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Recording Holdback Payments

For some purchases, you might need to hold back part of a payment to a supplier until certain conditions are met. You can record holdbacks by creating a negative value “holdback” line on the invoice. Then, when you are ready to pay the remaining amount to the supplier, create a second invoice recording the amount of the payment.

Follow this procedure to record holdbacks.

To Record a Holdback on an Invoice

1.	Create an extra charge to be used for holdbacks (for example, called “Holdback”). Skip this step if this extra charge is already created in your system.

See Setting up Extra Charges.

2.	Create the purchase order and line for the item being purchased. You might want to record the terms of the holdback in the purchase order comments.

See Creating a Purchase Order.

3.	Receive the purchase order.

See Receiving Purchase Orders and Blanket Releases.

4.	Enter an invoice for the purchase order:

See Entering an Invoice.

•	Enter a line matched to the purchase receipt.

•	Enter a “holdback” extra charge line to record the amount being held back. Enter the amount as a negative value.

•	In the Distribution section, select Charged to the accounts below, and then enter the same accounts as were charged on the purchase order line (for example, the work order the material was being ordered for).

•	Save and post the invoice.

5.	At the appropriate time or when the acceptance criteria has been met, enter an invoice for the holdback:

•	On the invoice, enter an extra charge line. Select the “Holdback” extra charge. The line value will be the value of the holdback.

•	Distribute the “holdback” line to the purchase order accounts.

•	In the Distribution section, select Charged to the accounts below, and then enter the same accounts as were charged on the purchase order line (for example, the work order the material was being ordered for).

•	Save and post the invoice.