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Retainage Stage

Final closeout and getting paid.

Retainage is the final stage — the work is done, the site is cleared, and now you're handling the business side: final billing, collecting retainage, and archiving the project.

What Is Retainage?​

Retainage is the financial and administrative closeout. The physical work is complete. Now you're:

  • Submitting final invoices
  • Collecting retainage (the % held back until project completion)
  • Closing out purchase orders
  • Finalizing all documentation
  • Resolving any disputes
  • Archiving project files
  • Closing out the project in Podio

Duration: Can take weeks to months, depending on payment terms, customer, and any outstanding issues.

What Is Retainage (The Money)?​

Retainage is a percentage of each payment that the GC/owner holds back until the project is complete.

Typical: 5-10% of each invoice

Example:

  • You bill $100,000 throughout the project
  • GC retains 10% ($10,000)
  • You've received $90,000 during Construction
  • In Retainage stage, you collect that final $10,000

Why it exists: Protects the GC/owner — if you don't finish the job, they have money to hire someone else to complete it.

Why it matters to you: This is YOUR money. Don't forget about it. Don't let it sit uncollected.

When Does Retainage Start?​

Retainage starts when you advance from Demobilization.

When Demobilization is complete (site is clean, equipment is gone, punch list is done, GC accepted the work), you change Current Stage Status to "Retainage Active".

All tasks for this stage already exist (created when the project was created).

Major Categories of Retainage Work​

1. Final Billing​

Submit your last invoice.

Tasks may include:

  • Calculate final amounts owed
  • Include any outstanding change orders
  • Submit final invoice to GC
  • Include all required documentation with invoice
  • Follow up on invoice receipt

Why it matters: You can't get paid if you don't bill. Submit promptly.

Tip: Make sure your final invoice matches your contract amount (plus approved change orders). Discrepancies delay payment.

2. Retainage Collection​

Get that held-back money.

Tasks may include:

  • Submit retainage release request
  • Provide required close-out documents
  • Follow up on retainage payment status
  • Escalate if payment is delayed

When can you collect retainage? Usually when:

  • All work is complete
  • All punch items are done
  • Final inspections passed
  • GC/owner has accepted the work
  • Required documentation is submitted

How long does it take? Varies widely:

  • Good customers: 30-60 days after final acceptance
  • Slow customers: 90+ days
  • Problem projects: Can take months of chasing

Tip: Start following up early. Don't wait 90 days to realize they "lost" your paperwork.

3. Close-Out Documentation​

Submit the final paperwork package.

Common close-out documents:

  • Final lien waiver/release
  • Warranty documentation
  • As-built drawings (if applicable)
  • Material certifications
  • Inspection reports
  • Maintenance manuals (if applicable)
  • Final photos

Why it matters: Many GCs won't release retainage until they have complete documentation.

Tip: Find out what documents are required BEFORE Retainage. Gather them during Demobilization.

4. Lien Releases​

Prove you've been paid (or will be).

Types:

  • Conditional lien release: "I'll release my lien rights when this check clears"
  • Unconditional lien release: "I've been paid, I release my lien rights"

Tasks may include:

  • Submit conditional release with final invoice
  • Submit unconditional release after payment received
  • Obtain lien releases from any subcontractors you used

Why it matters: GCs typically require lien releases before releasing final payment. Protects them from mechanics liens.

5. Purchase Order Close-Out​

Clean up the financial loose ends.

Tasks may include:

  • Review all POs for the project
  • Verify all materials received and paid for
  • Close out completed POs
  • Reconcile any discrepancies
  • Return deposits (if applicable)

Why it matters: Open POs can cause accounting headaches. Close them out.

6. Dispute Resolution​

Handle any outstanding issues.

Tasks may include:

  • Review any disputed charges
  • Negotiate resolution
  • Document agreements
  • Adjust final billing if needed
  • Escalate to management if needed

Common disputes:

  • Back-charges from GC (damage, cleanup, delays)
  • Disputed change orders
  • Quantity disagreements
  • Quality claims

Tip: Try to resolve disputes before submitting final billing. It's easier to negotiate when they still owe you money.

7. Project Archival​

Organize and store project records.

Tasks may include:

  • Organize all project files
  • Move files to archive location (Google Drive archive folder)
  • Ensure all photos are saved
  • Archive Podio project
  • Document lessons learned

Why it matters: You may need these records later for:

  • Warranty claims
  • Legal disputes
  • Future similar projects (estimating reference)
  • Tax/audit purposes

How long to keep records?

  • At minimum: Length of warranty period + statute of limitations (often 6-10 years)
  • Best practice: Keep forever (storage is cheap)

8. Lessons Learned​

What went well? What didn't?

