Head Contract – Set up
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      Adding Retention Percentage Levels to your Head Contract

      Adding the Retention Policy levels to your Head Contract.

      Introduction

      Set up a Retention Policy

      Applying a Retention Cap

      Introduction

      Setting up a retention policy for your Head Contract defines how much of each payment claim is retained in a trust account until the project is completed. 

      Lentune comes with a default retention policy, which includes one level. You can customize this default policy to suit your business needs, and it will automatically apply to all new Head Contracts you create.  

      For each Head Contract, you can then adjust the retention policy and levels based on the agreement with your customer. This allows you to set specific percentages and levels unique to each contract. 

      You should have General Ledger codes set up for retentions, one for Head Contracts and one for sub contracts. The codes are set here: 

      These codes are used to allocate retention amounts: 

      • For Receivable invoices (Head Contracts), a separate line item is automatically created for the retention amount. 
      • For Payable invoices (Subcontracts), retention is calculated and separated into its own line when you approve a payment claim and generate an invoice or BCTI. 

      If you are using the Lentune General Ledger, then the respective retention amounts are posted to the correct General Ledger codes for your General Ledger reports. 

      NOTE: Adjusting Retention Levels

      Retention levels can be adjusted at any time before a claim reaches the Prepared or Approved stage. However, once a claim falls within a specific retention level, those percentages become locked for that level.

      If you need to adjust a locked retention level, here’s what to do:

      1. Roll the claim back to Draft status.
      2. Update the retention percentage for that level.
      3. Re-prepare the claim.

      This ensures retention amounts remain balanced and prevents discrepancies at the end of the contract. These rules apply to both Head Contracts and Subcontracts.   

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      Setting up a retention policy 

      When you generate a new Head Contract, Lentune applies your default retention policy by default. If the default policy doesn’t suit the specific contract, it’s important to adjust it before creating the first claim. 

      Here’s how: 

      1. Open the Contract tab in the Head Contract.
      2. Select Retention Policy to open the modal.
      3. Use this screen to view or edit retention levels. 

      Head Contract Retention Policy

      Editing Retention Levels: 

      • Use the trash can symbol to remove a retention level.
      • Use the “+” symbol to add a new level.

      Lentune will estimate retention amounts based on the contract value and the levels you define, making it easy to ensure your policy is accurate. 

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      Applying a Retention Cap 

      If your contract requires a limit on retention amounts, you can apply a retention cap. This ensures that once the cap is reached, Lentune will stop calculating retentions for subsequent claims. 

      To apply a retention cap:

      1. Toggle the retention cap feature on in the retention policy modal.
      2. Set the maximum retention amount. 

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      Need more help? We’re here! We hope our article was helpful! If you need more info or want to connect, drop us an email at support@lentune.com.

      Thank you. We love to hear from you!

      Last updated: 22 January 2025