How-to Guide: Fixing Retention Tracking in Business Central for Construction
- Oct 6
- 3 min read
Retention is a critical part of every construction project — but it’s also one of the biggest sources of errors, disputes, and delayed cash flow. Contractors often lose money when retention isn’t tracked properly.
With Microsoft Dynamics 365 Business Central, construction companies can automate retention tracking, reduce admin headaches, and make sure no dollars are left on the table. But if it’s not set up correctly, you may still face the same old problems: missed amounts, compliance issues, or inaccurate billing.
This guide walks you through the common challenges with construction retention and shows you how to fix them in Business Central.
Understanding Retention in Construction
Retention is the portion of a contract amount held back until project completion or a specified milestone. It ensures quality and compliance — but for contractors, poor tracking can lead to:
Cash flow delays
Overlooked receivables
Compliance disputes with clients or subs
In Business Central, retention tracking should give you one source of truth: contract value, retention %, withheld amounts, and release schedules — all tied directly to your job card.
Common Challenges Contractors Face with Retention
🔹 Incorrect Retention Setup
Retention percentages aren’t applied consistently across jobs, invoices, or change orders. This leads to incorrect billing and missed revenue.
🔹 Manual Spreadsheets
Many contractors still track retention in Excel. This creates version-control issues and makes it hard to see the true project cash position.
🔹 Compliance Concerns
Owners, GCs, and subs all have different rules for retention. Missing these requirements can damage relationships and lead to disputes or penalties.
Steps to Fix Retention Tracking in Business Central
1. Review & Configure Retention Rules
Set retention % per contract or job card in BC.
Automate retention withholding during invoicing.
Align your setup with industry or contract requirements (e.g., 10% holdback).
2. Automate Retention in Invoicing
When you generate an AIA or progress invoice, retention is automatically withheld.
This reduces manual edits and eliminates errors.
3. Streamline Access to Retention Data
Use job cards to view retention by project in real time.
Train project managers to quickly see what’s held back and what’s ready for release.
4. Create Compliance Checklists
Document retention rules for each client/project.
Use Business Central to attach them directly to contracts.
Ensure proper release when milestones are reached.
5. Train Your Team
Educate project managers and accounting teams on how retention flows through BC.
Run practice scenarios: partial billing, final release, multi-level subcontracting.
6. Regular Audits
Review retention balances monthly.
Check that amounts withheld align with contract terms.
Verify releases are happening on time to avoid disputes or lost cash.
Why Fixing Retention Matters
When retention is tracked properly in Business Central:
✅ Cash flow improves (no forgotten holdbacks).
✅ Billing disputes are reduced.
✅ Compliance becomes easier.
✅ Project managers always know what’s outstanding.
For construction firms, this isn’t just about accounting — it’s about protecting profit and avoiding unnecessary conflict.
Partner with The BC Team
If your retention process still feels messy or manual, we can help. The BC Team specializes in construction ERP with Business Central, and we’ve set up automated retention for contractors across North America.
We’ll:
Configure retention rules tailored to your contracts
Train your team to use them confidently
Ensure compliance while protecting your cash flow
Final Word
Retention doesn’t have to be a headache. With the right setup in Business Central, you’ll always know what’s held, what’s due, and when to release it.
📞 Talk to The BC Team today — and stop losing profit to retention mistakes.
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