RETAINAGE IS EARNED MONEY YOU CANNOT SPEND.
Across a $5M subcontractor's portfolio, retainage held at any time is typically $250K to $500K, and it earns no interest. A $350K balance costs about $28K a year. The cash comes back late, so protecting it takes three moves: cut the rate before you sign, calendar every release, and collect on the day the contract allows.
Most owners treat retainage as a closeout detail and find out what it holds when the line of credit is full. On a $4M contractor with three active projects the balance is $120,000 to $200,000 at any given time. A burndown clause at 50 percent complete releases $7,500 to $15,000 a month on a $1.5M contract. The guides in this hub cover the rate you can negotiate, the balance you should track, and the collection steps that bring the last 10 percent home.
WHAT IT MEANS.
Retainage is the 5 to 10 percent of each pay application that a general contractor withholds until substantial completion or closeout, which makes it earned, documented revenue that stays outside your bank account for 12 to 18 months.
WHY IT BREAKS.
The Rate Is Set Before You Sign
Retainage is negotiable before the subcontract is signed and fixed afterward. The asks GCs accept most often are a cut from 10 percent to 5 percent, a burndown clause that drops the rate to 5 percent or zero at 50 percent complete, and no retainage on time and material work, which has no completion milestone to tie it to.
The Balance Builds Every Billing Cycle
A $600K contract builds $6,000 of retainage with every billing cycle, and three jobs of that size at once hold $180,000. The last $60,000 on each job stays held for 30 to 90 days past acceptance, while new mobilizations get funded from the line of credit.
Release Is a Collection Task
Retainage comes back when closeout documents, punch work and a request all reach the GC, and somebody on your side owns the date. Preliminary notice windows last 20 to 30 days from first furnishing, and a missed window removes the lien right that backs the collection.
EVERYTHING ON THIS SUBJECT.
Every guide below is a full page on one part of this subject. Start at the top if the whole thing is new; jump to the one that describes your week if it's not.
- Retainage MeaningRetainage is the 5 to 10 percent a GC withholds from each pay app.
- Retainage Cash Flow ProblemTypical holds are $250K to $500K at $5M of revenue, for 12 to 18 months, at zero interest.
- Retainage Terms NegotiationA burndown clause at 50 percent complete releases $7,500 to $15,000 a month on a $1.5M contract.
- Retainage Cash Flow StrategyA $600K contract builds $6,000 of retainage every billing cycle and holds the last $60,000 for 30 to 90 days past acceptance.
- How to Collect Money OwedMost lien filings produce payment inside 30 days.
- AR Collection SystemThe aging report opens Monday, before the bank balance.
- Protect Lien RightsPreliminary notice windows last 20 to 30 days from first furnishing.
- When to File a Mechanic's LienThe lien itself is due 60 to 120 days after last furnishing, and the window is state specific.
- Mechanics LienThe preliminary notice most subs skip, the filing deadline that lasts 60 to 180 days from your last day on site, and why a notice of intent collects more.
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 and no payroll.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Up to $1M | $1,900 to $2,900 | $1,000 |
| $1M to $3.5M | $2,600 to $3,900 | $1,500 |
| $3.5M to $6.5M | $3,800 to $5,700 | $3,000 |
| $6.5M to $9.5M | $5,100 to $7,100 | $4,500 |
| $9.5M to $12.5M | $6,100 to $8,500 | $6,000 |
| $12.5M to $15.5M | $7,400 to $11,000 | $7,500 |
| $15.5M to $18.5M | $9,400 to $13,500 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
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. The onboarding fee is right here in the table.
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 and never in a report.
Your bookkeeper still does the books.
You stop touching the books.
Everything in Core, and we do the bookkeeping and the controllership as well. Your office stops answering coding questions and stops fixing a reconciliation that will not balance on the last day of the month.
We do the books. No payroll.
Every job shows its margin while it is still open.
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 books, the job costing, and the software. No payroll.
FREQUENTLY ASKED.