Tasks may include:

  • Hold debrief meeting with PM and key crew
  • Document what worked well
  • Document what went wrong
  • Identify process improvements
  • Share learnings with team

Questions to ask:

  • Did we make money on this job?
  • Where did we lose time/money?
  • What would we do differently?
  • Were there any safety issues?
  • Would we work with this GC again?

Why it matters: Every job is a learning opportunity. Capture those learnings.

Retainage Timeline​

How long does Retainage take?

Best case: 30-60 days
Typical: 60-90 days
Problem projects: 6+ months

Factors that affect duration:

  • Customer payment terms
  • Documentation completeness
  • Disputes or issues
  • GC's own cash flow
  • Project owner's approval process

Tip: Start following up on retainage at 30 days. Don't assume it will just show up.

How to Know When Retainage Is Complete​

Retainage is "done" when:

✅ Final invoice submitted
✅ All payments received (including retainage)
✅ All lien releases exchanged
✅ All close-out documentation submitted
✅ All disputes resolved
✅ Project files archived
✅ Lessons learned documented
✅ All Retainage tasks Complete

Common Retainage Mistakes​

❌ Forgetting About Retainage​

Problem: Project ends, you move on, forget to chase retainage.
Result: Money sits uncollected for months. Or forever.

Fix: Track retainage as actively as you track progress payments. Set reminders.

❌ Incomplete Documentation​

Problem: Can't find inspection reports, missing lien releases, etc.
Result: GC won't release retainage until you provide docs. Delays payment.

Fix: Gather documentation throughout the job. Have it ready before you ask for retainage.

❌ Not Following Up​

Problem: Submit final invoice, assume payment will come.
Result: Invoice gets lost in the shuffle. Payment delayed indefinitely.

Fix: Follow up at 30 days, 45 days, 60 days. Be politely persistent.

❌ Burning Bridges Over Small Amounts​

Problem: Fight aggressively over disputed $500 back-charge.
Result: Win the battle, lose the war. GC never hires you again.

Fix: Pick your battles. Sometimes eating a small loss is worth preserving the relationship.

❌ Not Archiving Properly​

Problem: Delete files, lose records, can't find anything later.
Result: No documentation when warranty claim comes in 2 years later.

Fix: Archive everything. Storage is cheap. Lawsuits are expensive.

Tips for Successful Retainage​

1. Know the Payment Terms​

Before you start the job, know:

  • What % retainage?
  • When is retainage released?
  • What documentation is required?
  • Who approves payment?

Don't be surprised at the end.

2. Track Retainage Separately​

Know exactly how much retainage is owed on every project.

Track:

  • Total contract value
  • Total billed
  • Total received
  • Retainage held
  • Retainage collected

Don't let money slip through the cracks.

3. Submit Documentation Proactively​

Don't wait for GC to ask.

As soon as Demobilization is done:

  • "Here's our final invoice"
  • "Here's our conditional lien release"
  • "Here's the close-out documentation package"
  • "What else do you need?"

Being proactive speeds up payment.

4. Follow Up Consistently​

Create a follow-up schedule:

  • Day 1: Submit final invoice + docs
  • Day 14: "Just confirming you received everything"
  • Day 30: "Checking on payment status"
  • Day 45: "Any issues holding this up?"
  • Day 60: Escalate to your management + their management

Be polite but persistent.

5. Build Relationships with AP​

The accounts payable person often controls when checks go out.

Be nice to them:

  • Learn their name
  • Be patient when they have questions
  • Make their job easy (complete paperwork, clear invoices)

AP people remember who's pleasant to work with.

6. Document Everything​

If there are disputes or issues:

  • Email, don't just call (creates paper trail)
  • Save all correspondence
  • Document agreements in writing
  • Get sign-offs

If it's not in writing, it didn't happen.

Retainage Checklist​

Before marking the project Complete:

  • Final invoice submitted
  • All progress payments received
  • Retainage payment received
  • All lien releases exchanged
  • Close-out documentation submitted
  • All disputes resolved
  • Purchase orders closed
  • Project files archived
  • Lessons learned documented
  • All Retainage tasks Complete

What Happens After Retainage?​

Retainage is the final stage.

When complete:

  1. Ensure all payments are collected
  2. Archive project documentation
  3. Change Current Stage Status to "Complete" (or whatever your final status is)

The project is officially done!

Related Docs:

Remember​

Retainage is about getting paid for the work you did.

The hard work is done — don't leave money on the table:

  • Bill promptly
  • Document completely
  • Follow up persistently
  • Archive thoroughly

Every dollar of retainage is profit you already earned. Go collect it.