subcontractor's schedule of values (SOV).
Note: The Capped retainage feature must first be enabled by the GCPay Support Team. Please contact support to activate the feature.
Before the retainage strategy can be changed, retention has to be unlocked by the general contractor (How do I unlock retainage for a subcontractor SOV?)
To enable Capped retainage on a subcontractor's SOV, follow these steps:
1. Create a new AFP
2. Click the drop-down arrow on the retainage type and choose from the following:
3. Select Capped Retainage
4. Establish your retainage requirements for the first 50% and last 50% of the contract
In this example, 10% retainage will be withheld for the first 50% of the contract. Once 50% of the contract is billed, no further retainage will be held. GCPay will automatically adjust for change orders that increase the scope of a contract.