YOUR BEST WORK IS SITTING IN SOMEONE ELSE'S ACCOUNT.
Retainage is 5 to 10 percent of every pay application withheld until project completion or substantial completion. On a $2M project at 10 percent retainage, $200K of earned money is held for the duration of the project, sometimes 12 to 18 months. Across a $5M subcontractor's portfolio, total retainage held at any time is typically $250K to $500K. That's working capital that's earned, documented, and unavailable.
Retainage doesn't show in your bank statement, and it barely shows in most subcontractors' financial thinking. It's real money, it's earned, and the GC holds it at zero interest until they decide to release it. A $5M subcontractor who doesn't track retainage systematically often has $300K+ of earned money nobody is chasing. The balance isn't a rounding error either. It's usually the largest pile of collectible cash in the business, and it sits there because no one person owns the job of getting it back.
WHAT IT MEANS.
Retainage is a percentage, typically 5 to 10 percent, of each pay application that's withheld by the GC until the project reaches substantial completion or final completion.
Retainage isn't free money held for safekeeping. It's working capital you're lending to the GC at zero interest. The contract doesn't call it a loan and nobody books it as one, but that's the effect on your balance sheet every month the balance stays open.
WHY THE MONEY STAYS PUT.
The rate never gets negotiated
Standard retainage is 10 percent. On larger projects or with strong GC relationships, 5 percent is achievable, and some contracts allow retainage reduction from 10 percent to 5 percent once a project is 50 percent complete. That language has to be negotiated before signing. Once the contract is executed it's not available, so the rate you agreed to without reading it's the rate you carry for the whole job.
Nobody knows the balance
Retainage doesn't appear on the bank statement, so it drops out of the financial thinking of the business. If you can't say how much retainage you're owed across your portfolio right now, you don't have a retainage management process. A $5M subcontractor in that position often has $300K+ of earned money nobody is chasing.
It doesn't release itself
Punch list items, final inspections, and the certificate of substantial completion are each a trigger for retainage release that requires your follow up. A subcontractor who waits for the GC to start the release is leaving money on the table. The GC has no deadline pressure on this, so nothing moves until you move it.
WHAT IT LOOKS LIKE IN DOLLARS.
A $5M subcontractor with $350K in retainage held at 8 percent cost of capital is financing the GC's project for $28K per year, at no benefit to themselves. Over a 5-year career with consistent retainage balances, that's $140K of invisible financing cost. Retainage isn't free money held for safekeeping. It's working capital you're lending to the GC at zero interest.
Typical retainage held at $5M in revenue runs $250K to $500K. The average hold period on commercial projects is 12 to 18 months. The interest you earn on withheld retainage is 0 percent, which makes it the cheapest money the GC has access to and the most expensive money you've tied up.
WHAT TO DO ABOUT IT.
Standard retainage is 10 percent. On larger projects or with strong GC relationships, 5 percent is achievable. Some contracts allow retainage reduction from 10 percent to 5 percent once a project is 50 percent complete. Negotiate that language before signing, because it's not available after.
Every active and recently closed project gets a retainage tracking line: contract amount, retainage rate, total retainage held, and expected release date. The balance goes into the WIP schedule where it's visible every month. If you don't know the number today, that's the first thing to fix.
Punch list complete, final inspection scheduled, and certificate of occupancy issued are each a checklist item rather than a hope. A follow up call goes out 30 days after substantial completion instead of waiting for the GC to start the process. Lien rights stay preserved through release, so no unconditional lien waiver gets signed until the retainage is in the bank.
THE OUTPUTS, NAMED.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
FREQUENTLY ASKED.
